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Guys,
My loan payment is due every 10 of the month. I always pay more than the minimum and over the months my payments have been due every 60 days as I pay extra.
My question is if my payment is due on 10 Jun as per the system and my last payment was made on 08 April and when 10 May arrives will system recognize that my payment is not due till Jun 10 and it wont raise a flag prompting as a no payment.
I hope its not confusing.
Thanks
Ed
It depends on the lender. Some lenders credit extra payments toward future payments because they like to stretch the term out and make more in interest.
But, some lenders apply any extra payment toward principle and still require that the minimum payment due is paid by the due date each month. So, if you make a payment during the previous statement cycle, the lender may not recognize this as the next month's "payment."
You should call the lender to ask. Also, I suggest that you pay the extra as you can, but continue to make sure you pay, just in case, prior to the due date in each statement cycle. You don't want to chance a "LATE" on your credit, especially when you are actually paying extra payments, but just paid too early to count.
I spoke to my lender before my payments start. If I make two payments and use two coupons then it will go towards my monthly payments. If I pay more than the required amout it automatically goes towards principle.
@Anonymous wrote:I spoke to my lender before my payments start. If I make two payments and use two coupons then it will go towards my monthly payments. If I pay more than the required amout it automatically goes towards principle.
As others have noted, it depends on the lender. With my most recent car loan (which I paid off in early 2008), Chase Auto Finance handled it in the most customer-friendly way possible: they immediately credited my extra payments to the principal (thus lowering my interest) AND they advanced the due date for my next payment, so I got the best of both worlds.
Thanks guys. Just spoke to my bank and any extra payment I make goes to the principal.
Ed