toyota financial services

[HotLava]

Originally Posted by YourFearlessLeader

This is exactly the same thing as overpaying a monthly payment.

If you overpay by three months, do they still send you a statement the next month and bill you for your normal amount? On line people say if you over pay by three months and look at your account on line it will give you a payment due date of three months in the future.

[YourFearlessLeader]

My monthly bill never changed, but the balance due would change. The statement would say the normal monthly payment, and then the amount due. I guess for those who cant hold themselves accountable to a monthly payment after overpaying would benefit from your method.

[mkiisupra]

The real difference seems to be the end result of paying payments ahead versus paying down principle. What does the OP really want, to lower principle and pay every month or 'have a cushion' of pre-paid months? If one has the funds and said funds are dependable, the easier option is just to add on extra payments as YourFearlessLeader has suggested. If the OP wants to build up a buffer in case of hard times and perhaps 'skip' a payment sometime in the future, go with the 'other address, memo on second check' scenario. Either way ends up the essentially the same monetarily, as explained above.

Eric G

[Synack]

TFS is pretty awesome. This is my 2nd time using them. It's great.

[czar07]

Its really not that hard...everytime you make an extra payment, or overpay the bill, that extra money goes to reducing the principal, THUS reducing the interest you pay over the term of the loan. you cant just go pay $500 this month and $100 next month to balance shit out, thats not how loans work

[jflogerzi]

Originally Posted by SubieNate

I think YourFearlessLeader has it right. The payment stays the same, but the ratio of principal:interest paid per payment goes up as the principal decreases. They just keep the payment the same to make it convenient for you.

Nathan

Correct.

[jflogerzi]

Originally Posted by mkiisupra

The real difference seems to be the end result of paying payments ahead versus paying down principle. What does the OP really want, to lower principle and pay every month or 'have a cushion' of pre-paid months? If one has the funds and said funds are dependable, the easier option is just to add on extra payments as YourFearlessLeader has suggested. If the OP wants to build up a buffer in case of hard times and perhaps 'skip' a payment sometime in the future, go with the 'other address, memo on second check' scenario. Either way ends up the essentially the same monetarily, as explained above.

Eric G

Or OP is just responsible with his/her money

[gonzo]

No wonder the housing market crashed...


Understand your loans before you sign on the dotted line

[YourFearlessLeader]

LMAO! I was thinkig the same exact thing responding to this thread!!!

[mkiisupra]

Originally Posted by jflogerzi

Or OP is just responsible with his/her money

Agreed, that is implied in the choices as stated in the your included quote, and I was not judging the choice of the OP in the slightest. I have BTDT with exactly the same decisions about prepaying vs. paying down principle.

Eric G

[encity5]

Originally Posted by gonzo

No wonder the housing market crashed...


Understand your loans before you sign on the dotted line

What i understood and was told differs than what actually is shown to me afterwards. After the response from TFS it looks like what i understood originally is correct. Just that TFS online system does not display it clearly, or at all.

I was just looking for clarification after seeing inconsistencies, not to figure out how my loan works.

Im also sure that not everyone will account for every possible question that might come up in the future when they are signing their loan. Questions / concerns arising afterwards is still possible.

Obviously understanding the critical parts of your loan is crucial before you sign the loan, but how was i to understand that TFS doesnt display overpaying a monthly minimum goes towards the principle?

[Fortney]

To my understanding, the way my auto loan worked (with a different bank) was you pay the interest for your 3, 5, 6, however many years up front. so any additional payments i was making over my regular payment were being applied to paying the interest on my 5 year loan....apparently you pay the interest first, then after you've paid all of that off, they will start applying the rest to the principal....but they will collect their money first

so after 2 years of doing that, i called to ask what was going on and was told that and that if i wanted to make a principal payment, i had to call or go in to the bank to have it applied differently, if not i would just keep paying towards that interest.

not sure if it is the same with toyota yet, what i usually do is throw anything extra into another account then every 6 months or so call in a principal payment...haven't had the frs that long yet though...so i'm not sure what the procedure is quite yet.

[jeffsides]

It's based on a Per Diem. ( you pay interest on the amount you owe that day). That's why u pay more APR up front. Because your loan is the highest obviously at the beginning.

[gonzo]

Originally Posted by Fortney

To my understanding, the way my auto loan worked (with a different bank) was you pay the interest for your 3, 5, 6, however many years up front. so any additional payments i was making over my regular payment were being applied to paying the interest on my 5 year loan....apparently you pay the interest first, then after you've paid all of that off, they will start applying the rest to the principal....but they will collect their money first

This is not a simple interest loan, it is a rule of 78 loan and should be illegal because it is such a rip off...

http://en.wikipedia.org/wiki/Rule_of_78s


In the United States, the use of the Rule of 78s is prohibited in connection with mortgage refinancings and other consumer loans having a term exceeding 61 months.[1]

On March 15, 2001, in the U.S. 107th Congress, U.S. Rep. John LaFalce (D-NY 29), introduced H.R. 1054,[2] a bill to eliminate the use of the Rule of 78s in credit transactions. The bill was referred to the House Committee on Financial Services on the same day.[3] On April 10, 2001, the bill was referred to the Subcommittee on Financial Institutions and Consumer Credit, where it died with no further action taken.[3]