I think im being taken for a ride.......HELP!!!!!

[weirdmix]

I just contacted my finance company in regards to my auto loan, Being that i'm rebuilding my credit this loan is through Reliable Credit out of OR.

Now I signed a 36 month auto loan that is scheduled to end in 10/09 I have always paid my payment and have three remaining at $332.00, So I called to payoff the loan and was told that the payoff was $1588.92 when I asked why it was $600.00 over the agreed amount I was told that I had a series of slow pays " Not 30 days late" which is inaccurate I have always paid on time. They stated due to these slow pays this increased the amount of interest and "penalties" I had to pay.

When I asked why this was this way I was told and I quote "there is nothing more to it" and if I wanted to payoff my vehicle I would be required to pay the additional $600.00. But they would be willing to extend the terms of the contract if needed.

Is this legal? And what should my recourse be? any advice would be helpful

Thanks in advance

[DI]

You may get an answer by posting in the car loan forum.  Maybe a moderator will move your question for you.

[Anonymous]

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@weirdmix wrote:

I just contacted my finance company in regards to my auto loan, Being that i'm rebuilding my credit this loan is through Reliable Credit out of OR.

Now I signed a 36 month auto loan that is scheduled to end in 10/09 I have always paid my payment and have three remaining at $332.00, So I called to payoff the loan and was told that the payoff was $1588.92 when I asked why it was $600.00 over the agreed amount I was told that I had a series of slow pays " Not 30 days late" which is inaccurate I have always paid on time. They stated due to these slow pays this increased the amount of interest and "penalties" I had to pay.

When I asked why this was this way I was told and I quote "there is nothing more to it" and if I wanted to payoff my vehicle I would be required to pay the additional $600.00. But they would be willing to extend the terms of the contract if needed.

Is this legal? And what should my recourse be? any advice would be helpful

Thanks in advance

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1- Welcome to the forum!!

2- I am confused by the statement I color changed.

Did you always pay on time or did you have periods where you missed the firm due dates but still paid, while being under 30 days late?

Ie: payment due on March 10th your payment credits as paid on the 12th. You are under the window they usually have for penalty fees but the payment was still off the due date?

Also there are many loans that are set up  payment of XXX due march 10th, us payment is received after march 14th you owe XXX=$50.00

Installmet loans are ran this way. Definite due dates that equaled how much money you were to pay, with cumulative  interest factored. When that schedule is upset it all changes. Most people do not understand that as they are used to their credit cards. The problem you get is that 2 extra days where there was no payment interest still accrued that was not predicted to, that few dollars in interest adds up then each month as that also accrues interest creating a snow ball effect, couple that with a few late payment fees and that snowballs even greater. Add a high interest rate to begin with and yes it sure does add up.

Legal? Completely....and I might add proper.

If in any of those circumstances happend even though you paid your carpayment if you were past the actual due date when they credited, and yes you owe the additional monies and fees. 

If this never happened, and your payment was always credited by your due date, they got some explaining to do then.

BTW MANY PEOPLE DO THIS.

You are not alone.  It is especially evident with leases, but people just assume the fees are part of the turn in and do not understand how they made the additional monies owed. or they are trading in their 4 payments left 350 month car and do not question why the bank wants $1900 to retire the loan since they are getting a new car.

It gets worse: many people with mortgages get a real awakening when the go to make their 355 payment and find out that some earlier stupidity 15 years ago leaves them owing a few extra payments.

[guiness56]

Ask them for an accounting of your loan payment history.  See if the money adds up.

[Anonymous]

As long as payment posted by the actual due date, then no there should not be any additional interest or payments due other than 3 more payments.

The other poster is right however if payment posted AFTER the due date.  The contract you signed tells you the exact penny you pay in interest over the loan and that is on the assumption that you only pay the exact payment due by the due date for the length of the loan.

I have had 4 auto loans paid in full in my past.  I've never had to pay more than the amount of interest listed on the contract (I actually always ended up paying less interest b/c I paid them off early).

Also, if your mortgage payment posts by the 1st every month there aren't extra payments due at the end.  You get that penalty on the bill due immiedately if you pay after that date....no extra payments are due more than the 360 you sign up for.

[Anonymous]

If I understand correctly, then yes, if you were late on payments then you owe more money and here is why.

When you have a payment due, for example on the 1st, the interest is amortized for the month based upon that due date.  But if you pay late (after due date, not just 30 days), you accrue daily interest until the payment is made.  And all payments are applied first to interest and penalty and anything left is paid toward principle.  In addition to the daily interest, you may have incurred late fees as well.

Here is an example.  Let's say you have a loan of $10,000 at 18% interest for 36 months.  This means your monthly interest charge is 1.5% against the balance due, IF YOU PAY ON TIME, meaning by the due date.

If you do not pay by the due date, then you have a daily interest rate of .000493.  If you have an remaining loan balance of $8000 and you make your payment late, then you incur daily interest of $3.95 (.000493 * 8000) for each day late.

If you are 10 days late, then you have daily accrued interest of $39.50.  In addition, if they charge a late fee, say $20, then you have interest and penalty of $59.50.  When you finally make your payment, they take the normal monthly interest and apply it.  Then they take $39.50 toward daily interest (interest accrued from due date till actually paid) and then they take late fee, then anything left goes to principal.

If you have a series of late pays, then you have this scenario many times over.  Late pays, if not 30 days late, won't show on your credit, but they will have financial consequences from daily accrued interest and late fees.

IN ADDITION:  some finance companies charge a DEFAULT rate for late pays.  For example, if 10 days late the interest from that day forward, till caught up, accrues at a higher (default rate) meaning that your payment has even more than my example going toward interest.

This is my guess why your payoff is not what your original truth in lending/finance docs said.

Message Edited by txjohn on 08-12-2009 04:59 PM