Should I pay Extra into my car loan - Will I be penalised?

in this video I look at my experience of paying more in into my car loan and what effect it has on how much I pay

[@Qlekani]

I put more into my car loan installment and I saved up 12 month's worth of installments, October will be last installment date :-) now I have to be more aggressive on my investments with the same amount I would've paid towards my car installment.

[@abigailvilane]

How much more were you paying

[@Michael_Mocks]

This is great, but what if you get involved in an accident and the car becomes a write off?

[@Qlekani]

@@Michael_Mocks That's what insurance is for buddy.

[@Qlekani]

@@abigailvilane what I decided to do was put some of my investments on hold and I was adding R4000 more on top of the normal installment. Now once the car is out of the way I'll resume my contribution plus the amount that was going towards the car.

[@leratotabane5841]

👌

[@whitneynovela406]

I did this. I was on a variable interest rate. Each time the interest decreased, my premium decreased so I would ask them to keep it to what it originally was. I also made extra payments towards my balloon payment. I'm happy to say that at the end of this month, I will officially own my car.

[@chumamakopi4903]

Hi, I am on variable interest rate and my instalment has been increasing and I do not see it any time during the finance period. Can I switch to fixed?

[@akhonakhumalo7843]

You're doing the lord's work Nicolette. This is the type of content we NEED!

[@yolandebarendse5322]

I agree she's a blessing to us, I like the very last part where she just relax and chat as if we were literally with her in the same room, she knows how to draw her audience love you nicksterrrrrr

[@Mazz6299]

She's been a blessing stru.

[@khathulation]

@Yolande, I felt like I was in the room

[@sinothi]

We need motion graphics in this channel, so that people can be able to visualize everything that you are talking about. This is very informative.

[@enochhmokgosi2092]

So True...shes not just telling a story, even a picture a stationary car would help

[@SoloVentureExplorer]

agreed. I think i need to private message her and assist in that regard with graphics and video editing with her team. Plus im into accounting too.

[@thembijohansen557]

This is the information I've been longing to hear. This content is very informative, thank you👏🏾

[@thathokuhlelihle]

I love this advice, very informative. Nicolette just never dissapoints ❤

[@teem5945]

You deserve a like. Thanks for sharing your personal financial plans. It helps us to see if we made good financial decisions.

[@lethokuhlezondi3531]

Mind-blowing advice. This is exactly the information I need.

[@DJFINGERZSA]

Always love how excited you about money lol Thanks for the advice just got my self a new whip so might use this capital reduction

[@KatlegoM10]

This is so informative!! Really didn't understand this advance payment thing until now as well 🙈 Thank you for sharing this!

[@thusomahlatji6268]

Thank you so much .Great content as per usual 🙌🏾

[@tshego_ceodesk]

Thank you sooo much for the excellent advice!!! I was planning to do this at the end of the year!! This was timely information

[@anthonykasukuti4346]

You are saving lives with your knowledge, I am recommending your channel to everyone I know.

[@anelisiwemadikida4432]

Life saving, actually saved up some money for my first car I’m planning to purchase end September. Thank you for this

[@user-xx5hy7nj8o]

Firstly thank you for educating us about a balloon payment. When I first brought my car I refused a Baloon payment at all cost and my car was also an entry level hatch back brand new. Me refusing the balloon payment made my instalment slightly higher by R1500. But I could still afford it. I then called Wes bank told them I’d be paying an additional R500 on my car loan going forward. I did. It did wonders to my car term. As we speak il be paying off my car 2 years sooner than I was anticipating. Thanks to your videos!! If I hadn’t seen your video lord knows I’d be swimming in debt 🙏🏾

[@ZoeDlamini]

I am learning so much from you as a financial south african youtuber,thank you👌

[@abongwemasiza534]

Thank you so much❤ I'm actually planning to pay more on my car this coming year. This was very informative. Thank you

[@VisionMediaINC]

Danko for the informative video,the content genuinely brings value. Thank you very much ❤️❤️❤️

[@EazyRelaxationSoothe]

Something we overlook, but do it as if we know what we're doing-so insightful, thanks for sharing Financial Bunny💞😍😇🙏🏼

[@reabetsoelehumo7721]

Very informative 👏thank you cc . Please also consider a talk around ballon paymen/ residual value the advantage and disadvantages.

