payments getting smaller?
 

i'm not sure why but my payments keep shrinking, first it was 292 a month, then 284. i just received this months and it is now 277, (i'm not complaining).

is this normal for loans? i've been paying more than necessary each month.

what are you talking about? A loan or a credit card?

im assuming since you pay more than you should per month its automatically calculating the remainder of your loan into steady payments. it will keep getting lower if you continue to do so.

fixed loans don't normally change required payment amounts even if you pay extra principal (mortgages, personal loans, car loans, etc). So I'm guessing this is a credit card or perhaps credit line, in which case required minimum payment should drop with reduced balance.

sorry its a personal loan, its what i used to get the car, the bank said that they dont give out 'car loans' anymore.

sounds technically more like a line of credit if the req pmt is dropping. if you are concerned I suggest calling the lending company.

you can still get car loans. but used car loans are often made only for cars bought from a dealer and not private parties.

i'm not really concerned at all, and i got it through Wachovia (Wells Fargo now)

i was just curious

I had that happen with a loan as well. I paid extra and the next month it showed less than the regular payment. I think it's the difference of the regular payment minus the extra you paid so what they show is what you owe to keep on schedule. They might also be recalculating and amortizing out to keep the remaining term the same but you won't pay as much interest because you're paying down the loan quicker.

hm that makes sense, hopefully i can pay it off around this time next year, a year and a half ahead of schedule and save me some coin on the interest.

A lot of times if you pay extra without indicating the extra amount as "additional principal," the bank will put your account in "paid ahead status." What that means is the additional amount you paid is used as a credit for your next month's bill. So you are not paying the loan off sooner, you are just making your next month's payment lower.

To keep the monthly payment exactly the same while paying off the loan sooner, you have to separately indicate the additional principal you are adding to the payment. So if your monthly payment is $300 and you write a check for $500, you have indicate on the payment ticket that $200 is for additional principal. You should call the lender though to make sure there are no pre-payment penalties.

hmm thats good to know, as for additional payment, can i verbally tell them that i want it applied to the prinicipal? because i'm looking at my bill now and there is a spot for 'Additional Amount' however nowhere does it have room to write where it will be applied

If you write what you are adding to the payment in that spot, it should then automatically be applied to your principal. Normally that's how it works. I have an auto loan with Bank of America and there is a separate box on the payment stub for "Additional Principal," which in your case I'm sure is the same as "Additional Amount." But I would strongly suggest calling them to double check.

ok thanks its due by next thursday so i'll def ask when i go in

The loan I had through Wachovia for my wife's Jeep was like that. The original amount was for $292.xx / month for 30 months, and we started by just paying an even $300 each month. We confirmed that any additional amount paid (unless you exactly doubled the amount) would be applied to the principle. Each month payment was recalculated to show a slightly lower monthly payment amount owed.

- Justin