FlameRedJK

In January, I made 3 Jeep payments, so I was good until April 23. Two weeks ago, I made my scheduled payment. I had noticed that the balance did not go down, at all, just stayed the same. I figured this was a computer glitch, so 20 minutes ago I called Capitol One and asked why this is.
I was told that because I made my payment in advance, I was charged more interest? So this month, when my payment was due, all $320.24 went straight to interest.
I asked how this could be...The weasel on the other line try to sell me on how this works in my advantage?? I called bullshit.
I asled "had I just payed month to month, would my balance had gone down this month?"
He replies with, "Yes, It would have gone down $220 something dollars"
I stopped him there.

Basically, they charged me more money in interest because I payed in advance??

Capitol One (and any finance company for that matter) are a bunch of scheming dirt balls.

I'm pissed...More motivation to pay it off early!!

Red Wings

It probably does make sense. I am guessing that all of the extra 2 payments went to principle and that probably knocked your amount owed down a substantial amount. Now you have had 2 months without anything being applied to the account so you are paying all of that extra interest. I could be wrong, but it does add up to me.

arjeeper

This is what I'd speculate too. Typically, financiers will only allow you to pay a month or two in advance before they apply payments to the principle (which is good, if your intent is to pay it off earlier)

skillet

Makes perfect sense. You are charged interest on the unpayed balance. Since you didn't make a payment for three months, the interest continued to add up. If you made the larger payment and then continued to make regular payments monthly you would end up paying less in interest in the end but you decided to not continue regular payments. What you did is basicly the same as paying 4 years, 11 months all at once and then waiting until the last payment is due 5 years later. The interest continues to compound.
If you pay the loan off early then you will end up paying less interest.

loader963

I don't think it does red wings. I pay 50 extra a month on my house payments and it goes straight to the principal and monthly interest doesn't change except what it should according to my amortization schedule. Maybe you should call again and see what answer the next guy gives you

Earth Siege

On my payment stub i can choose whether i want the excess of the min payment to go to next months payment or to principal by a check box.

My lender was chase usa.

I paid my jeep off this april 2 yrs in advance by choosing the principal box for excess.

Now that its paid off, time for front axle mods so i can roll bigger shoes!