Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
Dear Driving for Dollars,
I have been paying extra money on my car loan every month in addition to my monthly payment as a way to pay down the principal and save money on interest. I’ve done this with my home mortgage and it has worked well. The only problem is I just discovered that my bank won’t do this for my car loan and is just applying the extra money to future payments. Should I try to refinance with another bank, or is this standard protocol for car loans?
— Matt
Dear Matt,
Many car loans have a prepayment clause that prevents customers from reducing the interest that is scheduled to be paid over the length of the loan at the terms in your contract.
Look through your car loan documents to see if there is such a clause. If there isn’t, you can request the bank take the additional amount you’ve paid and apply it to the principal. They may not be happy about it, but unless there is a prepayment clause, they are obligated to do this at your request.
If there is a prepayment clause, then take comfort in knowing that you are prepaid a bit on your car loan. This could afford you to take a break when other bills are higher, such as after the holidays. You may owe less on your car loan when you go to sell or trade your car for a newer model, essentially giving you a larger down payment on your next car.
Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.
Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.
Share