Auto refinance

[Anonymous]

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@Anonymous wrote:
I plan on doing so, but rather save the 90 each month and make a larger payment towards principal at the end of the year. Thanks for the contribution.

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What is the benefit of saving it to the end of the year?  If you make that $90 payment in January, you will avoid 11 months of interest on it.  If you wait til the end of the year, you will have paid interest all year.  Interest on these loans is accumulated daily, so every day early you pay extra, you save money.

Maybe some loans are different, but with my past car loans, if I paid $100 extra, it automatically went to principal.  Your payment should go to interest that was accumulated during that month first, and then whatever is beyond the current interest should pay down principle.

[Anonymous]

I guess there is no benefit when you put it like that. I think I will do it your way but I'm not sure if I need to make a separate payment for principal or if its automatic.

[pizzadude]

You need to look at the specifics of your loan agreement ~ this will dictate exactly how extra payments are applied.   Sometimes they are credited towards principle, sometimes they are just applied towards next month's payment.

[Anonymous]

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@pizzadude wrote:

You need to look at the specifics of your loan agreement ~ this will dictate exactly how extra payments are applied.   Sometimes they are credited towards principle, sometimes they are just applied towards next month's payment.

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Good point.  I didn't realize not all were like mine was.  Definitely look at your loan agreement and perhaps even just call and ask your CU.

[Anonymous]

If your loan is with Wells Fargo Dealer Services, there is no difference. Just send in the payment and it will be allocated as follows: 

1.) Any interest that has accrued on the account

2.) Any other "fee" that may have been assessed (Late fee, NSF fee) 

3.) Principal

When you have paid enough to satisfy two payments your statement will show you a month ahead, just continue making the higher payment.