Has anyone tried to pay off their Mahindra early?

[bhostasa]

My 2015 is financed through Agricredit. I was planning on sending two large payments to satisfy the loan in full.

I called them to get a pay off amount and when I tried to confirm with the guy that any extra money sent would be applied to the principal balance he told me that they apply all extra money to future payments.

What does that mean? He couldn't really explain it to me (at least, not in a way that I understood). Anybody understand this?

 

[Ductape]

I can only speculate, but it sounds like he was saying that paying it off early will get you no break in the interest on the loan. On some loans I've had, paying them off early means I didn't get charged the full interest on the loan, since the money was repaid earlier then the original term of the loan. It sounds like they are willing to accept the money and apply it to your remaining payments (total amount still owed), but that you'll be paying the full interest on the original term of the loan.

 

[Duffster]

Does your loan documents allow for prepayment?

 

[BobG_in_VA]

Does your loan documents allow for prepayment?

Of course it allows anyone to "prepay", but the issue here is if there is a penalty for early payment...ie. do you still owe all the interest for the full term of the loan...if that's the case (but it should not be...) do not pay it off early, put the "excess" money into an interest bearing account and wait them out. Your paperwork should spell it out. BobG in VA

 

[johnsonauto]

It is my understanding at least in my state, that if you pay it off early you are entitled to a refund of the outsatnding interest. so your payoff should be the the entire amount of the loan and you will get some form of a refund.
As far as if you pay a large some it is applied to future due. meaning if your payments are 300/mth and you send check for 3,000.00 you have no payments due for 10 months.
I have a customer who does snow removal and he sends a check once a year when he gets payment for his yearly snow removal contracts by pays nothing the rest of the year.
hope this helps, this has been my experience with agricredit and Mahindra's we have sold, like I said may vary state to state.

 

[Duffster]

Of course it allows anyone to "prepay", but the issue here is if there is a penalty for early payment...ie. do you still owe all the interest for the full term of the loan...if that's the case (but it should not be...) do not pay it off early, put the "excess" money into an interest bearing account and wait them out. Your paperwork should spell it out. BobG in VA

I guess that is what I meant.

 

[George2615]

My tractor (2615) and a friends (2615) are both financed through AgriCredit. Mine will be paid off in August. I made no bulk sum payments but my friend has done this. Any bulk payments he made went towards future monthly payments like was said before. He doubled up on payments for 6 months. They send him a letter saying no further payment was due for the next 6 months. I haven't read the fine print about prepaying but some loan companies don't want you to prepay so they make the full amount of interest on the loan.

 

[bhostasa]

My tractor (2615) and a friends (2615) are both financed through AgriCredit. Mine will be paid off in August. I made no bulk sum payments but my friend has done this. Any bulk payments he made went towards future monthly payments like was said before. He doubled up on payments for 6 months. They send him a letter saying no further payment was due for the next 6 months. I haven't read the fine print about prepaying but some loan companies don't want you to prepay so they make the full amount of interest on the loan.

So there was no real savings in interest repaid for your friend, correct? If that's the case than I'll definitely take BobG_in_VA's advice.

 

[BigE_]

When you send in the extra payment, you need to specify that it is against the principal, and not against a future payment.

See http://www.agricredit-dll.com/US/AgriculturalEquipment/Customers/RetailFinancing.aspx

"Term debt instruments can be structured without a prepayment penalty to retire early without restriction."

You need to give them another call.... Find out if you have a prepayment clause. Or take another look at that pile of paperwork you signed (without reading? - ouch!).

 

[DonWorrell]

My 3325 will be paid off in July 2009. I had a 36 month contract. Back in April i called to see what my payoff would be. I received the following email from Agricredit.

Equipment: Mahindra 3325 tractor S/N EMANXXXX

Dear Customer:

The last receipt on the account was for $243.65, deposited on 04/02/2009. If you desire to pay the agreement in full before 05/05/2009, the amount due is $730.94.

Please do not hesitate to call us if you have any questions.

Very truly yours,

Agricredit Acceptance LLC


So from the above email you can see my tractor could be paid off early.

Don