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I pay at least double on my auto loan. I always pay in person, but at 2 different branches; one by work, the other by my house, and each handles my loan differently. For example, my payment is $ 500 per month, so I pay $ 1000. At branch A, I receive 2 receipts for $ 500 each: one for the initial payment due, the other applied towards the principal. At branch B, I receive 1 receipt for $ 1000. When I ask branch A about it, they say branch B is doing it incorrectly, and I am getting screwed. When I ask branch B, they say branch A is wrong. Which is correct?
Also, if I am getting screwed by Branch B, is there anyway to go back and correct their mistake?

6 Thoughts on Question regarding double payments on auto loan, which is correct?
  1. Reply
    Cory
    February 7, 2014 at 9:24 am

    ALL YOU NEED IS LOVE

  2. Reply
    Meghan
    February 7, 2014 at 10:03 am

    If you are writing two seperate checks, you should recieve two reciepts. If it’s one check, or cash you shoudl recieve one reciept. Depending on the structure of the loan (I assume it’s a traditional auto loan), the $ 500 goes towards your payment, and the additional $ 500 goes towards principal. If it was a buy here, pay here lot, you may be obilgated to x number of payments of $ 500, regardless of when you make them. You need to review your contract and ask for the balance due on the loan next time you go in.

  3. Reply
    essjay29
    February 7, 2014 at 11:02 am

    Sounds like either way is ok to me, depends on the loan set up. Ask for a full statement and as long as all the payments you have made are there, you should have no problems.

  4. Reply
    DAS
    February 7, 2014 at 11:56 am

    Same bank, different branch? Hmm!!! You need to talk to the branch manager, because for some reason, they don’t agree. I suppose, someone misunderstood your intention on how you wanted to pay your car note.

    1. Two car notes could be $ 500.00, and $ 500.00, for a
    total of $ 1,000.00, with a receipt say either (2) $ 500.00
    payments or (1) $ 1,000.00 payment.
    or
    2. The other a payment of $ 1,000.00 for the (2) notes.

    I am sure that by paying the (1) payment of $ 500.00 for car
    payment and paying the (2) payment ofi $ 500.00 for principal, you are paying the car off faster.

    And technically the both could be right, it’s just important that you clarify each way you want it done. Make sure you tell them how you want it, and then clarify. Don’t let it go to chance. They have to listen to you. They may not chance the previous problems, but you can make sure you .

  5. Reply
    rowlfe
    February 7, 2014 at 12:34 pm

    Read the loan terms again and determine what kind of loan you o have. There are two kinds commonly in use. The 1st is like a home mortgage. When you make a payment on a schedule, part is applied to interest and the rest against the principle, the remaining balance due. With a mortgage, you can pay the remaining balance at any time without having to pay any penalties or fees (there MAY be a service charge to pay off the loan in full early, but this is just a processing charge.). With this kind of loan, you can apply additional money against the outstanding balance. This means that over the life of the loan, you will be paying it off early, and more importantly pay LESS in interest as interest is charged on the remaining balance, and the lower this balance, the less interest. The second type of loan is a fixed payment loan, X payments of Y dollars each. Paying ahead does NOT mean you pay any less than the scheduled total payment amount (X times Y dollars), you just make payments in advance so the loan is paid in full sooner. From what you say about branch A, it seems you have the mortgage type of loan and branch B is not crediting your account correctly. You need to contact the actual lender to determine what to do about branch B. Branch B may actually BE crediting the excess against the principle even though they do not say this exactly. You can tell from the statements you should be receiving from the lender. At least once during the year, you should receive a full account statement showing each and every transaction, with complete dates and amounts. You may not be able to do anything retroactively to fix mistakes made by branch B, but you can certainly avoid mistakes in the future. Go with the one that credits excess toward principle as that means less total interest paid.

  6. Reply
    stan c
    February 7, 2014 at 1:05 pm

    If you have a simple interest loan, anything above the normal payment should go towards the principle. However, if A applies towards the principle and B makes it a double payment, basically it turns out the same way at the end.

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