Car Loan Interest

O

oober

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I've been paying in some extra money each month to shorten my loan period and I noticed that they are not taking into account the extra money when doing the interest calculation. The interest seems to still be based on the amount it would have been before extra payments.

Can I just call them and ask to recapitalize(right word?) the loan so that my interest will drop or will they balk at this?
 
oober said:
I've been paying in some extra money each month to shorten my loan period and I noticed that they are not taking into account the extra money when doing the interest calculation. The interest seems to still be based on the amount it would have been before extra payments.

Can I just call them and ask to recapitalize(right word?) the loan so that my interest will drop or will they balk at this?
Click to expand...
Which car finance company?
Are you sure they're not taking it into account? You should see an interest rebate on your statement.
 
Sinbad said:
Which car finance company?
Are you sure they're not taking it into account? You should see an interest rebate on your statement.
Click to expand...

Wesbank, ahh thanks. I just read interest:) Yes there is a rebate also. Yay.
 
There are different loan options, if you are shortening the loan period that doesn't affect the interest amount...

Another would drop the monthly instalment amount but keep the loan period the same...

Confirm with the bank which you are on....
 
x S1 x said:
There are different loan options, if you are shortening the loan period that doesn't affect the interest amount...

Another would drop the monthly instalment amount but keep the loan period the same...

Confirm with the bank which you are on....
Click to expand...

Incorrect.
 
x S1 x said:
There are different loan options, if you are shortening the loan period that doesn't affect the monthly interest amount... - shortens payment period, monthly installment stays as though you paid nothing extra

Another would drop the monthly instalment amount but keep the loan period the same... if normal is R2500, and you already paid R500, then they take R2000. If you next month pay in R1000......

but you have to tell the bank what you want done.
personally I would opt for maintaining monthly amount, then pay less months, rather than less per month over full period.

Confirm with the bank which you are on....
Click to expand...

/made a few changes to your post.

And that is how it was explained to me.
/have already shortened repayment period by 6 months
 
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