Just wanted to vent and see what you guys think.

I financed my 09 TSX last April with a finance (from American Honda Finance) for 5.99. The rate is around average and Im was only 24 with any credit cards(I only have school loans).

Anyways I purchased the car at base price ($28,900) and I owned $4000 on my leased 06 Honda Accord. I know it wasnt the best decision to trade in negative equity but I needed to get out of my lease (mileage restrictions and ballon payment).

I ended up financing for $35,254.44/6yrs. I planned on paying of the car early by paying the principal only. I did this for the last 3-4 months and I found out that I owned money??? The problem is that the interest that Acura does not consider Principal Payments the same as "monthly payments". I spoke to several Customer service people from Acura and they told me it was best to always pay the monthly payment first then mail off addtional monies to the seperate mailing address.

What do you guys think is the best option to paying down my principal owned?

Thx

 

When I financed by 2006 tsx, thru Honda Finance, in Nov. 06. I would pay the monthly payment and then add extra to be applied to principal. My loan for $10,000 was paid off 3 years early.

 

I always just paid my entire bill plus a few hundred extra bucks to knock the total down. I had a 5 year loan and paid it off in about half the time.

I would recommend you getting a credit card with a low credit line and just charge some groceries or something cheap on there every month so you can build up a little credit.

 

Maybe I am not understanding you. Did you pay your full payment + extra or did you skip the interest?

The only way to pay principal only and avoid interest is to not finance it (for greater than 0%).. otherwise you should be adding money to your full payments (which you might be and I just didnt understand). You will see a savings in interest if you pay early by adding to your full payment each month.

 

Sorry if i wasnt clear. Intially I was paying the monthly fee and adding extra to it. Then I found out you could pay "principal only" and I started do that. My error was that I stopped paying the "seperate" monthly fee. Thats why i got my statement showing an past due balance. Thx 4 ur advice. Im on the right track now.

 

most auto loans are daily interest. meaning you acrue interest each day based on the current balance of the loan. the lower the loan balance, the lower the interest, just like the fewer days between payments, the lower the interest. principal only payments do not advance due dates. Like others have told you, just add extra to your monthly payments, it will bring your balance down faster (which means less interest).

 

This financial auto loan calculator I found awhile back helped me out a lot: http://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx

On my loan I financed with Acura, if I pay an extra $100 a month on a $25k loan with 2.9% APR, I'd pay off the loan a year earlier.