So little did I know...

[Doubeleive]

that if I make the payment on my Car loan as soon as it's posted that I will pay less interest than if I wait until a couple days before it's due. I was looking over my loan and payments (I make a double payment each month) my payment is $553 plus I put another $500 towards the principal, and I saw interest was different each month normally going down each month but a couple months were more than the previous month and it all added up to how soon I made the payment, it can make almost a $100 difference towards the principal (now I feel like a dumbass, lol) so I guess it can depend on your type of loan but now I know.....

 

[kbuskill]

that if I make the payment on my Car loan as soon as it's posted that I will pay less interest than if I wait until a couple days before it's due. I was looking over my loan and payments (I make a double payment each month) my payment is $553 plus I put another $500 towards the principal, and I saw interest was different each month normally going down each month but a couple months were more than the previous month and it all added up to how soon I made the payment, it can make almost a $100 difference towards the principal (now I feel like a dumbass, lol) so I guess it can depend on your type of loan but now I know.....

Don't feel bad... lots of people don't understand how interest accrues....

I used to pay all my stuff weekly for this very reason. Your interest accrues daily so by paying weekly the interest can only accrue so much.

Example... $800 a month payment = $200 a week and some months have 5 weeks so that equals 1 extra months payment every year without even noticing you did it.

 

[Doubeleive]

Don't feel bad... lots of people don't understand how interest accrues....

I used to pay all my stuff weekly for this very reason. Your interest accrues daily so by paying weekly the interest can only accrue so much.

Example... $800 a month payment = $200 a week and some months have 5 weeks so that equals 1 extra months payment every year without even noticing you did it.

yep, so now I'm going to be on it, lol, just shaking my head that it took me this long to figure that out at least I have knocked 2 years off the loan already, 10 months or less and I will be done.

 

[kbuskill]

yep, so now I'm going to be on it, lol, just shaking my head that it took me this long to figure that out at least I have knocked 2 years off the loan already, 10 months or less and I will be done.

The other thing about paying weekly is after a couple months you are actually paid up ahead by a month or two and that is kinda nice in case you ever had an emergency and needed some extra cash one month you could actually not pay it and still be paid up.

 

[nadthomas]

I think banks have figured out that people have figured out the twice a month/early payment thing saves interest. The banks make less money on your loan if you do that. I asked about this on all of my current loans and I was told the payment is not posted until the due date or something like that so interest is calculated the same. So, I think they have updated the loan language to maximize their profit on a loan. Or the person I talked to was an idiot and/or they lied to me, and I'm an idiot for believing them.

Although kbskill point about paying weekly is still valid, because you will eventual make enough extra payments to payoff a loan early, and that will save you money/interest.

 

[Doubeleive]

I think banks have figured out that people have figured out the twice a month/early payment thing saves interest. The banks make less money on your loan if you do that. I asked about this on all of my current loans and I was told the payment is not posted until the due date or something like that so interest is calculated the same. So, I think they have updated the loan language to maximize their profit on a loan. Or the person I talked to was an idiot and/or they lied to me, and I'm an idiot for believing them.

Although kbskill point about paying weekly is still valid, because you will eventual make enough extra payments to payoff a loan early, and that will save you money/interest.

I just made my payment the other day as soon as I could it took off $60 in interest which made it only $43, 2 months ago when I paid just before the due date it was $149

 

[nadthomas]

I just made my payment the other day as soon as I could it took off $60 in interest which made it only $43, 2 months ago when I paid just before the due date it was $149

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I'm not saying what you said for your bank/loan isn't true, but when I asked about this to my bank, I was told on my loans the way they post payments and calculate interest it wouldn't make a difference.

I should probably just try it, and see if it does indeed make a difference. It certainly wouldn't be the first time that I found people to be incompetent at their job.

 

[sarneson91]

I've followed basically the same timeline as kbuskill, however for me its twice a month on single monthly payments, being in the Navy, it's just more practical, but I do "full payment" amounts bimonthly. By the time I get back from this deployment the tahoe will be paid off at right at a year early.

 

[Doubeleive]

I'm not saying what you said for your bank/loan isn't true, but when I asked about this to my bank, I was told on my loans the way they post payments and calculate interest it wouldn't make a difference.

I should probably just try it, and see if it does indeed make a difference. It certainly wouldn't be the first time that I found people to be incompetent at their job.

I don't know but I just know that the "due" amount shown now will not increase and it appears that I am paying less interest if I pay as soon as it is processed monthly and more is applied towards the principal when I do it that way. I googled it and got the same answer, based on a loan that accrues interest "daily"

 

[ncpepperman]

I don't know but I just know that the "due" amount shown now will not increase and it appears that I am paying less interest if I pay as soon as it is processed monthly and more is applied towards the principal when I do it that way. I googled it and got the same answer, based on a loan that accrues interest "daily"

Your interest amount will go down each month as the principle decreases. Make sure they are not just applying a payment to both if you're making an extra. Always have them apply extra $ to the principle. Many a time they have used it for a "payment" and not principle .

A home equity loan used to be a good way to finance a vehicle as the interest was deductible.

Here's a good link that will show you the figures...............

https://www.amortization-calc.com/auto-car-loan-calculator/