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By default, any additional payment over the amount due will be applied to you next payment. It will not save you any money in interst. You WILL pay of the loan earlier. This is great for the bank. They get all of the original interest on a shorter term note.
If you include a written note or (check a box on the coupon) specifying a principle payment, then you outstadning blance will be reduced by the entire amount. This usually reducing the term of the loan while keeping the payment the same. I would like to have the option to keep the term the same and a reduction in the payment. I have never seen this happen though.
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