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!
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!
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?
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