American Credit Acceptance

[bravesfan]

Our loan was purchased from another Lender about 15-18 months ago. We have a high interest rate and we can't refinance b/c we owe more than the vehicle is worth or at least that has been what we were told when we considered doing that. 

 

My question is about the breakdown of payment. We can look at each payment we made and it tells us how much of the payment was applied to the principal amount and how much is applied to interest. I have often wondered why it is so different from month to month. Some months the majority will go toward the interest and some months more will go to the principal. Looking at it...there is no way to tell. I know with a high interest rate that a lot would go toward the interest first or that is my understanding...but being so significantly different from month to month is confusing to me. I figured I would see more of a flowing of gradually reducing and there is no way to tell from month to month.

 

Is it normal to have such an inconsistent applying of where each payment goes?

[gamecockcountry]

Even with high interest the general trend should be that a little more goes to principal each month.  Try putting your loan info into an amortization schedule.  That should give you a pretty good idea of what to expect each month.  Just google "auto loan amortization schedule" and you will get a few of them to try.

 

If your actual numbers are not similar to what the schedules give you then maybe there are some taxes or fees coming into play.

 

I just looked up American Credit Acceptance and it looks like they do simple interest (most car loans) and precomputed interest.  So you would need to see what kind of contract you have.

 

 

Edited May 27, 2020 by gamecockcountry

[centex]

Variances on most vehicle contracts will be driven by the date upon which the payment is made.  A payment made early in the month will often see more going towards principal (relatively speaking) than where it is paid in the later days of the billing month.  And, of course, any payments above the minimum contracted amount that you specifically earmark for principal SHOULD be reflected in the paydown...

 

If, for example, you pay one month a week after the statement closed but then wait the next month and don't pay until the end of the cycle, you could easily see the impact of the extra weeks that the interest clock was ticking. 

[MarvBear]

has the Original Poster tried using an amortization calculator?

[sflatford]

We bought a car at car max and American credit acceptance financed it, $634.24 a month 27.99% finance charge ! They say we fell behind 11 payments in August they stopped charging late fees we had surpassed are loan term and was making up referred payments  well next month is our last payment  ! Which means we have paid out $45357 in payments to car but they say there's a payoff of $13000 that's two more year of payments we've already done 6 years but never was told there was a huge payments at the end of loan

[MarvBear]

How many months was the original contract you signed?  Did you read it?  Did you fall behind 11 payments?