interest vs capital... just checking

Easter Bunny

Easter Bunny

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just making sure i don't do the wrong thing. mfc says i should let them know afzer making a manual contribution whether i want it deducted from the interest or the capital.

if i do interest, then they score and i end up paying the same amount as i would have if i just went for the straight 5 years. making a contribution towards capital will essentially bring down the amount outstanding as well as the interest, thereby saving me money... right?
 
I don't see how they can even ask the question. It should default to capital unless you are in arrears imo.
 
On that topic, would it be possible for me to increase the payment amount? Say I pay 4k, can I bump that up to 5k without having to make a manual payment every month?

Soz to 'jack your thread.
 
Jase said:
On that topic, would it be possible for me to increase the payment amount? Say I pay 4k, can I bump that up to 5k without having to make a manual payment every month?

Soz to 'jack your thread.
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Yeah I'd appreciate an answer to your and the OP's question as well. I was also told I have to contact them if I make additional deposits, otherwise they'll do whatever scores them money.
 
Wyzak said:
I don't see how they can even ask the question. It should default to capital unless you are in arrears imo.
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I agree 100% with this ^^^^

Sounds totally strange and WRONG for them to even ask this.

AFAIK if you pay more than your installment, you will decrease the the payment period and save yourself interest.

Even paying R500 more on your installment on a R100,000.00 over 5 years can save you something like R10,000.00.

Any financial institution that does not operate on the above principal are crooks in my book.
 
When you pay into your capital you'll need to ask your bank to recalculate your debt and installment amounts - else this just pays your car off sooner but make no difference to your interest/monthly installments. (ask MFC how they cater for this)

This is a bit of a process so it's often better to just save up into another (savings, investment) account for a few months and make a single bulk payment.
 
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Joker said:
When you pay into your capital you'll need to ask your bank to recalculate your debt and installment amounts - else this just pays your car off sooner but make no difference to your interest/monthly installments. (ask MFC how they cater for this)

This is a bit of a process so it's often better to just save up into another (savings, investment) account for a few months and make a single bulk payment.
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You'll save interest, but your monthly installment won't change. If you ask them to recalculate, then the installment will go down as well.

Easter Bunny said:
just making sure i don't do the wrong thing. mfc says i should let them know afzer making a manual contribution whether i want it deducted from the interest or the capital.

if i do interest, then they score and i end up paying the same amount as i would have if i just went for the straight 5 years. making a contribution towards capital will essentially bring down the amount outstanding as well as the interest, thereby saving me money... right?
Click to expand...
They can't separate them. The interest is calculated on the diminishing amount of capital owed each month. The amount you pay then gets subtracted from the total. It would be illegal for them to be charging you all the interest for the full term upfront and then only subtracting from that until it is paid before cutting into the capital amount.

Jase said:
On that topic, would it be possible for me to increase the payment amount? Say I pay 4k, can I bump that up to 5k without having to make a manual payment every month?
Click to expand...
Set up an automated EFT on your internet banking or go into the bank to have it done.
 
they probably do that in the hope that someone pays off the interest first and then they score out of it. i should have asked what the difference is to hear what story she spins me. financial institutions in this country aren't in it to help you. not even remotely. they want to screw you over as much as they want whether you notice or not.
 
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