Unearned Interest Being Reported

[DarthJerek]

Financed a Chevy S-10 last year through TransSouth with a total loan of ~$12,500. 60-month loan (at outrageous interest, of course).

Always paid on-time - and even submitted extra payments to reduce the principal more quickly.

I discover (after joining this illustrious board) that the balance is being reported on the credit records as $19,000 and cents. I'm guessing that the amount reported includes unearned interest that I would eventually be paying, if I paid the entire thing off over the full 60 months.

This is, naturally, undesirable, as it runs up my apparent indebtedness.

Anyone else ever have this problem? I'm thinking my best remedy is to contact TranSouth directly and ask them to correct the error on all of the CRAs. Any insight (deep or otherwise) would be appreciated.

[Jazkal]

I can't speak to the legality of it.

But.... In my mind, if the interest hasn’t accrued yet, then I don’t owe it, yet. Just my $.02

[cabledude]

I'd bet this loan is one that was a fixed contract. What that means is that you can make more payments, but you will always owe 60 months worth of interest. Check your contract.

[J_Snow]

I'd bet this loan is one that was a fixed contract. What that means is that you can make more payments, but you will always owe 60 months worth of interest. Check your contract.

You need to check if it is a simple interest loan or not. SI loans dont accrue interest at the beginning of the loan-only monthly based on the outstanding balance. I think Cabledude might be onto something---Or they are just reporting inaccurate information which is a violation of the FCRA.

Check your docs or just call them up and ask them the balance and what type of loan you have.

J