Re: Can I only pay my principle on my car note and...
New Member

# Can I only pay my principle on my car note and not be penalized?

I pay a little over \$300 a month and in 10 months I've only contributed \$500 towards the loan amount...>:-[

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Level 15

# Other financial discussions

You'll have to talk with the lender about that, as it depends on the terms of your loan. I seriously doubt however, the lender will do that. But if your payments are only \$300 a month, if you pay more than that each month the  additional amount will reduce the principle by that additional amount, resulting in less of each payment going towards the interest, more going towards the principle, and you'll pay off the loan that much faster and sooner.

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Returning Member

# Other financial discussions

In my personal experience, you are required to make the minimum monthly payment that contributes to the interest and principal balance. When making payments, there have been options to make additional payments towards the principal only. That will reduce your overall balance and reduce the overall interest you pay over time.
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# Other financial discussions

Can i
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# Other financial discussions

Short answer is no. Loans are amortized in a way that at the beginning of the loan you are paying mostly interest and at the end you are paying mostly principle. That is why you havenâ€™t paid much down on the principle. Say your loan is a 6 year loan. At 3 years in, half of you payment will go to principle and the other half toward interest. The first year years more interest than principle and the second 3 years more principle than interest. Think of the letter X on a graph where the top left line is interest and the bottom left line is principle.
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Level 15

# Other financial discussions

I had a 30 year mortgage on one of my rental properties that I purchased in 2002. By adding \$100 a month to each payment I paid off this property in less than 15 years. Now there is a formula one can use in an Excel spreadsheet that allows you to "plug in" values such as payment period, amount, interest rate and loan term. It will show you how long it will take to pay off a mortgage by changing the monthly payment (or whatever the payment period is, if not monthly.)

Now on the attached Excel spreadsheet I've set it up for monthly payments using the same formula that banks use to figure interest rate based on your outstanding balance each month.. In the first line of figure (line 3 on the attached) you can change the figures in columns A, B and C of row 3 with whatever your loan amount is, the monthly payment, and the Interest rate. You can change your monthly payment to see what difference it will make on your time to pay off the loan.  The items you can change are in bold print. The sheet is password protected so that you can only change the variables and not accidentally mess up the formula. But if you want to play with it, I've set the password on this uploaded copy to "password" (without the quotation marks) so you can unprotect it if desired.

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# Other financial discussions

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New Member

# Other financial discussions

U don't know what you talking about. You can pay towards the principal anytime, still paying your monthly payments as required. Paying towards your principal will help you pay your car note faster. I used to sell cars.
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Level 15

# Other financial discussions

When you make a car payment (or almost any type of loan payment) the first thing that payment is applied to is the interest due with that payment. Next, if the payment is late then any late fees, fines or penalties are subtracted from the payment. Then what is left is applied to the principle. So if your car payment is \$300 a month and you want to pay \$400 you can most certainly do that. Doing so will knock down your principle an additional \$100 for that month.

But No, you can not pay *ONLY* the principle. In some situations you can pay only the interest. But unless you've got some kind of weird loan agreement (which would not be provided by a legitimate lender) you can not pay *ONLY* the principle.

I've helped friends in situations where they could not make a mortgage payment one month. So we called the bank prior to the due date of the payment and they allowed payment of interest only for that month and just tacked an additional payment on the end of the 360 month loan. This allowed the borrower to get through a rough month (major car repairs) and still keep their credit and payment history intact.

"U don't know what you talking about."

Selling cars does not mean one understands how loans work. Loans can be set up many ways, and in a fair number of cases conditions of the loans can be altered when doing so is favorable to the lender first, and the borrower second. Additionally, personal attacks in this public forum are uncalled for and serve no purpose. That's what facebook is for.

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New Member

# Other financial discussions

I would be very interested in this formula for excel.
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Level 15

# Other financial discussions

Only images are allowed to be posted as an attachment to posts in this forum. So I can't attach the excel document. Additionally, you can't post e-mail addresses on the public side either. So if you'll send me your e-mail in a private message on this board, I'll be happy to e-mail the document.

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Hello
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Returning Member

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I need to buy one car
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What Insurance is this
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New Member

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Yes Can You Email Me ?
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