topic Re: Is my car loan company screwing me over? in Auto Loans

Is my car loan company screwing me over?

Anonymous — Wed, 04 Mar 2015 03:37:52 GMT

I have a loan through xxxxxxx Bank. I have looked at my car loan and have noticed that my loan is only down by $2,500. I have been paying on this loan since May of 2010. The company website says that my loan won't mature until April of 2017. My loan was originally $19,500 and I have been making $480 a month payments. I have been late a total of 13 times, but have always paid the next month and a few 90 day Kate's due to being in between jobs. I have taken out 2 deferments but that's it. After calculating I have paid about $22,000 so far. The messed up thing is that I have paid $20,000 on interest and only $2,500 on principle! I don't know what to do! I will call them in the morning because I believe that they mixed up my principle and interest side of my loan. I should only have a few payments left on it. My interest rate is 24.99%. I know that I have messed up a few payments, and have received fees of around $1,400 but really?? This can't be right. Please don't comment on how I should be paying on time. I understand this.

Re: Is my car loan company screwing me over?

Anonymous — Wed, 04 Mar 2015 03:39:24 GMT

Is this common? Sorry for the spelling

Re: Is my car loan company screwing me over?

Anonymous — Wed, 04 Mar 2015 03:47:30 GMT

a simple amortization table will help you figure this out. This sounds about right, at 25% your payments of 480 are roughly 400 interest and 80 principle for your first payment. Your break even point (where half goes to interest and half to principle is about 5 years in from my simple calculations). When you deferred your payments you continued to add about 350-400 to your loan in interest, on top of late fees. I wish you the best but more then likely the bank is right.

Re: Is my car loan company screwing me over?

Anonymous — Wed, 04 Mar 2015 05:00:46 GMT

So to clarify, $20,000 on interest and $2,500 on principle sounds right? So on a loan of $19,500 I should still owe $17,500? I forgot to add that. I have been paying on my loan for almost 5 years and still owe $17,500? I still think it's wrong.

Re: Is my car loan company screwing me over?

Anonymous — Wed, 04 Mar 2015 05:01:48 GMT

For some reason the interest I have been paying hasn't done anything for my loan. After five years and only $2,500 taken off what I still owe them. That just sounds crazy.

Re: Is my car loan company screwing me over?

Anonymous — Wed, 04 Mar 2015 05:04:57 GMT

Sorry. I forgot to say thank you for your comment. After reading what I wrote I can see that it looks right. $17,500 is what I still owe after 5 years, and after paying $22,500 on the total it's just insane that I still owe so much.

Re: Is my car loan company screwing me over?

Anonymous — Wed, 04 Mar 2015 05:08:01 GMT

it is crazy because the interst rate is crazy high- no judging just saying. Not sure where you live but that is close to the maximum legally allowed. if you google loan payment calculator bankrate has good one complete with amortization table. Deferring payments added to your loan the interest that was due to the principal (350-400) each month you deferred, plus late fees, you are now paying interest on those late fees as well. Looking at an amotization table shows that after one year of on time payments, you only paid the interest down approx 1,100 in the first year...good luck again. You should explore the possiblity of refancing that loan.

Re: Is my car loan company screwing me over?

Anonymous — Wed, 04 Mar 2015 05:28:50 GMT

Thanks again for commenting. It just seems like the bank messed up. Obviously $20,000 on just interest alone on a $19,500 loan is ridiculous. I will call my financial institution tomorrow and see what's going on. I'm just saying I'm not going to pay $22,500 + another $480 a month for the remainder of the loan maturity (24 months.) totaling $34,000. I mean after the first year according to the financial institutions record of payment history I paid $1,000 towards my priciple and that's all. Then every few months or so I have paid on my principle but totaling out to only $2,500 go to my priciple over the course of 5 years??

Re: Is my car loan company screwing me over?

Kirmie2010 — Wed, 04 Mar 2015 09:46:09 GMT

Yes its legal and normal and its horrible. I couldnt ever see taking a car loan unless it was under 5% interest.

That kind of interest rate is why I couldnt take any car loans I was approved for. You end up paying slightly less in just interest than the car itself. You also pay almost all interest the first year of your loan. (I would of ended up paying 200 dollars or so towards the car first year and about 1500 in interest.)