[@SpindarellaMotloung]

This is so insightful. Thank you ma’am

[@thandoo_GM]

Thank you for this🙏🏾 I was wondering why my payment period and amount wasn’t decreasing

[@sneqwabe9148]

Oh wow you literally just spoke to me, I have been making advance payments on my car loan with wesbank and its just sitting there and nothing is happening to the amount. Thanks so much for this.

[@zamokuhlethela8734]

i felt that " I love you " at the end... you really love us Nicolette😍😍😍

[@simbongilemflatelwa8895]

Anyway thank you so much for sharing this with us hey, and your honesty man wow it's very much appreciated, I am also financed by Wesbank so thank you so much for the insight sis❤️🙏

[@moshachalale229]

I absolutely love your videos... Thank you for your advice...

[@RooiDuiwel]

so glad my wife and i don't have car payments, decided 4 or 5 years ago no more car payments, saved up cash for each of our cars....we might not be able to buy newer cars, but it's a depreciating asset...i'd rather drive a MK1 golf than ever take out a car payment again, all our extra money will go into my bond and RA!

[@kgauheloletsholo5083]

nah, i dont know where id find this info without you❤

[@samusifunda863]

this is so informative. I was making advance payments into my car but I did not know that the bank should be instructed on what they need to do with the payments.

[@augustineskhosana8876]

I love the last part where you're reconsidering if it's a good idea or not, but stick to your initial idea. I loved that. I was having this conversation with my friend last weekend, we knew you could make upfront payments but, but to let the lender know about that plan was not in that conversation which I realize is a very important thing to do. Always speak to the people you do business with. Thanks a lot Nicolette.

[@percivalmvoco2569]

Thanks Nicollete for good information, you are just a candle in the dark ( load shedding 🤣🤣🤣).

[@queenmusapitso5406]

Thank you for this information. Very insightful

[@mphokie100]

Wow i didn't know. I plan on paying the settlement of my car in two months and I haven't notified the bank. 😭 Im calling my banker first thing tomorrow morning, thanks so much for this info 🙏

[@keabetswemoreosele2525]

I remember when you tweeted about this. I then called my lender and reduced my loan term by 3 months. It sounded better than them reducing my repayments by 80rand

[@chandrelamb7309]

Hi hun, very insightful as usual, please can you do a updated video on the best savings accounts inn SA ❤️

[@khensanisithole164]

Hakhensa sesi, always learning alot from you 🤝

[@nondumisomhlongo]

Thank you for this. I needed it.

[@nhlanhla_magz928]

I had 2500r in advance sitting there, this morning i called them n my installment reduced by 150r. Im saving about 7110r over the remaining term. Thank you mkhaya 🌹

[@englishbyayomajozi1735]

God bless the work of hands. Thank you.

[@Mbalings]

Thank you so much Sisi for this information.

[@Mazz6299]

I paid extra on my car. Started doing this on year two of having the loan. Car was paid up at the eand of year 3. You just have to call the bank and keep asking them to apply a capital reduction to reduce your paid up principal debt therefore reducing interest.

[@boitumelomojaki7449]

Extra on the monthly premiums? How much extra?

[@motheolebelo]

@Zizipho - how much extra roughly?

[@pabi889]

Agreed. You can save up if you want and pay a lump sum like10k. R10k reduced my term by 8 months, of cause it's determined by the amount you owe.

