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Hello everyone,

I decided to purchase my Saturn car and have made the first payment. I would like to make double payments on this and was wondering if it would be best to make: 2 separate payments a month (one payment every two weeks) or to make 1 (doubled) payment a month? They do not charge fees for multiple or early payments.

Thanks,
Cherry


Cherry;

It really depends on how your particular loan contract is written. I have one from Chrysler Financial where all additional paid on a single payment is principal reduction, and where interest is only paid on additional payments recieved in a month between the two payments. (ie. Interest is calculated on the outstanding balance from the date of the last payment to the date of the current payment.)

Grab a cup of coffee (you'll need it to stay awake) and try to read your loan contract. It should state in it how the loan payments are applied in each circumstance. If you can't find it, or it's unclear, give the customer service folks for your lender a call. They should be able to help you out. Assuming the car loan is not from the Bank of Satan, as Wildgirl would say. :-)

The one thing I'll mention is that if you go for the true prinicpal reduction, it doesn't advance the due date, so if you get in a cash flow bind, you can't let a month slip. If you do the two seperate payments, you get a little more flexibility. I'm actually making a car payment every two weeks right now, and will have the loan paid off way early. :-)

Hope this help;
RkeFool
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