topic Re: Question regarding principal payment in Auto Loans

Question regarding principal payment

montana586 — Thu, 27 Nov 2014 22:30:58 GMT

I feel like I should know this but here goes.. If I come into a lump sum of money and want to put it on the balance do they take interest out of the payment or is it all applied to the principle.. I know this is probably a better question for my lender but in your guys experiences how did it work for you?

Re: Question regarding principal payment

StartingOver10 — Fri, 28 Nov 2014 00:19:04 GMT

@montana586 wrote:
I feel like I should know this but here goes.. If I come into a lump sum of money and want to put it on the balance do they take interest out of the payment or is it all applied to the principle.. I know this is probably a better question for my lender but in your guys experiences how did it work for you?

If you make the lump sum payment at the same time as a regular payment (exact same time) then it should all go to principal

If you make the lump sum payment at a different time, then the per diem interest is taken out of the lump sum for the number of days that have accrued since your last payment.

I am assuming it is a simple interest loan and not a rule of 78s type contract. Read your loan agreement to know for sure what type of financing is specified.

For my auto loan, there is a separate line item I just fill out for a principal only payment. I have Chase. Who do you have?

Re: Question regarding principal payment

montana586 — Fri, 28 Nov 2014 00:22:51 GMT

TD auto finance 72 month loan 8.39%

Re: Question regarding principal payment

montana586 — Fri, 28 Nov 2014 00:25:26 GMT

Had it since 2012 and definitely not planning on going through the whole 6 yrs just wanna make sure I'm putting as much towards the principle as I can but wanna make sure I'm doing it right

Re: Question regarding principal payment

StartingOver10 — Sun, 30 Nov 2014 18:29:51 GMT

You should be able to make a lump sum payment to principal at any time (as long as it is with your regular payment) and then see the payment history and the allocation between interest and principal.

You can really adjust the time frame for your payments by making lump sum payments - even if they are small it will help acclerate the payoff.

Re: Question regarding principal payment

montana586 — Mon, 01 Dec 2014 00:04:58 GMT

Ok so usually I pay a month ahead so then do I have to wait till the actual month and make one lump sum payment in the month of when my payment is due? Like right now my payment isn't due till January so if Iale the lump sum payment are they jus gonna advance my payment schedule because as of right now that's what they do when I make a payment early

Re: Question regarding principal payment

StartingOver10 — Mon, 01 Dec 2014 01:31:53 GMT

@montana586 wrote:
Ok so usually I pay a month ahead so then do I have to wait till the actual month and make one lump sum payment in the month of when my payment is due? Like right now my payment isn't due till January so if Iale the lump sum payment are they jus gonna advance my payment schedule because as of right now that's what they do when I make a payment early

I am assuming you pay online. Don't they have a separate line to make an additional principal payment? On my payment page it has a place for the regular payment and a place for future payments and a place for principal payments - all of them are different types of payments.

If not, then you will need to contact TD Bank and find out the way they want it paid.

Re: Question regarding principal payment

montana586 — Mon, 01 Dec 2014 01:58:55 GMT

Guess this is gonna be a pain then because the only two options are "one time payment" and set up "automatic payments" as far as payment options go... so I'm guessing anytime I wanna make a principal payment I'm going to have to call them that sux... online is so much more convenient maybe I'm overlooking something I'll have to call them and see what they say.

Re: Question regarding principal payment

Anonymous — Mon, 01 Dec 2014 19:50:23 GMT

You should check into refinancing.

Re: Question regarding principal payment

montana586 — Mon, 01 Dec 2014 20:00:32 GMT

I would but I just added three credit cards back in may of this year so I'm trying to garden till 2016 so I can refinance the house by then I should have it paid off hopefully

Re: Question regarding principal payment

Anonymous — Mon, 01 Dec 2014 23:27:46 GMT

@montana586 wrote:
I would but I just added three credit cards back in may of this year so I'm trying to garden till 2016 so I can refinance the house by then I should have it paid off hopefully

I see. If you want to make a principle only payment. just let your lender know. Often even the automated system will have the option to mark the payment as principle only, otherwise ask the lender to do it manually.

Re: Question regarding principal payment

montana586 — Tue, 02 Dec 2014 14:46:36 GMT

Sent them a message thru secure message center and this was their response:

Thank you for reaching out to TD Auto Finance. If you’d like to make a principal payment on your account, please send us a message through Secure Message Center. Be sure to include the amount of the payment, as well as the date and how the funds were sent, so we apply the funds correctly. If we do not receive instructions from you, all payments are posted as follows, as outlined in the terms of your contract:

• First to the earned and unpaid part of your finance charge (e.g., interest),
• then to your unpaid amount financed (e.g., principal balance), and
• then to any other amounts due.

Please note: when additional funds are sent as part of your payment, without specific instructions, we apply the additional amount to your next month’s payment(s).

If you have any other questions or need further help, please let us know. We value you as a Customer and are here to serve you. Thank you for choosing TD Auto Finance.

Sincerely,

Quinn White
Problem Resolution Specialist
TD Auto Finance