I was going for a 12k loan, with rates LESS than what you have I would of ended up paying 9200 in interest on a 12,000 dollar car loan when it was paid off. So overall id pay 21,200 on a 12k car.

I feel bad for ya, good luck.

Re: Is my car loan company screwing me over?

cartwrna — Wed, 04 Mar 2015 10:53:41 GMT

It does seem correct. I financed a Charger RT for $30,000 @ 18% interest. When the loan was all said and done had I stayed with that rate I would have paid $55,000. If you look at your original loan papers from dealership in the contract it will say the "finance charge" which is the amount of interest you pay. On 25% it would be about the same as price of car if not more.

Re: Is my car loan company screwing me over?

cartwrna — Wed, 04 Mar 2015 10:59:02 GMT

Well after doing an amortization table based on $19,500 loan @ 24.99% for 7 years starting in May 2010 had you made all payments on time your loan should be down to around $9,900. I'm not sure how he bank operates but some lower end finance company's actually make you pay all of the interest first and then the principal pay kicks in. You may be in one of hose situations. Not 100% sure.

Re: Is my car loan company screwing me over?

cartwrna — Wed, 04 Mar 2015 11:00:07 GMT

This is the table for thats scenario http://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx?loanAmount=19500&years=7&terms=84&interestRate=24.99&loanStartDate=01+May+2010&show=true&monthlyAdditionalAmount=0&yearlyAdditionalAmount=0&yearlyPaymentMonth=+Mar+&oneTimeAdditionalPayment=0&oneTimeAdditionalPaymentInMY=+Jun+2010

Re: Is my car loan company screwing me over?

TRC_WA — Sun, 08 Mar 2015 20:48:50 GMT

@cartwrna wrote:
This is the table for thats scenario http://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx?loanAmount=19500&years=7&terms=84&interestRate=24.99&loanStartDate=01+May+2010&show=true&monthlyAdditionalAmount=0&yearlyAdditionalAmount=0&yearlyPaymentMonth=+Mar+&oneTimeAdditionalPayment=0&oneTimeAdditionalPaymentInMY=+Jun+2010

So to answer the OP's question...

YES.

Many times over.

Re: Is my car loan company screwing me over?

Ragelog — Mon, 09 Mar 2015 20:02:11 GMT

Being late a month 13 times adds a lot of interest and gets you off schedule on your principal payments. At 25% interest this can put you behind by 3-4 years.

If you deferred any of the late payments to the end of the loan that would explain things as well. 1 deferred loan payment in the first couple years at this interest rate will delay you 5-6 months since interest never stops calculating. So in your case 2 deferments get you like 1 year behind in payments. Plus interest for being late on the principal.

So my guess is the balance is correct. You could ask for a detailed statement with principal/interest paid info for each payment. My hunch is you have had several payments that were 100% interest due to being behind especially if it happened in the first 1-2 year of the loan.

So although it helps you in the short term your goal if you defer the plan has to be to pay that amount back with interest ASAP on top of your normal payments to get you back on schedule.

The thing you need to worry about now is April 2017 at the current rate you are paying the car won't be paid off when the term of the loan is up and I believe they can demand payment in full for the outstanding balance.

At your current rate of paying 480 a month you will still owe somewhere are between 13k & 14k assuming 480 a month with no more late payments. The scary thing here is the balance remaining is due when the loan hits it's end date. So they can legally ask you for the remaining balance owed all at that time start reporting 30, 60, 90, 120 days late to even charge off and repossession.

My advice is figure out what your car is worth and a plan to at a minimum get it to a amount owed that can be refinanced at better terms or devise a plan to pay of the entire $17,500+ interest between now and April 2017.

If neither of the above is an option then you may have to look into harder decisions. I was in a similar situation and ended up having to let the vehicle go bought a $1500 car and 5 years later I am better than I was. Paying for the car plus meeting child support obligations wasn't possible on my income so I chose my kids over my car/credit.

If you have any other questions let me know I wish I had a better answer to magically resolve things but unfortunately do not.

Good luck!

Re: Is my car loan company screwing me over?

Ragelog — Mon, 09 Mar 2015 18:35:46 GMT

To pay off the car between now and April 2017 your payments would be around $905.00 to 935.00 a month.

Just more useful info.

What kind of car is it? Year, make, model? How many miles? Any options of note?

Trying to determine a NADA retail value.