topic Re: Needing advice on how to pay down high interest. Santander Auto Loan in Auto Loans

Needing advice on how to pay down high interest. Santander Auto Loan

Anonymous — Mon, 27 Apr 2015 19:36:30 GMT

Hello,

I financed a vehicle through Santander Consumer USA in October 2011 and have literally made no progress in paying down the principal. As it stands my account balance is $14,706.03 at a rate of 23.44% and am upside down in the vehicle. Since I see that I am going to have to get on top of things as far as how I pay this loan in order to try and make a good effort to rid myself of it, I would like to know some of your feedback as far as how often I should try and pay towards the loan and how much at a time to try and apply more towards principal. I have tackled almost 7k in debt and eliminated my student loan and all other petty debts except for my 2 credit cards that I pay the balance down on every month, with that being said, I now have more income to put towards paying this car off and just need to know what method I should take to try and eliminate more principal from the loan. Any help is greatly appreciated. Thanks

Re: Needing advice on how to pay down high interest. Santander Auto Loan

Kathy4NU — Mon, 27 Apr 2015 20:42:34 GMT

What kind of car? What are the terms? HOw many years have you been paying?

Re: Needing advice on how to pay down high interest. Santander Auto Loan

Anonymous — Tue, 28 Apr 2015 12:26:29 GMT

It is a simple interest loan for 72 months at 23.44%. Never had any late payments but at one point had to defer a few payments which apparently they just tack on to the back of the loan, but as of right now the balance is 14,706.03 and i believe the original loan was around 16 or 17k. Just needing to find an effective way to pay the principal down now that I have better means. The car is a 2010 Dodge Charger SXT by the way.

Re: Needing advice on how to pay down high interest. Santander Auto Loan

ezdriver — Tue, 28 Apr 2015 13:15:50 GMT

Have you tried refinancing it? That is a much better solution because you won't make much of a "dent" in your principal balance by making extra payments ... you'll just shorten the life of the loan.

Re: Needing advice on how to pay down high interest. Santander Auto Loan

StartingOver10 — Tue, 28 Apr 2015 16:35:07 GMT

@ezdriver wrote:
Have you tried refinancing it? That is a much better solution because you won't make much of a "dent" in your principal balance by making extra payments ... you'll just shorten the life of the loan.
^^^This is the best way, refinance it.

But if your issue is that you can't refi the loan due to the age of the vehicle or the milage or the value of the vehicle relative to the loan, then any dollar ymadou pay over the interest amount due in your payment will apply to your principal balance. Some lenders have a special way for you to pay down your principal balance - like a separate payment made at the time of payment. You have to ask your lender that question or check their website.

If you have deferred payments then yes, those continue to accrue interest during the life of the loan until paid.

If you can, set up an extra principal payment for every month in an amount that works for you. That way you won't have a surprise at the end of the loan - those deferred payments due plus the accrued interest.

Re: Needing advice on how to pay down high interest. Santander Auto Loan

Anonymous — Tue, 28 Apr 2015 18:13:13 GMT

OK Thank you. It is just frustrating at times because it seems like when I monitor my payments on the website there is an area where it shows how much of each payment is going towards principal and how much is going towards interest and the longer I wait in between payments, the more of whatever I pay on the next payment will be majority interest.

Re: Needing advice on how to pay down high interest. Santander Auto Loan

Anonymous — Tue, 28 Apr 2015 18:15:06 GMT

And although I have gotten several prequalified offers in the mail from capital one for refinancing, as well as being a capital one cardholder. I'm not so sure how it would go over getting another hard inquiry on my report just to be told no because of the negative equity in the vehicle.

Re: Needing advice on how to pay down high interest. Santander Auto Loan

StartingOver10 — Tue, 28 Apr 2015 19:29:34 GMT

@Anonymous wrote:
OK Thank you. It is just frustrating at times because it seems like when I monitor my payments on the website there is an area where it shows how much of each payment is going towards principal and how much is going towards interest and the longer I wait in between payments, the more of whatever I pay on the next payment will be majority interest.

^^^This is true for any simple interest loan. If you were to make two payments per month, for example, you would notice that the interest is calculated on the outstanding principal balance for the days from the last payment date and with the second payment you would have just a few dollars interest and the balance is applied to your principal. Try it. All simple interest works this way. It is the calculation of your outstanding balance for the number of days it is outstanding. At the top of this page there is a formula to calculate it.

As you noticed, the thing that hurts the most is the rate you are paying. In order to pay less in interest dollars you have to acclerate the loan payoff or refinance into a lower rate interest. Some people do a two step process, aggressivly pay down their loan to get it so that it is able to be refinanced (less negative equity) and then they refi with a CU.

What is your vehicle worth and what is the outstanding loan balance?

Re: Needing advice on how to pay down high interest. Santander Auto Loan

Anonymous — Wed, 29 Apr 2015 02:39:06 GMT

What about a credit union??. Nfcu?.
Try capital one whats the worst... An inquiry..?..theres a 50 50 with capital one and will definetlybe lower..
Pfff go ahead and leave freaken santander...
My brother let a mazda 06 rx8 go to repo.. I cosigned so im messedup for few years now...