I just did the math and realized exactly how badly screwed I am getting with the interest rate on my auto loan. I have been paying on it for a year and a half and without the interest rate, I’d already be halfway through paying it off. But today I looked it all over and was aghast to discover that the money has been going 1/4 to the car payment and 3/4 to the interest! I’m seriously getting ****ed over here. Is there any advice anyone has for me to refinance elsewhere at a lower interest rate? If I keep at it with this company and their highway robbery interest rate, it won’t be paid off for almost 10 years! Help?
Okay, Tushar asked that I give specifics:
The loan was for $12,762.31. My monthly payment is $331.25. As of 8/8/09, my payoff is $11,220.69. I have had this load for 17 months. The difference between 12,762.31 and 11,220.69 is 1541.62. However, $331.25 a month for 17 months = 5,631.25.
However, they say the only amount actually paid towards the loan is 1541.62. Which means that I have paid 4089.63 in interest! OUCH!
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Your question can be answered in better manner if you support your question with facts. Please quote figures like outstanding loan amount, Term of loan remaining, Actual loan taken, Period , Amount you are paying for the time being as EMI.
Auto finance is what I do for a living and sorry to say that’s the way car loans work. They are just like home loans for the first 1/2 to 3/4 of the loan term your paying mostly interest.
Most people are not in any kind of equity position on a 72-month loan until around the 60th payment.
In your case you are most likely so upside down that refinance is not a option,I would suggest trying your own local bank or credit union they will be your best options.
Good luck.
The monthly payment is merely the minimum allowed. You can pay more if you wish, and probably should. You do not have to take ten years to pay off the loan. You may pay off the loan sooner.