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My initial auto loan was ~$31500, 60 month, ~6%. Payment is $606.
I made one minimum payment and than put $3300. Payment and due date did not changed. I would expect payment reduction.
Loan is with Lexus financial.
Do I have any option to reduce the payment?
I would prefer something with minimum or no fees. I believe it is kind of big negative balance on the car, something like 7-8 thousand.
Credit inquiries: 18.
You're dealing with an amortized loan - all auto loans are amortized similarly.
In the beginning of the loan life (and if you're just one or two payments into 60, you are at the very beginning of your loan's life), a vast majority of each payment amount is going to interest. You are not making dents in your principal until you get much further into your loan life. The lender will take extra payments and (should) apply them to principal. This is not reflected in any change whatsoever in your agreed-upon monthly payment amount. What it does do is shorten the loan life by a few months at the end, since those payments - which under the amortization schedule are at that point primarily made up of principal - are basically prepaid, now.
So what does that mean for you?
Making additional principal payments (like the $3300 one you already made) will lower your payoff amount, because it lowers your principal balance. This is how you will "kill" negative equity if you are wanting to refinance it or trade it in at some point in the future. Paying down the principal does not change the monthly payment amount, and with most lenders will not allow you to push the next payment due date - it will simply be subtracted from your principal and will "cancel" the last few payments from the end of the loan life. Basically, you agreed to pay principal and interest over the course of 5 years, and agreed to pay a set amount of interest to the lender for that.
The only way to lower your payments is going to be to refinance the loan with a different lender, should you qualify for a lower interest rate than the one you currently have. You do not have to wait any set amount of time to do this - I've seen folks refi on the first payment - but you must get a payoff quote from your current lender and see where you stand as far as how much money you'd need to borrow. Then you'd need to find a lender to loan you that amount at a lower interest rate, which will then lower your payments. The more principal you pay down (extra payments made on the original loan) before you do this, the less you will need to borrow from the new lender, and the lower your payments will be.
Thank you for explanation. It is all clear.
I have another Auto loan with chase. I paid minimum monthly payment every day and now my due date is in 2019. Basically they do move due date every payment. So, I expected the same with LF. However they just reduced the loan terms by about 5 month. My payoff is 26900 right now.
Which lenders charge less fees. I'm OK with the rates, I just would like to extend the terms back to 60 month and reduce the monthly payment.