 TITLE: Can You Pay More on Your Car Payment? CONTENT: How Paying Extra on Your Car Loan Payments Works\n------------------------------------------------\nBefore you schedule that extra payment on your car loan, you need to find out whether your lender applies the payments to your loan principal or to the interest.\nApplying extra payments directly to the principal (that is, the amount of money you borrowed) is ideal because it reduces both the amount you owe and your total interest. (The exception: If your loan has _precomputed interest_, meaning the total interest was calculated and fixed based on the term of your loan, you'll pay the same amount of interest no matter how quickly you pay off the loan.)\nHowever, many lenders don't apply your extra payment amount directly to the principal. Instead, they'll apply it first to the additional interest accrued since your last payment, and only then to the principal.\nWhat if you make a whole extra payment instead of just adding a little bit more to your monthly payment? Unfortunately, many auto lenders will treat this as an early payment of your next bill instead of applying it to the principal.\nIf you want to make sure the extra payment will be applied directly to your loan principal, find out exactly what your lender requires to do so. You may need to specify your wishes in writing, check a box online or even mail your extra principal payments to a different address. END