Interest 1st car loan?!

[UberSteroids]

Alright, here is the story...

I had a messed up credit while back, then I had a chance to buy a decent car at higher interest rate to fix it up a bit to show that I am reliable on making payments.

So, I left 12,700 bucks to pay off. I got a loan through a different financial company, not the dealership.

I got my statement for 1st year - 2008.

My original pay off was 12,700 bucks, after a whole year of making payments of 345.00 a month my pay off is STILL 11,900 !!!!

After calculating and reviewing the statement it shows that out of 4200 (rounded) dollars I paid the whole year only 800 dollars went towards the principal !!! What the **** is this? An interest 1st loan? This is ****ing ridiculous... It seems that after this year 2009, the loan pay off will be probably still 10,900 and no interest anymore, since all of it will be paid first...

I don't even know what to do anymore... Drop off the ****ing car and the keys in front of their office and let them take it and mess up my credit even more... at lest it will only cost me 4200 bucks and that's it....

Mother****** banks....

Please give me some advice...

[RuhlFreak55]

i don't know what to do...that sucks....gotta look at that shit BEFORE you sign man

there may be a way out of it but i'm not an expert in all that as i've never even had a loan on anything yet.

[D7M]

dude, that's typical of how car (and most loans work), the majority of your first payments go toward the interest, not the principle. That's common. I payed off my car quicker by sending a separate check every month, even for like $50, and have them apply that to the principle.

But, no, that's the way it works.

[warchild]

you could have borrowed money from the mafia at a cheaper rate then that bro

[JDawg1536]

http://www.bankrate.com/brm/popcalc2.asp

You have a 20-25% interest rate, that's why. Try and refinance. Making bimonthly payments helps a little tool.

[quarry206]

what type of loan do you have? and yes there are different types. it should say on the statement..

what is interest rate? how long is the loan for? and are you sure they didn't front load fees.. when i bought my firebird a few years ago, my first three payments went to gap insurance and other crap they slipped into my contracted that i was to stupid to notice.

[DSM4Life]

Credit union, got my car loan at 4.9%.

[JDawg1536]

Credit union, got my car loan at 4.9%.

When did you get it?

[DSM4Life]

When did you get it?

Last year.

[JiGGaMaN]

stupid people = bad credit = easy to rip off. do some homework before you give away your bank account.

[Brown Ninja]

^^^Ouch. True but harsh. As bad a rep as most dealerships have it still amazes that most people go into it so blind. Suck it up and keep paying because the moment you drop that car back off at the lot you officially will not be able to buy another car for quite some time. Its not worth destroying your credit unless you absolutely cannot afford the payments.

[Brown Ninja]

Like someone else mentioned, go refinance that bad boy. I am assuming the cars value has decreased dramatically but there are a lot of lenders out there that will go over the actual value of the car.

[T_Own]

that happens... i think they can hold you to the loan at least in the amount of the interest so giving the car back doesn't do much.. they always put the payments towards interest first, because then if something happens, at least they made their money from you.

that is a really bad interest rate.. thats like buying a car on a bad credit card. but thats the price you pay for bad credit, and making it worse won't help at all. if you go to get a mortgage with bad credit you could be paying an outrageous amount on your house, and you see how bad it is on a small loan, just imagine a few extra points on 250-500k. you'd be looking at over a million extra just to pay it off.