How do I know if my extra money is going toward principal?

Question

I bought an 07 corolla in January 08' used. I always hear people talking about refinancing and paying more on monthly notes (to pay it off quicker) but also about principal and interest. If I were to pay more, how do I know it's going to the principal and not interest? What about refinancing, when should I do that...should I do it at all? I have asked some friends for advice...I am trying to get as much info as possible...so I can make the right move!! Thanks so much for your time and info.

Answer 1

YOU CAN CALL whoever is financing your car and request that any extra money sent with your payment be put towards your principal balance and not credited to your next statement balance.

you can also send the principal payment seperately to your finance company via your statement stub letting them know it's a principal payment.best thing to do is call them and ask how to send a principal payment.

Answer 2

Look at your coupon or monthly statement, there should be a space to entire the extra amount toward principle.  If not just send in the money and yes it goes toward principle, that is the law.   Why refinance?  Just pay the car off as soon as possible.  You will save a small fortune in interest.