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Regular Contributor
black_citi
Posts: 210
Registered: ‎12-20-2013
0

Why does Santander keep doing this?

I don't quite understand the interest they are charging me. I am hoping you guys can help.

 

My first payment on my car was due on sept 28 2013. The principle amount was 20.903.42. They added 313.60 to the principal which brought the amount to 21.217.02.  That amount was the payoff. I payed the 429.51 that was due on sept 28. When my next statement comes in the mail for October the principal is still 20,903.42 but the payoff amount went down to 21,007.04 AFTER they ADDED 103.62. I payed the 429.51 for the month of October. November. The principal falls to 20742.17. They add 108.92 which brings that amount up to 20851.09 as the payoff. November gets payed. December. The new prinipal is 20553.84 with 84.80 (yes $84.80 lol) added to that which bring the payoff amount to 20638.64. December gets payed. Now we are in January and the principal is $20,355.60 with 122.15 ADDED! The payoff amount is 20477.75. 

 

I do not understand how they are adding this interest to my pay off amount. It says on the statement it is "accrued interest" and my interest rate is 13.69%. I tried to get refinancing through Cap 1 but they denied me because I had to many recent inquiries. The last time I had an inquiry was when I bought the car and that was back in July. The numbers they are giving me keep jumping up and down and there is nothing else in the statement that they send that gives any more information than that. Is this normal practice that ALL finance companies do or did I just get stuck with a terrible company? :smileysad:  I am currently saving up about $4000 to payoff some of that principal so I can try and get this car refinanced. I hope to have the money by April. My credit score is 648 from Experian currently.

 

EX 673, EQ 686, TU 686
Current Credit Cards: AMEX Blue Cash Everyday/$1000, Barclay's Rewards Mastercard/$1000, Capital One Quick Silver/$2000, Citi Diamond/$1000, DCU Platinum Visa/$10,000, First national bank of O/$1000

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Senior Contributor
StartingOver10
Posts: 4,534
Registered: ‎03-06-2010
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Re: Why does Santander keep doing this?

[ Edited ]

Your interest accrues daily. That is normal with a simple interest loan. If you check the number of days between your payment and the previous time you paid, you may see that there is say 30 days between payments or 20 days on the short month (I didn't count the days). The fewer days between payments, the less the interest in dollars you have to pay for that payment.

 

The good news is this:  lets say you make an extra large payment this month $1000 for example, then if the interest portion is $ 122.15 all the rest of the $1000 is applied to your principal and next months payment will be calculated on the lower principal balance. You can accelerate payment, by making large lump sums and save literally thousands of dollars in interest because your interest is calculated on a lower principal balance. Think of it as reverse compounding.

 

It is normal for all companies that do the simple interest financing. And that is what you want to have in your loan - 

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cartwrna
Posts: 99
Registered: ‎09-14-2013
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Re: Why does Santander keep doing this?

I attempted to use Santander, but couldn't find a dealership that would accept them. How did you go about finding one? 


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Regular Contributor
black_citi
Posts: 210
Registered: ‎12-20-2013
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Re: Why does Santander keep doing this?

@StatingOver10 I think I get what you're saying lol. I do know that putting more towards your payment goes towards the principal. It does make a lot of sense the way you put it. I have bought a lot of cars in the past but I am still learning the curves of banking and financing. There is so much involved, that's why I like coming here now. I wish I found out about this site before I brought my car lol. Thank you for the response. :smileyhappy:

@Cartwrna If you can't find a dealership to accept them then that's a good thing lol. The dealer I went through, a Chevy dealership, just choose them since I got denied by everyone else lol. I didnt have a down payment so that explains my high interest. If I did have a DP I would have been with Citibank. I don't know if you got pre approved from them or not but if you were thinking of going with them you might want to google customer complaints. I personally haven't had any problems with them though. I have automatic withdrawal but I might cancel it.
EX 673, EQ 686, TU 686
Current Credit Cards: AMEX Blue Cash Everyday/$1000, Barclay's Rewards Mastercard/$1000, Capital One Quick Silver/$2000, Citi Diamond/$1000, DCU Platinum Visa/$10,000, First national bank of O/$1000

Contributor
Rkalynsmith
Posts: 135
Registered: ‎10-14-2013
0

Re: Why does Santander keep doing this?


cartwrna wrote:

I attempted to use Santander, but couldn't find a dealership that would accept them. How did you go about finding one? 


Go to carmax! They use them or you can ask santander for a list of approved dealers


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Creditaddict
Posts: 22,064
Registered: ‎10-23-2007
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Re: Why does Santander keep doing this?


Rkalynsmith wrote:

cartwrna wrote:

I attempted to use Santander, but couldn't find a dealership that would accept them. How did you go about finding one? 


Go to carmax! They use them or you can ask santander for a list of approved dealers


gosh where do you live, almost all dealers take the check (they may not always want to!)

Fico Scores: EQ- 626 Overstck., TU 696 Walmart, EX 695 Chase (11-05-14)
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Frequent Contributor
anca21bi
Posts: 353
Registered: ‎07-27-2008
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Re: Why does Santander keep doing this?

If your preapproved they will give you a long list of dealers. I even had a dealership call me that knew I was preapproved. They are the ones I purchased my car from. I also live in a big city so that probably helped my dealer options.
Established Member
shondra0609
Posts: 40
Registered: ‎01-28-2014
0

Re: Why does Santander keep doing this?

I financed using Santander in July with an absurd interest rate of 19% (beggers can't be choosers).  In fact, I only traded my other vehicle in so that I could get a car loan and improve my credit.  Well, I just refinanced with Capital One yesterday for 9% interest.  The interest could still be better, but not only are my monthly payments going down $150, but I'll be saving over $7,000 for the life of the loan.  I figure I will continue to pay the same monthly payment I currently do, since I'm use to it, and this will help me when I go to either refinance again or trade it in.  I would suggest that as long as you stay on time with all of your payments and your credit score/report continues to improve, you look to refinance after you've made at least 6 months worth of payments.  It'll save you money.


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New Member
irishgirl88
Posts: 3
Registered: ‎10-08-2011
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Re: Why does Santander keep doing this?

[ Edited ]

STAY AWAY FROM SANTANDER!!! I BOROWED 29026.56 TWO YEARS AGO AND MY PRINCIPLE HAS NOT MOVED, IN FACT I OWE MORE ON THE PAYOFF NOW THAN WHAT I BORROWED. THEY ARE A LOAN SHARK, STAY AWAY FROM THEM. MANY DEALERSHIPS DON'T DO BUSINESS WITH THEM BECAUSE THEY HAVE VERY BAD BUSINESS PRACTICES.

Epic Contributor
Creditaddict
Posts: 22,064
Registered: ‎10-23-2007
0

Re: Why does Santander keep doing this?

I don't think that is a fair blanket statement because if you NEED to borrow with someone like Santander the idea is to borrow as little as possible and fix your credit mistakes and refinance as fast as possible... When you borrow $30k at 20+% you will be upside down so fast that without cash down it will be super hard to refi the loan even if you do fix your credit but that doesn't mean Santander did something wrong... YOU signed the paperwork showing you payments on $30k for 72 months, if you thought it was bad and they were sharks, why did you buy the car?
Fico Scores: EQ- 626 Overstck., TU 696 Walmart, EX 695 Chase (11-05-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
66 Cards and Counting :smileytongue:

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