[@primrosebhengu7160]

Thank you do much sis for sharing your knowledge with us our financial lives are changing, much ❤️ ❤ sis

[@millionairestha1073]

Ohhh🤣🤣🤣 how much i love you 😂😂 Your free personality z dope 👌👌👌 It actually encouraged ne to be myself in front of the camera

[@praiseshaku878]

Needed this. Thank you

[@floridanainda8611]

Wow, thanks Nicolette. I didn’t know about that notice period.

[@AK-LU]

Where have you been all my life????? Thank you Nic

[@themaboes]

Very nice information Ms Bunny, I did use this advise from you, that termination I did suffer from it in 2018! 😅 because MFC and Nedbank are giving me R200 cashback I’m only re-capitalising it

[@nsamamulenga6011]

This was insightful 👌thank you

[@mikemokwena]

sjoee...im also thinking of paying my car off this year. i didnt know about the 3 months' notice thing and being penalised!!!! thank you for this

[@issankayi3515]

Absolutely informative. But shame at VW Tavcor they did warn me that if I want to reduce the car installments, I must not just nest the money into the bank's account by the way I'm actually financed by Wesbank as well, anyway they said don't just put it there nje the computers won't know what to do with it. But if you come to us, a financial advisor, we know how to process the money into the system so that you end up paying less on your installments.

[@phakamantshewula]

You are simple the best sis 🙌🙌

[@nomsa06]

Brilliant, necessary video. Thank you 🙏🏿 . On another note; I absolutely love your hair 😳. Where did you get it done and do you mind sharing the cost?

[@funaniramalamula1607]

Instead of reducing loan installment amount and then keep paying an extra amount, you can also instruct the bank to put the money towards reducing the loan term.

[@katlego35]

I'm confused. Can you please explain further? Assume I'm a 5 year old 😅.

[@funaniramalamula1607]

@@katlego35 Basically you have two options 1. To Instruct the bank to use the amount deposited to reduce your monthly installments (Which is the choice Nicolete picked) 2. To instruct the bank to use the amount deposited to reduce the loan term(number of years in your loan). Nicolete indicated that she can still afford to pay monthly installment so it would make more sense for her to continue with the same installments and choose option 2.

[@katlego35]

@@funaniramalamula1607 ohh, I get it now. Dankie 🙏🏾.

[@marcusmo4863]

@@funaniramalamula1607 Wow..thanks for the 2 explanations

[@motheolebelo]

@@funaniramalamula1607 well explained. Thanks

[@harrisngwenya4120]

I'm looking at buying my first property and I was wondering how o could reduce my car payment's period so I don't have to pay a lot monthly, this is what I needed, ngiyabonga sis wam.

[@MsMaluleke2023]

Very informative. Thank you 😊

[@ziziphontozakhe4419]

What I did myself I increased the installatment for about 5k because I didn't have a lumpsum such as yours..I'm finishing mine next month, I'll save 16 months installment. 👍👍.. Thanks Bunny spot on

[@lorraineshai2995]

Girl, you smart ✌🏽

[@godfreymegapod3312]

I’ve been paying 4 times my normal instalment every month and never asked for a capital reduction, However on the statement, because the interest is calculated in advance, there was counter transaction (interest rebate) where they refunded the additional interest deducted due to hefty reduction in the capital amount on a monthly basis. 1 year 9 months later my car is paid off and minimal interest paid. I didn’t see the need for a capital reduction along the way cause I wasn’t so keen on a lower monthly instalment. Keep up the excellent work👌🏽🙏🏽

[@ZenzeleNawe]

Yall need to start telling us where you get this extra money😭😭 some of us just get frustrated by insurance increasing by a few hundreds😭😭

[@marthameso646]

@@ZenzeleNawe start with drawing up a budget, it will show you where all your money is going. You'll be surprised how much money you wasting 🤞stuuu!!!

[@ZenzeleNawe]

@@marthameso646 girl, I'm the queen of budgeting, I promise you I don't waste money, I think twice even buying something simple as hot wings

[@sibamboportraits]

She's smart, always empowering others, funny and beautiful.

