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? about over payment to ford credit ( need help)

505 Views 9 Replies 8 Participants Last post by  01GTCOUPE
I am not sure if I should be doing this or not. Sense I am deployed i have a small insurance bill 30 bucks, so all the extra has been going into my payments. Now the question is this:
Payment due 400
payment made 700
next months bill comes in
bill is 100
if i pay 700 again then I dont have a bill the next month
so all this extra I have been paying does it go to the interest untill the car is payed off, any help in thanked in advanced. I need some addvice on if i should keep paying over or not and what the extra cash is paying
thanks Travis
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If you are going to send in extra money make sure that you send two checks, one for your pymnt and one for the extra. Make sure that on the second check you put on there that it should go towards the principal only. On the other hand, if you got the 0 percent, you should not send any extra because you are not paying any interest.
Gatomalo, In your reply you state that If you have the 0 percent financing you don't need to pay any extra...What are the downsides to paying extra with the 0 percent?...just curious...I ask this question because, when I have a little extra I like to pay a little more...this should only shorten the amount of time that I owe Ford, right?
If you have a loan for 0% and you have extra money to burn, you should never pay the loan off quicker. Why?....

Because you can take the extra money and put it into another form of investment that earns a percentage of income for you. Even if it's only a couple percent in a bank savings account. That's money that you never would have made if you pay the loan off earlier.

When you have a 0% loan, you NEVER pay it off early. The only loans that you pay off early are the ones that are costing you a higher percentage in interest than you can earn on your own in the open market.

The reason people pay off loans early is when the interest is high.

A 0% loan is money in YOUR bank. Keep it there.
Thanks 01GTCOUPE, that makes perfect sense! I am young and this is my first new car. Just go married in June too :smile: so we are still learning how to manage our money more effectively.
Well put... Now you sound like my boss, VP Finance, and our cost accountant. Hope more of us got the 0%. Got lucky as both the Bullitt and my wifes '00 Intrepid R/T are at 0%.
0% intrest = Use of money for free. Do not pay off early. Pay off credit cards or high interest loans (most bang for the buck), if you have no other debt then set up a money market account or savings account. If you have a decent savings then invest money in a safe mutual fund. Now is the time to buy if you can as the share prices are low and will head up again. When you say????? Who knows but they will go up again, get them while they are cheap and invest for the long run.

Note: If you make a payment larger than whats due the remainder will likly be put towards your principal. Do not think that because you payed more one month you can pay less the next (some credit cards allow this, but it's only because they want your principal to stay as high as possible). This could get you in hot water with most bank loans unless you have made prior arrangements. Remember getting out of high interest debt is one of the best finacial moves you can make. The next best is to stay that way. Time far another beer all this think'in made thristy!!!!!!
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WARNING: Long Rant Ahead!

I bought my car a little too early for the 0% deals.. I did notice however the loan that I pay on includes all interest and service costs of the entire note. Meaning the amount financed includes the finance charges including the interest for the life of the complete loan!.. meaning that if I pay extra I am just cutting the amount of time that I repay the loan, not saving myself any money.. just like a 0% loan even though it isn't.

This means that I can't save myself money by prepaying the loan! Something I am very upset with Ford about not disclosing and myself for not asking and assuming. Ford structured the loan to guarantee they got every last cent out of me on the financing. This alone of me may be enough not to buy a car from them in the future.

Better check. We non-0% loaners are prolly all getting screwed like this!

What really p*sses me off about this is that I have worked very hard over the last several year to clean my credit up to near perfect.. I got a good interest rate from Ford and thought I had done well.. Then I learn how they structured the loan, just like a non-standard note (lousy credit)!

SHAME on Ford Credit!
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If you are not happy with the Ford Motor Credit loan. Pay it OFF. REFIANCE the note. Just like your house note, shop the note, check out state Farm bank if you have state farm Insurance.Check on Credit life on the loan at State Farm.If you have 0% leave it as is. Take the extra funds and buy US Savings Bonds. I Bonds are paying higher than any CD or Money Market Account. I Bonds are tax free when you cash them in.
Just my 2 cents.

Ready to Rock and Roll

<font size=-1>[ This Message was edited by: mb4875 on 2002-02-15 08:07 ]</font>
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As a side note,

I just paid off my Bullitt car loan by taking out a home equity loan.

Now I'm only paying half the interest and the interest I do pay is deductable. I probably will save $3000 over the life of the loan.

Dropping interest rates do have their advantages.
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