TFS: Pre-Payments?

I’ve had my 2023 Tacoma for about a month now. I financed through Toyota Financial.

I received the first statement a week after I purchased it. Its due date was Feb 20th. I made a large payment.

I just received the second statement and its due date is Dec 20th. My first payment was 10 months worth. Does this mean I can skip the March 20th payment and not have any issues? Not that I am but am just wondering.

 

Nope, large payments / extra payments come off the back end of the financing (from what I recall my Toyota financial manager mentioning to me a couple of weeks ago)...TFS financing is of the open style, payment amount will not change, only length / amount owing will reduce...

 

Why didn’t you just put money down on the truck so that you financed less?

long story short not sure haha

 

I don't remember on TFS. I have had banks that work that way though.

I once financed a 11k trailer on a 10 year note. (RV notes are freaking weird). I took a very leisurely 18 months to zero it out, but I do remember my final two payments. Apparently my minimum payment would have been 15 dollars, due sometime before the next 8 years and two months.

 

When l paid my truck off early, ended up taking 2 or 3 extra months after of goofy little add-ons.

 

I put down 40K and only financed $9,550 (MSRP + $900 for PPF)

36 months @3.99%

I’m not a huge fan of car payments so I’m trying to pay it off by end of the year.

 

download the app and you can see a live version of your account.

But yes, if you pay early it knocks down/out upcoming payments.

 

Ohhh you did great! I thought you financed 40k and then put a large payment down after that. That’s awesome. I’m hoping to pay off my 2023 by the end of the year too!

 

Yes, you can skip, but I would continue to pay a few bucks every month.

 

log into your account and it will say how much you owe for the next month

 

When I log in, it says my next payment is in December 2023 lol

 

Consistent regular payments works best, even if you pay an increased amount.
While your statement may not show a payment due, the interest will still accrue.

 

Way to go. You will have to make next months payment, unless the statement says amount due is zero. The interest accrues daily. So like others have said it will come off the back end. So if you made 10 payments, your loan will be satisfied 10 months earlier.

 

You made a regular payment which in your case is just advanced monthly payments. You should have clicked the option to make a principle payment instead. I financed 2 vehicles last year and paid them both off within 2 months, and that was the key = principle payment option

 

Yep that is exactly true. Before I refinanced with my credit union 6 months in I was paying a little extra and they would lower my next payment by that amount. What you have to do is make a separate payment on the TFS website specified as principal only. I did this with money from selling my old Jeep. If you don't do the principal only payment thing they will just keep deducting the extra from the planned payments ahead. This benefits them because interest still accrues on a larger principal balance. It's them helping them make coin not paying off your debt faster.

 

This, exactly. On the TFS site if you want to throw money directly at the principal and not just make a bunch of monthly payments in advance, use the "make separate one-time principal only payment" option.

Don't be fooled, it's a misnomer too; you can make as many 'one-time principal only payments' as you like. Call TFS and/or read the fine print on the website to verify.

 

Update: Nevermind, I read the FAQ and understand now. I should have used that option so that it wouldn't push my future payment due date!


How is that any different then making one large payment? Either option, you'd still owe the finance charge since that was the agreement, right?

 

Can’t speak to TFS, but to echo what some
one else said; if the due date is dec, that’s when your next payment is due. Extra payments won’t affect the amount due though.
And as an another comment said, the interest will be accruing from the day you made your payment until you make another.
While you could wait until December, your “interest paid” on that payment would be much higher and very little if anything would go to principal.
But listening to strangers online from different states isn’t sound financial advice. Definitely get it straight from the horses mouth

 

Since its simple interest, interest only accrues on the outstanding principle balance. So as long as I keep making monthly payments, I'll be ok.

I just called and confirmed with TFS. Legally, like everyone mentioned, I pre-paid 10 months in advanced, but interest still accrues daily on the outstanding balance. As long as I keep making payments by the 20th of each month, I'll still be paying down the debt.

If I had selected "make principle only payment" my next due date wouldn't have been pushed.

 

I called TFS just now to confirm. Most of the response are correct. I'll keep making payments by the 20th of each month to knock this out. As long as I select"principle only payment", it won't push my "next payment" further out