Tag Archive: prepayment

What Happens When you Make an Extra Payment on a Loan?

Man struggling with large Debt

It is really interesting to see the results of making an extra payment to a mortgage, auto loan or any other amortized loan.  I think there is some confusion as to  what exactly happens, mathematically, when you make the extra payment.  To understand what happens when you make an extra payment you first have to…

My Extra Payments towards my Auto Loan was not being applied to Principal!

2006_mitsubishi_galant_thumb.jpg

It was a cold winter day in 2006.  I was 6 months out of law school working at a firm where I usually stayed till about 7pm.  I walked to my trusty, lovable Nissan 240sx.  This car had so many miles the odometer literally stopped working (I am not kidding it was stuck on 160k). …