[@motheolebelo]

Good informative upload and thank you for sharing. I am looking into doing this starting with the car then the house.

[@mokhuranegranny9568]

I'd start with the house if I were you

[@motheolebelo]

@@mokhuranegranny9568 mmh Elaborate please

[@mapasekamalesiwe5216]

Thank you so much for this ❤️❤️❤️

[@MsKay287]

Thanks Nicollet, I really needed this video coz im planning on paying more into my car installment.

[@kabelopaledi6989]

What happens if you get involved in an accident and insurance write it off,you lose mos?Is risky

[@MsKay287]

@@kabelopaledi6989 Yho now you scaring. I have 6months left but I also have a balloon payment. So what do you think is the best method for me to take? Put away the money I wanted to pay extra and pay it all off at the end or?

[@nomafrikatjatji6727]

Thank you for this!

[@angel0mzbk]

Thank you for sharing.

[@tinymoripa6848]

@financial Bunny. Can you please have a video on your take in regards to debt review ??

[@strawberrycheesecake7912]

I initially started by increasing my monthly installment.I called the vehicle finance people and let them know that i was paying extra to decrease the capital loan and not as an advanced payment. Everytime I did this they would let me know how many months I had left to pay off my car. Thats when i realised that even an extra r200 makes a difference. When i finally decided that I wanted to pay the car off in 2 years I started also putting in extra lump sums and saving money on the side when i could. Eventually after 2 years and some i was done paying it off. I have no regrets now I use the money that i used to pay for my installment as an investment into my EE Acount. Eventually i want to start saving money every month for my next car cause i want something a little bit more fancier.

[@mpitsengn6776]

Hi. Is it best to save up a lump sum of money and then pay it towards the car loan or paying extra every month also has the same effect?

[@motheolebelo]

@@mpitsengn6776 it seems even extra amounts helps. You just need to inform the finance house that those extra funds must go towards the capital loan if the car.

[@jasrid3220]

Thank you for this !

[@sarahratema4426]

Thank you for this information. I was making extra payments to my car and I always saw the "advanced amount" at the bottom of the statement and honestly I actually didn't know what it was doing or how it affected my loan. My car was in an accident and was deemed a write off and the insurance rejected my claim. I have been stressed to a point of falling into a depression. This has been so informative and will be calling Westbank to find out what my options are. Thank you so so much 🙏

[@AK-LU]

Which insurance were you with?

[@compton8301]

Don't give up. Contact the ombudsman.

[@Iyoh101]

Yeah it's annoying that you have to tell them each time to capitalise the amount. I had to send an email each month even thought I did a debit order into the account and told my banker it's to reduce the balance quicker.

[@nandipenxa3274]

You're doing God's work. Thanks for sharing.

[@cinthyl8936]

Hi Nicolette, that’s awesome. This is the information I needed, however, is there a way I can find out how these calculations are made?

[@jabulanisello3712]

Basically, the faster you take to repay back a loan, the less interest you pay... Thanks for making us aware of the 3-months notice.

[@akhonantusi284]

Informative video but my biggest fear is the car being written off before I pay it off, that will means the shortfall insurance house is a few thousands rich because there won’t be any shortfall (yes you’ll get change from your main insurance still) … Maybe save the money on the side and and watch out for your statements then settle the car once both are on par ?

[@redeemablesoul]

Thank you nicolete.

[@babalwamqikela8681]

Hi Nicolette Thanks for schooling us sis. Does the same thing applies in a personal loan? For the past 2yrs I have been paying an additional amount in my loan but my monthly installment is still the same and even in the balance I don't see much difference. I do the same for my credit card and I can immediately see the difference both in monthly installment ment and balance.

[@Bukeka33]

Thank you for the information

[@reginamaledimo8250]

A million thanks Nic

[@matsaumatau2124]

shuu! when she said "i just paid 265k" and "my instalment reduced by 6k"... bathong!!, chelete e kana... great lesson though!!

