Finally got access to my account via GMAC and when I did request payoff...its 700 dollars more then what I owe on my loan. Is this normal lol?

 

its prolly the interest added in for the total

 

yes sir thats normal

 

your right, just added up all my payments, original cost was 9k, at 13.70% interest and 66 months it was 6.6k in interest

well, paid off in 24 months, and I have currently paid in 10750 with 5.7k payoff.

That proves paying off early doesn't save on interest. I know not to do that again.

Edit; now that I think about it, the dealership even told me the payoff was 5k. So why would the dealership get 5k for the pay off while I had to pay 5.7k. GMAC...I might have to call them.

 

Gmac loans are front heavy ,you pay all the interest first for the term and then pay off principle.
There is no benift to paying them off early.
Next time you buy a car ask these questions and the guy signing you up will not even be able to answer them for you.

 

yea... not all loans are like this.... an open loan u can pay more if u want with no penalties. ( meaning u don't pay the interest on what ever u pay extra.... or pay off) most banks do this now... gmac and other brookers don't do this unless u ask for it in the deal.

 

First of all, your either leaving out or mistyped some important details, because $9k/13.7%/66months is only about $195month payments and a total cost of like $12860, so youre getting screwed HARD, to the tune of about $3-4k if your numbers are accurate


The payoff quote will always be higher than the principle balance due at the time of the quote, because you have to pay interest for at least that month basically.

Paying a loan down early will always save you money on interest. .(unless youre getting hammered by some kind of prepayment fines,or you didnt actually get a normal loan, you got somekind of other thing, forget what its called, but tool companies offer these, basically they provide a loan for the principle and the interest, and then thats the number you agree to repay, if you signed that for a car.....shame on you. even my crazy ass 21.25% loan doesnt have that, its just got a maximum I can pay per month. SO I can pay anywhere from my payment up to like $1200, if I wanna pay mare I have to call for authorization, or pay in full)

 

that interest rate is terrible. mine is less than half that.

 

I didn't add my extended warranty so that 9k should be about 13k. I was paying 280 a month. But when I bought it yesterday I was asking the finance guys, they said its because I didn't specifically send a seperate payment stating it was principal only. Since I dind't do that, they did it like next months payment. Thats why I didn't have one due for a year. If I did it that way, I would stillhave to pay next month, but the extra money I sent would be principal only. But you must specify it.

 

For example, my one line of credit from a tool company works like this. I tell them I want a new tire machine, they say okay the tire machine is $3500, and there is an additional 20% interest charge to purchase it on extended payment plan. SO they take $3500 add 20%, $700, and say that I know owe them $4200 for the machine and I have 60 months to pay it off. It doesnt matter how quickly I pay it off because I agreed to pay off $4200, so if I make 2 payment or 59 I still put out the same amount of money. I have NEVER heard of GMAC or any other auto loan working like this though, if yours does......you got screwed, you wont make that mistake again

Thats because my credit score is half what yours is...STFU

This is perfectly normal......you didnt mention that you did it that way....... If you send in multiple checks, they consider it multiple payments, if you specify its additional money, or in many cases just pay extra, then you wont have the issue you ran into. If I go online and make 5 payments it considers it 5 monthly payments at once and applies the money to the principal balancde and interest just as if I had made them all a month apart,, and it tells me I dont have a payemt due for 5 months, however, if I go on and make a payemt, but make it for 5 times what it should be, it takes the extra money, applies it all to the principal and I still need to make a payment next month.

This is where a lot of people go wrong.....If you want to pay extra because you have some right now, but may not again for a while....pay multiple payments, that way you dont have a payment due for several months and you dont get caught out by not having any cash. HOWEVER, if you want to save money on the interest you either need to make bigger single payments or specify your extra checks or for the principal, the problem with this is that if for some reason you have a bad month, you cant just skip a payment, they dont care that you pay extra every month, youve still got a payment due.

You paid $4k for a warranty? WTF, they saw you coming from a mile away

 

I did do it the latter way though. I made 1 payment of say 900 instead of 280. I never sent in multiples I just increased the amount I paid (I did it all online).

Yeah, I had the premium. I paid 3.5k for this extended warranty cause it was only 1 dollar more then the next one. I even looked

Car was 13k, 17k before interest then 21k after the interest. So subtraded the interest from 21k and differnce between the two was the warranty. Jumped my payments from 280 to 350.