Kubota Loan Early Pay Penalty?

MHarryE · Apr 27, 2017

I have paid off 3 Kubota loans using auto-pay. They all went by the book, proof of payoff shortly after last payment. Now I want to trade 1 year before the loan is paid off. I have 12 payments, per their documentation, but Kubota has given a number about $180 higher than the remaining 12bmayments total. Has anyone run into this ? Percentage wise its small because the loan is $90,000 and the amount owed is less than $20,000; my new loan will be $115,000. It just seems strange to be charged extra to pay off a zero percent loan early unless it involves extra bookwork; however, my dealer's business manager called Kubota and asked what it would cost for me to pay off my loan early and they came up with the $180 extra. Weird. I hope I get a couple jackets for my wife and me, sweatshirts, and caps to make up the difference.

Gator6x4 · Apr 28, 2017

MHarryE said:
I have paid off 3 Kubota loans using auto-pay. They all went by the book, proof of payoff shortly after last payment. Now I want to trade 1 year before the loan is paid off. I have 12 payments, per their documentation, but Kubota has given a number about $180 higher than the remaining 12bmayments total. Has anyone run into this ? Percentage wise its small because the loan is $90,000 and the amount owed is less than $20,000; my new loan will be $115,000. It just seems strange to be charged extra to pay off a zero percent loan early unless it involves extra bookwork; however, my dealer's business manager called Kubota and asked what it would cost for me to pay off my loan early and they came up with the $180 extra. Weird. I hope I get a couple jackets for my wife and me, sweatshirts, and caps to make up the difference.

Any roll over money from the old loan into the new loan in the financing on the new tractor.

JOHNTHOMAS · Apr 28, 2017

I've bought over 20 new Kubotas in the past 13 years and paid off most of them early since I trade them before they are paid off. As far as I know I've never paid any early payoff penalty. Call Kubota financing and ask them why.

oosik · Apr 28, 2017

When I financed my 2009 Kubota, thru Kubota financing, there was an early payoff penalty. But as I remember, it only applied if I paid off the loan within the first six months.

MHarryE · Apr 28, 2017

My new tractor is ready for shipment to the dealer but the dealer wants to find a way to fill the truck so he doesn't ship a part load. When it arrives and I take delivery, I will look further to see what happened. JohnThomas - I was hoping to hear from you because I figured if anybody had gone through the experience, you had. Both prior Kubota trades I have made were trading tractors that I had already paid off. I am now treading new ground. My intention had not to even think about trading prior to my M135GX being paid off but due to circumstances where my ex-partner got me really upset to where we dissolved our partnership, I am suddenly in need of a larger tractor. Ironically I am instead partnering with my nephew who doesn't have one closed cab (air conditioners shot, windows and doors missing), no air suspension seats, no power shift, and I am too old to put up with the "Old International" torture. He has one newer tractor, a Kubota Grand X, but that is his private toy. Instead it would be a 4386, a couple 2+2s, and a host of 2wd.

KTAC · Apr 28, 2017

I am the director for Kubota Credit Corporation and there is no penalty for early payoff. What probably made up the $180 difference was the refund for KTAC insurance (if you had the insurance included in your contract). The insurance refund is applied to your loan and is already deducted from the payoff quoted. However, the insurance premium isn't earned pro-rata (meaning over 60 equal payments on a 60 month term for example). The reason is the equipment loses value over the term of the contract so a little more of the insurance premium goes to the frontend which explains a small difference on the backend. If you add up your monthly payments remaining, you will assume your payoff is going to be slightly less than it actually is because the insurance refunded amount is not the same for every payment. Again, there is no penalty for paying off your loan early. Well, I've probably confused everyone enough for today!

Fallon · Apr 29, 2017

KTAC said:
I am the director for Kubota Credit Corporation and there is no penalty for early payoff. What probably made up the $180 difference was the refund for KTAC insurance (if you had the insurance included in your contract). The insurance refund is applied to your loan and is already deducted from the payoff quoted. However, the insurance premium isn't earned pro-rata (meaning over 60 equal payments on a 60 month term for example). The reason is the equipment loses value over the term of the contract so a little more of the insurance premium goes to the frontend which explains a small difference on the backend. If you add up your monthly payments remaining, you will assume your payoff is going to be slightly less than it actually is because the insurance refunded amount is not the same for every payment. Again, there is no penalty for paying off your loan early. Well, I've probably confused everyone enough for today!

There was a shifting target paying off my L3200 a bit early because KTAC insurance was involved. I think I got a small refund from KTAC for the discrepancy between payoff date & the end of the month when coverage would have ended. Not a big deal at all really, just something to be aware of.

ovrszd · Apr 29, 2017

KTAC said:
I am the director for Kubota Credit Corporation and there is no penalty for early payoff. What probably made up the $180 difference was the refund for KTAC insurance (if you had the insurance included in your contract). The insurance refund is applied to your loan and is already deducted from the payoff quoted. However, the insurance premium isn't earned pro-rata (meaning over 60 equal payments on a 60 month term for example). The reason is the equipment loses value over the term of the contract so a little more of the insurance premium goes to the frontend which explains a small difference on the backend. If you add up your monthly payments remaining, you will assume your payoff is going to be slightly less than it actually is because the insurance refunded amount is not the same for every payment. Again, there is no penalty for paying off your loan early. Well, I've probably confused everyone enough for today!

No confusion here. Thank you very much for posting in this thread. "From the Horse's Mouth" so to speak.

I recently paid off a Kubota loan early and I didn't have any sort of penalty. But I didn't have KTAC either.

Thanks again for posting!!!!