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LS1Hawk · 02-04-2011, 07:53 PM

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.

02-04-2011, 07:53 PM	#10
LS1Hawk Join Date: Apr 2005 Posts: 2,308 iTrader: (0)	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. __________________ John Last edited by LS1Hawk; 02-04-2011 at 08:04 PM.