cancel
Showing results for 
Search instead for 
Did you mean: 

Car loan Advice

tag
AyaMai
Regular Contributor

Car loan Advice

My car loan $20418 in October 2021 was through Toyota Financial , interest rate 3.99% , term 72 months, monthly payment $319.84.  Remaining balance as of today is $8530.00, Amount Due $319.84, Due Date Nov 19, 2024. I have paid extra $5616 in the last 2 years, my question is do I continue paying the monthly payment plus extra payments to the principal or just the principal since my due date is Nov 19 2024. 

Message 1 of 10
9 REPLIES 9
citymunky
Frequent Contributor

Re: Car loan Advice


@AyaMai wrote:

My question is do I continue paying the monthly payment plus extra payments to the principal or just the principal since my due date is Nov 19 2024. 


 

Can you please rephrase this sentence. I am having a hard time understanding what you are trying to say.

 

However, if I think I know what you are trying to ask, my answer is your monthly payment on any loan is what you and bank agreed on to paid monthly, until the loan is paid in full. For the sake of monthly payments It doesn't matter that paid an extra $5k last month/last/year, etc, that monthly payment is due Nov.

Rebuilding since 2021


Closed CCs
USAA (Jul 2019| Settled CO), Jasper (Jul21-Jul 2022), Sable {Secured} (Jan22-Jun23), CreditOne Platinum (Jul21-Aug23)

Starting FICO 8 Scores:
Current FICO 8 Scores:

Message 2 of 10
JoeRockhead
Senior Contributor

Re: Car loan Advice

Being you've paid so much extra that you've pushed your minimum payment not due for another year, you could pay whatever you like to continue shortening your loan term, but why take your foot off the gas now (pun intended), I'd stay the course and continue the paydown as you have been (min payment amt + extra)

 

Guess the only reason you might consider easing up might be for extra cash for the upcoming holidays.

 

Nicely done though!

Message 3 of 10
AyaMai
Regular Contributor

Re: Car loan Advice

My next payment is in November 2024 which is 12 months ahead. 

Message 4 of 10
Horseshoez
Valued Contributor

Re: Car loan Advice


@AyaMai wrote:

My car loan $20418 in October 2021 was through Toyota Financial , interest rate 3.99% , term 72 months, monthly payment $319.84.  Remaining balance as of today is $8530.00, Amount Due $319.84, Due Date Nov 19, 2024. I have paid extra $5616 in the last 2 years, my question is do I continue paying the monthly payment plus extra payments to the principal or just the principal since my due date is Nov 19 2024. 


I'm not going to address whether or not you should stop making payments until next year, I am going to comment on why you made extra payments in the first place.  I'm from the camp of, "Why pay down a loan prematurely when savings accounts pay higher interest rates than being charged by the loan?"

 

Said another way, if you'd just paid the normal monthly payment to TFS and then put the extra money totalling $5,616 into a high yield account, you'd be ahead of where you are today.

I categorically refuse to do AZEO!
Message 5 of 10
AyaMai
Regular Contributor

Re: Car loan Advice


@JoeRockhead wrote:

Being you've paid so much extra that you've pushed your minimum payment not due for another year, you could pay whatever you like to continue shortening your loan term, but why take your foot off the gas now (pun intended), I'd stay the course and continue the paydown as you have been (min payment amt + extra)

 

Guess the only reason you might consider easing up might be for extra cash for the upcoming holidays.

 

Nicely done though!


I don't have intention not keeping paying the monthly payment, extra money towards the principal. I posted the question to have more knowledge about auto loans from you and others.  At this moment the interest on my  car loan is $29.31 and have 28 months left without paying extra money towards the principal 💰

Message 6 of 10
Brian_Earl_Spilner
Credit Mentor

Re: Car loan Advice

I think a lot of people here are misunderstanding the question. If you're looking to pay off the loan sooner you should be paying the extra to principle because that's what your interest is based on. You should have been doing that in the first place instead of pushing out your due date since the interest is frontend bias for your payments. You would have saved on the interest paid by applying the excess to principle in the first place. 

    
Message 7 of 10
Brian_Earl_Spilner
Credit Mentor

Re: Car loan Advice


@Horseshoez wrote:

@AyaMai wrote:

My car loan $20418 in October 2021 was through Toyota Financial , interest rate 3.99% , term 72 months, monthly payment $319.84.  Remaining balance as of today is $8530.00, Amount Due $319.84, Due Date Nov 19, 2024. I have paid extra $5616 in the last 2 years, my question is do I continue paying the monthly payment plus extra payments to the principal or just the principal since my due date is Nov 19 2024. 


I'm not going to address whether or not you should stop making payments until next year, I am going to comment on why you made extra payments in the first place.  I'm from the camp of, "Why pay down a loan prematurely when savings accounts pay higher interest rates than being charged by the loan?"

 

Said another way, if you'd just paid the normal monthly payment to TFS and then put the extra money totalling $5,616 into a high yield account, you'd be ahead of where you are today.


It boils down to preference. This is the right idea if you're trying to maximize your money working for you. But, some people would rather finish their car payments sooner than later to free up the monthly funds tied up in a loan. 

    
Message 8 of 10
AyaMai
Regular Contributor

Re: Car loan Advice


@Brian_Earl_Spilner wrote:

@Horseshoez wrote:

@AyaMai wrote:

My car loan $20418 in October 2021 was through Toyota Financial , interest rate 3.99% , term 72 months, monthly payment $319.84.  Remaining balance as of today is $8530.00, Amount Due $319.84, Due Date Nov 19, 2024. I have paid extra $5616 in the last 2 years, my question is do I continue paying the monthly payment plus extra payments to the principal or just the principal since my due date is Nov 19 2024. 


I'm not going to address whether or not you should stop making payments until next year, I am going to comment on why you made extra payments in the first place.  I'm from the camp of, "Why pay down a loan prematurely when savings accounts pay higher interest rates than being charged by the loan?"

 

Said another way, if you'd just paid the normal monthly payment to TFS and then put the extra money totalling $5,616 into a high yield account, you'd be ahead of where you are today.


It boils down to preference. This is the right idea if you're trying to maximize your money working for you. But, some people would rather finish their car payments sooner than later to free up the monthly funds tied up in a loan. 


@Horseshoez I do get your point, not disagreeing with you but as @Brian_Earl_Spilner It boils down to preference, whenever I had extra cash from work due to overtime, I would make extra payments towards my car loan, now I feel comfortable that crossed the psychological barrier that my loan is below 9K. Appreciate both of you taking the time to respond to my message & learn something new.

Message 9 of 10
babbles
Established Contributor

Re: Car loan Advice

my wife is paid up till about aug 2024 on her auto loan with NFCU but she continues to make her monthly payments as scheudled

Message 10 of 10
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.