Sorry, I’m grammar freak…
“their” not “there”
The only reason I question is b/c this is there way of building money.
Even if I make huge payments to the principal, do they still make money from interest when I cut down the length of the loan?
Do Banks Get Po’ed When You Pay a Car Loan Off 1 Year After Refinancing with Them?
No, they don’t care because you will still pay the entire amount including finance charges. They make the same amount regardless of whether you pay it off early or not.
The amount you financed your car for includes the finance charges, and is the amount you are obligated to pay. Paying early does not change that amount. It just compounds it into your payoff amount.
who cares if they get pissed off. it won’taffect ur credit. it will only improve ur credit if u dont have outstanding debt.
Paying early DOES lower the total amount you will pay. Which is why you DO want to pay it early. They may get a small upset but that’s ok. They’ll finance you shortly when your buying that $60,000 ride.
It is better to pay it off as soon as you can weather they get mad or not. It only effects your credit in a positive way in that your available credit compared to dbt goes up and that raises your score. Plus you don’t have to pay all the interest you would have if you carried out the remainder of the loan so do it if you can.
No. They’d prefer you to pay it off in full so there is no risk of having to repo another car. Auto repos are at a catastrophic rate today. They’d be very pleased to have you pay it off early.
But whether or not it can help you pay less on finance charges depends on if your auto loan is Rule 78 or not. Simply place, Rule 78 means you’ll pay the entire interest amount, even if you pay off the loan early. You’re obligated to pay the full APR along with the principal.
Most car loans are not Rule 78. You’ll get an interest rebate if you pay if off before the contract end date. The sooner you do, the less finance charges you’ll fork out.