[illmatic37]

I always pay more than the monthly amount but the extra I pay doesn't get applied towards the principal. it sits a credit towards the next months payment.
Just recently noticed it as I had auto payments set up. Does anyone know if there's some special procedure that needs to be done so the over payment gets applied to the principal?

[leftoverture]

It is getting applied to your principal. The bank makes more money if you go full term on your loan, so they show credit toward future payments in the hopes you'll take advantage of that. Just keep paying the amount you want to pay each month and ignore what they are putting on your statement. By the way...I avoid automatic payments for this very reason. I like to be in control.

[morphomeman]

In many cases, you get a lower rate with auto payments on all sorts of things: loans, insurance, credit cards. The difference may be small but it adds up over the long term. Auto payment also ensures that you will not forget and miss a payment, which may incur a penalty as well as affecting your credit scores. Also, you are usually free to make additional payments towards the principal.
Overall, there is not much of a downside to autopayment and lots of advantages.

[Ajowhan]

Originally Posted by illmatic37

I always pay more than the monthly amount but the extra I pay doesn't get applied towards the principal. it sits a credit towards the next months payment.
Just recently noticed it as I had auto payments set up. Does anyone know if there's some special procedure that needs to be done so the over payment gets applied to the principal?

If you go to the payment detail page, bottom most there is a summary of how much of your payment goes to principal and how much of it goes to interest.

The extra does goes towards your principal and you do NOT need to do any extra special procedure.

[Mason Hatcher]

Originally Posted by Ajowhan

The extra does goes towards your principal and you do need to do any extra special procedure.

I am interested in doing this. Do you mean that you do NOT need to do any extra special procedure?

[Ajowhan]

Originally Posted by Mason Hatcher

I am interested in doing this. Do you mean that you do NOT need to do any extra special procedure?

My bad, yes I mean you do NOT need to do anything else other than submitting payment

[Mason Hatcher]

Originally Posted by Ajowhan

My bad, yes I mean you do NOT need to do anything else other than submitting payment

Got it, thanks

[leftoverture]

Originally Posted by morphomeman

In many cases, you get a lower rate with auto payments on all sorts of things: loans, insurance, credit cards. The difference may be small but it adds up over the long term. Auto payment also ensures that you will not forget and miss a payment, which may incur a penalty as well as affecting your credit scores. Also, you are usually free to make additional payments towards the principal.
Overall, there is not much of a downside to autopayment and lots of advantages.

A lot of people feel like you do but auto payments are not for me. I'll pay the extra quarter point to keep control. And I never forget a payment.