Hi,

Have a few questions about financing through IFS. I could not find on the official IFS FAQ if there are any prepayment penalties. For example min. payment is 600 a month on your G and you pay 1,000 or more in any given month. Can you do this online? Are there penalties? I also read something about the last payment having to be by check and not online so you can get your title, anyone completed their payments and know what to do?

Thanks

 

Yes you can pay online and I've never heard anything about anyone being charged penalties for overpaying.

 

You can pay as much as you want... No penalties..

It will just push your monthly payment due date back, or reduce what you are scheduled to pay the next month.

 

Unlike a house, which is covered by law, paying extra on a car doesn't actually save you any interest. They either apply it to the next payment, or apply it to the last payment. No interest saved at all.

 

You have it backward

Usually, cars (purchased) are calculated via simple interest, and you only pay for the amount borrowed, while homes have prepayment penalties unless you had the penalties taken out by paying points and/or taking a higher interest rate.

On a Lease, you have nothing to gain by paying extra or ahead of time, other than pushing back your payment.

Yes, I used to sell cars, and I am now actively engaged in the real estate market.

 

So if I pay double to minimum car loan payment through IFS online payments the extra money is going towards the principal right?

I have heard sometimes the extra payments do not go towards the principal but just pays for the month ahead, which is not what I want (whole point is to save money on interest by paying off earlier)

 

Usually you have the option to choose....

 

Paying extra on a house does not cause a pre-payment penalty. If you pay it off, or re-finance, then you may have a prepayment penalty. On cars, they can do whatever they want with your payment. I found to my dismay my extra payments (on a ford) went to the last payment due (at the end of the finance period). So even though they had the money for years, no extra interest was saved. I have seen Capitol one just apply extra money to next months payment. I have no idea how IFS does it, but it is not covered by law like a home mortgage is. So paying extra does not necessarily save you interest charges. Call the loan provider and ask them.

 

I called and talked with somebody from IFS and this is what they told me. If you pay your car payment in doubles, triples, ect, it goes towards the payment. Example, if your payment is $600 and you send $1800, you just jumped ahead two payments. But, if you send, lets say, $1,100, you make one payment and rest goes towards principal. That's what a loan representative told me before I made 5 payments as my first payment so I would be ahead for awhile.

 

i double paid on accident after switching banks and i'm ahead for 2 months now. it differs from leasing vs financing so the best thign is just to call the bank you're financing through

 

California, being the liberal state that it is, forces all car loans to be simple interest.

Thus, it both pushes your payment back AND reduces principal. If you paid a double payment every other month, you would never be late, and save some $$$ on interest, since you pay interest on the amount borrowed.