Isn't the payoff supposed to go DOWN?

[jason0618]

Got an interesting one.  I just bought a used Harley in April.  My plan is to finance it and crazy high rate, and then pay it off after 12-18 months to give me some extra credit.  My payment is only $155.97 a month, because I put a big chunk down, but I'm still at a 22% rate.  

I've had two payments due, both were paid on time and rounded up to the next dollar.  Only $0.03 extra I know, but still.  

Today, I look online for a payoff, and it's a couple of dollars higher than the original loan amount.  I know interest accrues and all that, so I'm not expecting a big drop after only $312 in payments, but surely it shouldn't be higher than the original loan, right?  

I called Harley Financial, and while they have english speaking reps, the guy I talked to really had no clue what he was saying.  Kept telling me it's because I was making smaller payments.  I would pay $40 one week, and $75 another week, etc.  Added up, I made more than the required payment, and always by the due date, so his explanation makes no sense to me.  

Any suggestions here?

[bahbahd]

I could be that you are seeing something along the lines of this.

http://ficoforums.myfico.com/t5/Mortgage-Loans/Extra-payments-do-not-fully-reduce-principal-what-can...

[jason0618]

That could be...  My principle balance isn't shown on the website, only payoff.  I'll have to call and check that out.

[j_casteel]

At 22% and only making the min payment you are accruing interest faster than paying the principle down. You'll need to make bigger payments if you want to see the payoff go down b/c right now you're just paying interest until later in the loan term.