Paying down principal with PenFed/BMWFS

[jmalchow]

Just a question for those who have financed with BMWFS or with PenFed:

Do these banks allow one to make extra payments at any time of one's choosing, paying off principal and therefore reducing monthly payments henceforth? Is this negotiable?

[0002s]

You can pay more at any time. It will reduce the total of the amount financed by the increased amount. It will reduce the length of time to pay off the amount financed. It WILL NOT reduce your minimum monthly payments.

This type of loan is NOT negotiable as to what you are looking for. (lowering monthly payment over time)

[HardTech]

Temp change of monthly payment sure.

My first bill of $380 came in a few months ago. Well I paid $410 as im hoping to pay the car off early. Well next months bill came in and it said I could pay $360...

Now I bet if I had paid the $360 my next bill would have been $380 to keep it on track. So over pay one month, your next month can be cheaper. But as for the life of the loan, not sure.

This would be with BMW FS

[ReaperJG]

some banks require you to tell them that your extra payment goes to principal...and if you don't, you just prepay for your next payment.

So if (using HardTech's example) your regular statement is $380 and you pay $760 and you didn't specifiy the extra $380 goes towards principal, then the next months statement will be $0, but the following month will be back to $380.

Alternatively, if you tell the bank that the extra $$ goes towards principal, then the next statement will not be reduced at all.

[mistermojorizin]

Originally Posted by jmalchow

Just a question for those who have financed with BMWFS or with PenFed:

Do these banks allow one to make extra payments at any time of one's choosing, paying off principal and therefore reducing monthly payments henceforth? Is this negotiable?

i talked to PenFed. they allow prepayment at any time. you can do it over the internet. if the extra payment is made on the day your loan payment is due, it automatically counts towards principal. if not on the same day, then it is amortized between principal and interest.

[0002s]

Originally Posted by mistermojorizin

i talked to PenFed. they allow prepayment at any time. you can do it over the internet. if the extra payment is made on the day your loan payment is due, it automatically counts towards principal. if not on the same day, then it is amortized between principal and interest.

Cool....