cjnrc

but the lender (car dealer) says my payoff amount is more than I think it should be. I figured out the amortization schedule using excel and also with an online calculator. Am I doing something wrong, or is the dealer?

I bought the car in mid December 04 with a loan of 22,620.10 and began payments starting January 31st. It's a 4 year loan at 4.4%APR. The monthly pymt is 515.73. The excel spreadsheet says the monthly payment should be 514.80 and that I should owe 19,121 for the August payment. The dealer says I should owe 19,715. It's only $594, but I hate giving away money to car dealers.

anothercls

Did you get the loan in the beginning of December of 04? If so, then you have a month of interest, but that still wouldn't make up for the $594, unless you already made the payment for this month and they haven't gotten it. the $80.00 extra on the payment would be the interest added throughout the month since the last bill.

I think the bank is right if when you talked to them they hadn't received this months payment.

cjnrc

I confirmed with them that they received my last payment.

I got the loan in mid December 04 and the first payment was due a month and a half later (Jan 31). So I guess they added in the first month interest. I just could not figure out a way to calculate this with excel.

-- Thanks for your help!

anothercls

http://tinyurl.com/8qwpv

That is what I used for the calculation. It still seems like there is a month payment missing.

chef chris

Well, from the day you sign the papers, you accumulate interest. Plus, we don't know what else was included in the payoff...probably a title-release fee from the bank, maybe an administration fee...Could even be a pre-payment penalty for early payoff. Also, you say the lender but you put 'dealer' in quotes...which is it? Maybe the dealer is giving you wrong info.

Look at your contract again and confirm the term & total amount financed in the Fed Box. You may be missing some info.

cjnrc

I spoke with them again and it looks like "the computer" chooses the date to calculate your payoff. Interestingly enough the computer chose the day after the next payment would be late, and added one month of interest. They want me to send in the higher amount and will refund me the overpayment. Well, let's just see what the computer does when I send them the correct amount...on time.

Thanks for your help!

zamo

^^ correct; they will always add interest for at least 10 more days in order to offset the snail mail delay. In case of overpayment, they will issue a check for the difference.

Happened to me.

kensteele

You should be aware that this is common. You WANT to overpay your loan to make sure it is entirely paid off and they send you a refund back for the extra amount. Because you can never calculate the exact amount. Otherwise, if they have a balance outstanding but the contract is done, they might charge-off the extra amount. Guess where the charge-off MIGHT show up? Not saying it is your fault or you are wrong and the bank is right, but this COULD happen, it happened to me, bank showed a $35 chargeoff for a consumer contract....years later. Of course I had to fix it, but.....

chef chris

Most reputable institutions give you a 10 day payoff and will even have a set amount of interest they will waive if the check is late(say something like $10 or $15).

Now...that's 'reputable' mind you. Finance companies or the like will just pay the loan ahead so they don't lose any interest and never tell you. A normal bank will advise you of non-payoff amount if it's a large payment, etc.

cjnrc

I did not realize this was a common practice. I feel better about it, thanks for the replies. I would have liked to have calculated the exact amount though. I suppose I'm just not the trusting type.