Chase Auto Finance Principle paid on car loan not same every month Fort Worth Texas

Why is it their fault that you obtained a loan from Chase Finance to buy a car? I don't know what you're talking about when you said the principal is different each month. Are you sure you're not talking about the principal AND interest. The principal is not going to go up in a car loan, if you pay it off. If you lame your payments the principal will decrease over time. Taking a loan and dividing by the months is not an accurate way of determining the principal, because the principal will decrease, as I said and NOT be the same each month.

1st month:

If for example you have a 20,000 and a 20% APR for 5 years. Assume your payment is $500 a month. When you make your first payment (say one month has elapsed) interest of 333 will be tacked on to the balance ((20%/ 12 months) X $20,000) and your payment of $500 will reduce the principal to $19,834 ($20,000+$333-$500).

2nd month:

Next payment will tack on $331 interest (((20%/12) x $19,834) leaving you a balance of $19,665 ($19,834+$331-$500). Notice your principal reduced $2 9examine th different interest calculations) additional from the first month because the interest was based on a reduced principal after making your payment. The $2 isn't much but that amount will increase each month as you further make your payments.

So that is why your principal is not the same each month, but it is decreasing. Dividing it evenly doesn't produce the correct answer because that is just not how interest is calculated by anyone in the world.

Most car loans today are simple interest loans. You can go online and look up what they mean. They are not the regular loans you are used to.

Here is what happens. Say you make your 1st payment this month on the 20th.

You make your second payment on the 20th. Roughly 30 days of interest comes out of your payment (20th thru the 20th) and the balance goes towards principal.

You make your third payment on the 30th of the following month. Roughly 40 days of interest gets taken out of your payment (20th thru the 30th) and the balance goes towards principal.

You make your fourth payment on the 15th. Now only around 15 days of interest gets taken from your payment (30th thru the 15th) and the rest goes towards principal.

It all depends on when you made your last payment as to how much goes towards interest and how much goes towards principal this month. If you make your payments too late, no money will go towards principal and it will all go towards interest. This is how people end up still owing at the end of their term.

Example: Say your payment is $500 per month and $400 is supposed to go to interest this month (on a regular amortization calculator) and $100 to principal. On a 30 day month, that $400 equates to $13.33 interest per day. Say you make your next payment in 40 days (10 days late). Out of your $500 payment, $533.20 goes to interest (40 days times $13.33 per day). Therefore none will go to principal and $33.20 will still be owed from the previous month to be pulled from your next month's payment.

The only way it really stays consistent is if you make every payment on the exact due date each month.

I would like to know who forced you to sign this horrible loan that you happened to agree to? Chase did you a favor by financing a vehicle for you when no other lender wanted to and where are the thanks for that? The terms of your loan were all layed out for you in the beginning and your interest rate and payment amount was all disclosed. YOU were the one who signed and agreed to all of this so this isn't Chase's fault either. Yes, Chase finances sub-prime loans and as you said that means customers who have bad credit. Bad credit leads to higher interest rates and that's not Chase's fault. Also just to explain how ALL auto loans work in the US...auto loans are daily simple interest loans. This means everyday you're late you're charged an additional amount of interest above the already set interest rate of your loan. Once you make a payment all that interest is going to get paid first and whatever is left will go to your principle balance. You may not make your payments at the same time every month so therefore the daily interest amount can change each month. This will ultimately affect how much of your monthly payment goes to principle each month which is what you're complaining about. You can prevent all of this and simply put make all your payments on time. What it really gets down to is that you know you have bad credit because previous/current creditors weren't paid on time so now you're pating the price for those mistakes. Until a good credit history is re-established you're going to keep paying more on every type of loan because you're a high credit risk. Of course Chase is a business and we're going to make money off our customers. Obviously the bad credit customers with higher interest rates and/or don't pay on time will make us the most money. I wouldn't blame lending companies for this because it's all your fault in the end. If you can get a better deal somwhere else then by all means go elsewhere and stop complaining.

While it does seem that paying off a high-interest loan is impossible, it CAN be done--it just takes perserverance and plenty of sacrifice. You've made some mistakes and now you are having to literally pay for them. However, if you make your payments on time and tack-on a few extra dollars if and when you can, you'll see your credit score start to increase bit by bit and you may even be able to refinance at a lower rate. Once you're finally out of that hole, trust me--you'll never let yourself get stuck in it again, especially when you have personally experienced the theiving practices of unethical lenders with whom you have to work because there are no other options! It's very empowering, but it takes awhile.

"Employee-of-Chase": Wouldn't it be nice to live in your world, where your biggest concern is making sure you don't forget to kick the homeless guy on your way to Corporateland. Have you seen the news recently?? Having a low credit score does NOT make someone a bad person, or even unique for that matter--the recent unfair business practices that have forced hundreds-of-thousands of homeowners into foreclosure, caused millions of Americans to file for bankruptcy (including large corporations), and many more to lose their jobs/pensions/retirement funds--have ramifications that those at the top are just getting a glimpse of. The only difference is that the average Joe does not have the option of a bailout, and often has to decide between groceries or heat. I'm not saying that it's okay not to pay your bills, or not to educate yourself on how credit works, but looking down your nose at someone who you deem as "less than" is not only a short-sighted waste of time but counter-productive, especially as you are in a unique position to be able to offer some valuable advice without the haughty attitude. I hope your fab company doesn't decide to downsize, 'cause I'm guessing it's gonna smart when you fall off that high horse of yours!