@cjc343 wrote:
@JagerBombs89 wrote:Quick question on this... Let's say you you make a $400 payment on your $500 5 year loan. This now pushes your payment back by 48 months. Do you pay interest for those 48 months? How does interest work since your not applying payments to your principal balance but rather paying ahead?
Here's my post from earlier in the thread using a $458 prepayment, still no guarantees on the math, and I'd still love to know if anyone has succeeded in pushing regular (monthly) payments from their bank:
@cjc343 wrote:First, some math, may or may not be correct...
A $500 savings-secured loan with a 48 month term is taken out at 2.9%.
The payments come out to $11.05/mo. Assuming no prepayment, a total of about $30.16 is paid in interest.
If $458 is immediately paid back, a $42 balance is left. Since the majority of the interest is no longer to be paid, approximately 3 billing periods are removed from the loan.
A $1/mo (actually $0.99) payment will cause the loan to be fully paid after 45 months without ever generating a statement with a nonzero minimum payment.
Total interest paid over 45 months is ~$2.38.
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Some questions, may not all be answerable, but if you know any of them or have any insight, it'd be much appreciated:
1. Any reasons why the math above is not true?
2. Earlier in the thread it sounded like Alliant will not support $1 recurring monthly transfers. Can I push payment from my bank account (bill pay) directly to the loan instead? Or must each payment be set up manually through Alliant?
3. Is there a limit to the number of savings secured loans you can have open at once (with Alliant)?
4. Is there a # of installment lines where further open installment lines no longer have a positive impact on scoring?
5. Is there an installment utilization rate below which further decreasing utilization (by opening and prepaying more or larger secured loans) no longer has a positive impact on scoring?
Thanks for the update. I didn't search each post to see if it was covered. However, I thought that "prepayments" were treated differently than "principal payments"? And by different, I thought that even if you prepay something, you still pay the interest for those months, since the payments are applied to the backend of the loan. If you wanted to avoid interest, you would need to make the principal-only payment. Thus, even if you make a $458 payment, $20 of that *may* be interest that is being prepaid before being applied to interest.
I hope that made sense, lol. This is what I was trying to find out for sure. However, hopefully your calculations are correct and you only pay like $2 in interest 
@JagerBombs89 wrote:Thanks for the update. I didn't search each post to see if it was covered. However, I thought that "prepayments" were treated differently than "principal payments"? And by different, I thought that even if you prepay something, you still pay the interest for those months, since the payments are applied to the backend of the loan. If you wanted to avoid interest, you would need to make the principal-only payment. Thus, even if you make a $458 payment, $20 of that *may* be interest that is being prepaid before being applied to interest.
I hope that made sense, lol. This is what I was trying to find out for sure. However, hopefully your calculations are correct and you only pay like $2 in interest
Makes perfect sense and at the heart of it, that's exactly what I'm trying to figure out I just phrased it in terms of asking people to validate my math. If I screwed up the math because I didn't understand how the prepayments are being applied to and affecting the loan, and the amount of interest paid isn't changing, I want to know...
