Re: How can i get finance company to slash APR?
11-27-2012 01:26 PM
Actually unless your loan is structured with some kind of prepayment penalty just putting a large payment on it around tax time will significantly reduce the interest you are paying over the life of the loan. I did this a few years ago with a Cap 1 auto loan that was at 22%. I paid down a couple thousand in one payment. Now Cap 1 came back and said "You don't need to make another payment until XX/XX/XXXX" in other words they just credited it as regular payment for the next 10 months and said I didn't need to pay again until month 11.
What I did instead was just keep making the regular monthly payments until the loan was finally paid off early. It saved a lot of interest on the balance paid down with the lump sum payment. Check your loan docs. If it is just a normal simple interest loan with a high interest rate this can work for you too. I won't even begin to try and figure out what interest I (or you) save but if you put all the numbers up (Current balance, interest rate, remaining term, proposed lump sum) one of the Excel geeks will quickly tell you what you save.
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