My car Loan Company (HSBC Auto) is not adjusting my monthly payment accordingly. I recently made a payment(Principle only) to pay down my car and have a lower monthly premium. My loan maturity date is in May 2010. The principle amount is at $1512 and my rate is 7.9% and they say my monthly payment is $287.06? They said they calculate the monthly payment by P x R /365 days. That still doesn’t compute. I asked them to adjust my monthly payment according to my maturity date. The monthly amount I’m suppose to pay is $68.31.(used bankrate.com auto calculator)
They said that they “can’t” and “will not adjust” my monthly loan payment. At their monthly amount I’m going to pay this off early. I don’t want to do that. I’m tight on cash now and would like to pay accordingly.
Is it legal for them to make me pay off me loan early? What steps do you think i should take to get this corrected?
You signed a contract to pay X amount every month until the loan is paid off. When you make extra payments, it lowers the amount of principal owed, which shortens the life of the loan, but it has no effect on the amount of your future monthly payments. If you read the terms of your loan I’m quite certain it will say something along these lines and that any extra principal that you’ve paid will not be refunded.
Sorry, but it seems like you’re just going to have to live with getting your loan paid off early. I can think of worse things to suffer through.
Try to re-finance it
I agree with the first response–that your laon contract commits to a flagt monthly rate until all of the principal is paid off.
You do have the option to refinance the loan – this would allow you to borrow money to finish paying off the loan (from another company) and you would then pay interest to them instead.
Otherwise, you are legally obligated to continue the original monthly payments stipulated under the loan agreement.
With the small outstanding balance on your loan. Pay it off. If you have other credit cards, pay the minimum until you pay off the car, then pay more on the other cards. Keep all of your credit cards below 50%, with a minimum of $20 on all cards. This will boost your credit score and you will have a Paid auto, which will make your credit look better for the future. this should take approx. 5 months to accomplish.