Auto Loan.. Pay only the principal or principal+ interest?


Hi there, I recently got my first auto loan.  I noticed that USAA allows you to choose if you want to payoff only the principal or both the principal & interest accumulated up to that point.  I was wondering if it's more adviseable/economical to pay off only the principal first.  I glanced through some of documentation to see if the interest rate is applied only to the principal amount or if it's applied to the total amount owed (principal + interest)...but I didn't see that info off hand.


Anyone have a quick and easy answer?  Thank you in advance!


Hi 0Kat0!

I am not an expert in auto loans, however if you call one of our member services rep at 1-800-531-8733, they would be more thank happy to assist you with this. Thank you for posting in the member community!

During the life of your loan you have the option to make extra payments to principle only. This shortens the overall time you are paying on it and saves you on interest. You still make your regular payments (which include interest). Bottom line; make extra principle payments as often as you can and you will save money on interest and get the loan paid quicker.

What screen do I go to to make additional principal payments, and how do I get there?

I'd like to know that as well.

Here are the steps to make an additional payment:


1. My Tools > Select Pay Bills.
2. Click on the appropriate account.

3. Input the amount in the Payment box
4. Select the Principal Only Payment box

5. Select the Payment Account.

6. Click the Next button.

7. Verify the information then, click the Submit button.


I hope this helps! Thank you!

My question is more technical, but is related to this thread: 


I've noticed that my interest on my auto loan is building up slowly day by day and not once a month, the way my credit card does.  I also see the ability to pay principal only payments, but it says that it won't count towards the monthly minimum.  But I want a more detail explanation than that:



1. Is the loan compounding daily? (e.g. 10% APR/365)

2. If I divide the total monthly payment (in my case 135/mo) by 4.33 and make weekly payments of $32 (3 of those being principal only and the last one being a normal payment) will I suffer any penalties for that?

3. How can I calculate the difference that will make through the life of my loan? 

Thanks for taking my call today, brnflowers. Please don't hesitate to reach out if you have any other questions come up. - Cathleen

I want the answers that were given to BM flowers. I have those same questions but it was responded to privately so it doesn't help others...

Hi @Edburkett - I've sent a private message about your inquiry. To review your private messages, simply scroll to the bottom of the page, Click on USAA Community, and your private message should be there to view. - Cathleen