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I got a car loan thru GM Financial last year around this time, and I have been making 2 paymnets per month. They just keep sending me notices that ther eis 0.00 due this month, actually I think I have made 24 payments in 12 months. My intention was to make the double payments so I could reduce the principal instead of not having to make a payment the next month. The contract has a no penalty for early payoff clause, how do I mke them start applying the overages I pay to the principal?

David

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Your payments should be going to the principal. What matters the most is how your interest is compounded. You should call to find out. Most auto loan bills show how many payments have been made over the life of the loan so it should tell you.

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This is a better situation for you. My student loans do the same thing. The payments are reducing your balance. What's good about this is the fact that if you get laid off or have some sort of disaster you won't be required to make payment for a long period of time. So, best of both worlds for you.

Back end, front end, doesn't matter. The remaining balance is the key number and you pay interest on that figure anyway.

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This is a better situation for you. My student loans do the same thing. The payments are reducing your balance. What's good about this is the fact that if you get laid off or have some sort of disaster you won't be required to make payment for a long period of time. So, best of both worlds for you.

Back end, front end, doesn't matter. The remaining balance is the key number and you pay interest on that figure anyway.

This is good advice. Plus, you won't pay interest on the amount of principle you pre-pay.

If you're up for an interesting read about pre-payments gone awry, check out the case law for this.

Richardson vs. Fleet, Equifax, Experian, TransUnion and Portfolio Recovery Associates

It's in the 623 letter section of the board.

Scroll down past all the legal-speak, to where it says; ll: BACKROUND

It's enough to make you want to stay on top of this.

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