My husband bought a truck in '07 prior to us getting together seriously enough for me to have a say in finances. Took out a ridiculously long loan (IMO) with 5/3 bank.
Now, we had 14 months left on his loan at 552/mo. I know this based on the fact that he started the contract in 2/07 (based on the contract date in the payment book) and he financed it for 72 months. Calculate that out and it is $7728. Thought that the payoff (since it's early) might be a little less (not much at this point).
However, he calls the bank today and is told we owe 9000 on this loan. Never missed a payment (because he doesn't do that and I've been handling the bills since 08), never been late.
Huh? I've never heard of an auto loan in recent history that isn't a simple loan where if you payoff early, you SAVE on interest.
Can anyone out there help me figure out what's going on with this loan? Basically, does anyone have experience with this situation or does anyone work in the financial industry that could shed some light on this?
I can't get the contract until this weekend and he has never received any statements.
All I am asking about is how payoff amounts can be calculated and how we can owe nearly 1100 more than we figured.
Okay. Based on the information from the bank, he financed it for 75 months, not 72 (didn't realize you could even do that...). That would explain why I thought he first told me he financed it for 85 months (or what I thought was 7years with my quick, shoddy math).
Could be a balloon payment at the end...but it's been 3 1/2 years of making payments...my guess is late fees!
I don't think anyone can tell you what is going on because you haven't given us enough information. What do your statements say? When I had a car loan the statements showed how much went to interest and principal and what the principal balance is.
I know that Fifth Third Bank is a good bank but a large bank. They have no upside to screwing people so it is most likely a simple interest loan. I would suggest you look over your statements and figure it out. :)
Your husband had to receive statements whether by paper or electronically. If you haven't seen statements how do you even know he has never missed a payment. The other thing is if you are counting the payment coupons left to come up with fourteen payments left that isn't accurate either. What if he tore one off to mail it in and misplaced it and grabbed another?
ETA: NO, not the payment coupons. Ask the bank for a print out of the payment history - it will be a detailed report of how the payments were applied against the balance of the loan. They can also give you a copy of the contract.
Original post
You need to call the loan company/bank and ask them for a payment history, look at your contract and see what it says about pre-payment penalties and what the interest rate is.
Sorry your husband was in an accident. If someone was driving in REVERSE - then it sounds like it was THEIR fault - not your husband's.
Request a copy of the contract as well from the bank. In the future NEVER store a contract or title in the car. Keep your registration and insurance information but NEVER your contract or title.
GOOD LUCK!
You may be able to get an amortization of the entire loan online. Check 5/3's website. You should be able to register then log in and see every payment made, how the payment was applied, how much interest you've paid, and what your principal balance is.
Even if the truck is totaled, I'd still imagine the payout would be more than $9,000 which should cover the balance of the loan.
I worked for GMAC for 2 years in the auto payment section, and basically there are two types of loans available today. One is the standard "old fashioned. This one has a set amount to pay and you pay the interest first and principal later. The other kind is based on the daily balance. Whenever a payment is made, the interest that has accrued since the last payment is paid, and then the rest goes to principal. New interest starts accruing on the new lower balance. But, if you have been late the amount of the balance can go down less than you thought it would because of late fees and more accured interest than you planned on. My guess is that something like this has happened, but I can't tell you for sure without looking at the account. The bank should be able to explain it to YOU though, if your husband calls and give them permission to talk to you. They can also fax or mail the contract to you. Good luck!
All I know is when I bought a new car years ago, they said that the loan is structured so that I would pay off interest first, then principal. That way, if you pay off early, you don't really save anything on interest because it's already all been paid!
No one here can really tell you...there are so many types of loans out there that we cannot even begin to explain how the one you husband took out 4 years ago could work. You need to get a copy of the loan agreement and payment history to be able to get the info you need.
I don't see anything anymore on an accident if it is the case of an accident I hope he is ok. and sorry you have to go through this but the process for accidents can be slow...and if you are like me and want answers now it's not going to happen.
I'm an insurance agent in AZ. Next time you get a car loan, get "gap coverage" thru your insurance carrier NOT the loan company, especially if its brand new. It covers the difference of what its worth and what you owe. So in this case, insurance would cover the 9k. No one ever wants to pay for extra insurance but its the first thing they wish they had when there's an accident and gap is usually only a few dollars extra per month. As far as your contract goes, no one can really answer that since its in the paperwork and you would need to review that for details. Good luck!!!!
Im not surprised. Many banks will charge you more than 15% of interest rate whenever your credit is not close to be perfect,which means that you will be paying mostly interest payments the first 3 or 4 years. According to the information given, the other $1300 are interest rate charged to the amount. Some kind of loans will include the interest rate even when you pay early the total.Also, some banks will charge a penalty for early payoff.
Im sure everything is in the 100000 words contract with tiny letters. Go to your bank and try to negotiate the loan. Hopefully they take the $7728 and let you save the other 1200 of interest rate.
All tha is hapenning to you happened to me when I bought my first car.
Good Luck.
E.
It sounds like you missed 2 payments somewhere (550 payment times 2 months).
For all of those questions you need to refer to the original loan papers.
