Financing Issues
06-17-2009, 12:29 PM
#1
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Thread Starter
Financing Issues
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
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
06-17-2009, 12:58 PM
#2
it's a car-drive it
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
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
06-17-2009, 01:25 PM
#3
Senior Moderator
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.
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.
06-17-2009, 01:50 PM
#4
Intermediate
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.
06-17-2009, 02:34 PM
#5
Advanced
Thread Starter
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.
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.
06-17-2009, 03:13 PM
#6
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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).
06-22-2009, 05:40 AM
#7
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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.
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.
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