auto loan question

[debtfighter]

I recently refinanced my auto loan from 10.99% to 3.44% with credit union. Here is my issue....When I signed the loan i didn't realize that they added unemployment insurance to my loan. I couldn't figure out why my loan payments only went down 15.00 a month with the re-fi. After looking very closely at the loan I saw that the unemployment insurance in the amount of 4500.00 was on my loan. This was before I made my first payment. I immediately went to the credit union and told them that I never agreed to this added insurance and they removed it from  loan. However, my payment didn't go down after they did this. I tried to find out what was going on and no one could explain to me why payment didn't go down. Finally, I found out that that the insurance was removed but they didn't change the loan to reflect this. Instead of my loan payment being about 350.00 a month for 60 months I have a loan payment for 415.00 and my car will be payed off in about 52 months because the difference between 415.00 and 350.00 (about 65.00) will be applied to principal. I don't have any problem with making the payments but I am more worried about showing a higher payment than I really should have. I would have made the extra payment to the principal on my own anyways.

Will this affect my chances of getting another loan of any kind because of the higher payments? Is there anything I can do about this? Anyone have any experience similar to this? Any help is appreciated!!!

[settleordelete]

If both payments are within your budget then I would take the 52 months and pay it off faster. More money goes towards the principal every month as well.

As for the unemployment insurance...

Well, there are qualifying factors that are usually packaged with it. And if you become unemployed it doesn't mean you will directly qualify for something you're paying for every month. Those type of add-ons might require a ton of proof in order to benefit. Don't buy it.

[debtfighter]

I didn't buy the unemployment insurance. They removed it from the loan but instead of changing the loan payments they left them the same but more of my payment will go to the principal and my loan will be paid off in 52 months instead of the 60 months. My concern was that I might be trying to buy a car for my daughter in April and it looks like I have a higher payment for the duration of the loan. It looks like I have higher loan payment and less money to spend on other things.

[Appleman]

You are correct, when the next lender looks at your DTI (debt to income) ratio it will affect your loan ability.  Much will depend on your current income and debts obviously. Making $100,000 a year probably will not make much of a difference, making $30,000 a year and it may be a different story (assuming reasonable debt). I am not fishing for your income, just giving an example.

The good news about having that $4,500 applied to the principal early is that it will save you on the total amount of interest paid. I doubt they would re-do the loan to reflect the change and lower the payment. But, a nice and polite phone call to the branch manager would not cost you anything. Give them the rationale you used here, you will be looking for another car loan in the future and want the payment to be lower to improve your chances of being approved. Hopefully, they will see the benefit of re-working the loan with the hope of your future business.

[6speed8]

I agree with AppleMan. If you can handle the $415 per month then do it. I just think it's more benificial for you to have your listed payment as $350 but pay more on your own if you can.