USAA principle only payment

elim · ‎02-19-2015

so i'm making my first car payment today and noticed they have a simple checkbox to force a "principle only" payment.

is it best to make my minimum payment first each month and then make my overpayment afterwards with this box checked?

or does any overpayment reduce principle anyway?

grrrr lunch is over, back to work i go... thanks in advance

SamsungHDTV · ‎02-19-2015

I believe you just simply make one payment over the required payment without the box checked. For example if your required payment is $350 and you pay $400 without the checkbox then the extra $50 will automatically be applied to the principle.

This is how it is with my lender. I haven't used USAA, so maybe someone else who has USAA can chime in.

elim · ‎02-19-2015

@SamsungHDTV wrote:
I believe you just simply make one payment over the required payment without the box checked. For example if your required payment is $350 and you pay $400 without the checkbox then the extra $50 will automatically be applied to the principle.

This is how it is with my lender. I haven't used USAA, so maybe someone else who has USAA can chime in.

so i guess the difference is...

making an overpayment will push back my next payment due date (you can get ahead on payments)

making a principle payment after the minimum payment for that month will not (my monthly payment is due on the next due date)

apparently you save more on interest in the long run with "principle only payments" ???

maybe i'll pay ahead and give myself a 3 month buffer and then start paying principle only above my monthly payment to shorten the loan a little faster and pay less interest.

Anonymous · ‎02-19-2015

@elim wrote:
@SamsungHDTV wrote:
I believe you just simply make one payment over the required payment without the box checked. For example if your required payment is $350 and you pay $400 without the checkbox then the extra $50 will automatically be applied to the principle.

This is how it is with my lender. I haven't used USAA, so maybe someone else who has USAA can chime in.
so i guess the difference is...

making an overpayment will push back my next payment due date (you can get ahead on payments)
making a principle payment after the minimum payment for that month will not (my monthly payment is due on the next due date)

apparently you save more on interest in the long run with "principle only payments" ???

maybe i'll pay ahead and give myself a 3 month buffer and then start paying principle only above my monthly payment to shorten the loan a little faster and pay less interest.

Nope, you have to actually check the principle only box for it all to be credited to principle. Learned the hard way there. If you don't check it effectively lowers your next monthly payment.

elim · ‎02-19-2015

@Anonymous wrote:
@elim wrote:
@SamsungHDTV wrote:
I believe you just simply make one payment over the required payment without the box checked. For example if your required payment is $350 and you pay $400 without the checkbox then the extra $50 will automatically be applied to the principle.

This is how it is with my lender. I haven't used USAA, so maybe someone else who has USAA can chime in.
so i guess the difference is...

making an overpayment will push back my next payment due date (you can get ahead on payments)
making a principle payment after the minimum payment for that month will not (my monthly payment is due on the next due date)

apparently you save more on interest in the long run with "principle only payments" ???

maybe i'll pay ahead and give myself a 3 month buffer and then start paying principle only above my monthly payment to shorten the loan a little faster and pay less interest.
Nope, you have to actually check the principle only box for it all to be credited to principle. Learned the hard way there. If you don't check it effectively lowers your next monthly payment.

thanks irish, thats what i thought i read.

so if you check the box it definitely shortens your loan, but you don't gain any buffer.

i think i'll just work on getting ahead for a few months. thanks again :]

Anonymous · ‎02-19-2015

@elim wrote:
@Anonymous wrote:
@elim wrote:
@SamsungHDTV wrote:
I believe you just simply make one payment over the required payment without the box checked. For example if your required payment is $350 and you pay $400 without the checkbox then the extra $50 will automatically be applied to the principle.

This is how it is with my lender. I haven't used USAA, so maybe someone else who has USAA can chime in.
so i guess the difference is...

making an overpayment will push back my next payment due date (you can get ahead on payments)
making a principle payment after the minimum payment for that month will not (my monthly payment is due on the next due date)

apparently you save more on interest in the long run with "principle only payments" ???

maybe i'll pay ahead and give myself a 3 month buffer and then start paying principle only above my monthly payment to shorten the loan a little faster and pay less interest.
Nope, you have to actually check the principle only box for it all to be credited to principle. Learned the hard way there. If you don't check it effectively lowers your next monthly payment.
thanks irish, thats what i thought i read.

so if you check the box it definitely shortens your loan, but you don't gain any buffer.

i think i'll just work on getting ahead for a few months. thanks again :]

No, good luck. That's what I'm doing with mine as well