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Payoff date vs. maturity date


jkitty
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The last post in this topic was posted 3432 days ago. 

 

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This is about my auto loan. My payoff date is April 4, 2013. My maturity date is June 20, 2015. I still owe $11,500 on my auto loan. What does this mean? Am I going to lose my car? I pay $435 a month. I want to continue making a monthly payment until it's paid off. Will this be possible? Help! I am fearful.

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A payoff date refers to the amount you must pay by x date to pay the loan in full. Interest accrues each day during the month, and is paid when you make your payment. In the time between payments, if you decide to pay off the loan in full, you have to pay the interest that has accrued between the last payment and the date your loan is to be paid in full. Usually your payoff amount is the amount you will owe 10 days from today's date, which allows mailing/processing time. The maturity date is the date at which you will pay off the loan if you continue to make regular payments.

 

You aren't going to lose your car. This is standard financing lingo.

Edited by CTSoxFan
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The payoff date you are seeing is an amount you *can* pay to the lender BEFORE that date to pay the car in full. If you were to call in and say to them, "I just won the lottery, what is my payoff?" They would tell you $11,500 IF you pay before April 4, 2013. If you pay after that date it will be a bit more (interest accrual). No biggie.

 

CapOne Auto explained to me that some people who defer payments regularly can reach maturity date prior to the loan being paid off, because they aren't making those regular payments, they are skipping them. For example, over a 5 year loan, you could defer a payment per year. That means at the loan maturity date, you still have five payments due, plus interest. In that case they would require the remainder of the loan be paid in full, which would be all five payments at once! I'm sure they work with people but I guess with a bad account history it could cause problems. You're fine though.

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The last post in this topic was posted 3432 days ago. 

 

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