[@thatomojaje235]

I've always wanted this info yho, thanks Bunny Bunny.

[@thatomojaje235]

The subscribe button hit... Are open for follow up questions though?.

[@lulamilelukzsabuka8375]

Other people advise against paying off your car, mind maybe sharing your thoughts on the opportunity cost of paying off your car and how one can go about deciding which works best for them

[@janerose-jay2485]

Nobody! I mean nobody ever tells you these things. Enkosi Bawo ngalo sisi ❤️

[@anitatumeka1466]

Wow thanks Nic❤️

[@jusspmajola]

glad i found your videos

[@lesegoyv]

You are living large and we see your hard work paying off ma'am. I thought they add the extra amount to the loan and reduce it mara they will still expect you to call again and say so.

[@hlavutelochauke8341]

I love your hair 😍❤

[@thabangbaloyi3599]

Thank you Rakgadi

[@lydialekgothoane117]

Danko Nicolette❤️

[@blessingclaudio4777]

I did an experiment I put R200 by mistake after a while it was about R240 when I took it out. Witn vehicle finance your extra payments you make will get what you call an interest rebate! If your money sits they now owe you therefore they must pay you for the amount!

[@phelelanikhuluse8840]

finally i understand what capitalising is

[@tshwaragananglebeko6455]

You can also leave it as an advance and the money would incur the same interest as the one agreed on the contract causing something called an interest offset. From what I read and from the information I got from the finance company is that the interest saved whether the amount is capitalized or advanced the net saving on the interests is the same. Advance reduces the loan term whereas capitalizing reduces the monthly installments.

[@FinancialBunny]

My money never incurred no interest

[@tshwaragananglebeko6455]

@@FinancialBunny I am not sure why, but with me it does incur interest and I'm financed with Wesbank as well . It significantly lower than the one they charge for obvious reason of course. Its written as Rebate Interest that goes towards your debt. Check your statement.

[@maykay383]

I also get interest rebate on my extra payments

[@humanbeing1286]

great insight indeed

[@tiisetsomotosola2404]

Thank you very much, but then what happens to the balloon payment if I do decide to increase my monthly installment?

[@efraimmappzhafeni6455]

The second option is the best, always works for me, if you can get approval for a full capital on a vehicle without deposit, go for it even if you have a large deposit, then pay it after your first instalment

[@felicia_rm]

Yes, I've always been wondering if there would be a difference if I pay a deposit before or after my first few installments. My wish is to finish paying off the car quicker.

[@efraimmappzhafeni6455]

@@felicia_rm There’s a big difference, don’t go for a capital reduction after that, if you can afford to keep paying the same amount, do it.

[@La_Mavimbela]

Im not sure if I understand you, please explain further

[@hlayisanilorraine2111]

Tnx dear💋❤️

[@jefeharthf203]

Hi Nicolette, what does the loan capitalising actual do/mean, does it reduce the term, or only instalment?

[@RaphaelGerard]

Good advice

[@respectkonflikt1371]

Any effect on the rebate interest that get credited to your account monthly? I understand the rebate interest is the result of the advance amount. So if I put the advance amount for capital reduction , how does it affect the rebate interest?

[@skincaresundayswithfreshfa6849]

Hi Fin. Bunny! Can you do a similar video but on personal loan? Does it make sense to pay it off faster ? No penalties?

[@Kazi607]

My fav😍😍😍

[@thandilelose1658]

We love you too.

[@simbongilemflatelwa8895]

Does time matter? Like if I start paying extra at year two of my loan term? Basically the outcome of paying extra for me is to reduce the loan term and not necessarily the installment. So I am just wondering if time is a factor or not 🤔

[@mogomotsimolopyane6167]

What is normally the amount of penalty you pay for the bridge of contract if you dont notice your bank that you are about to terminate the contract?(the answer can be in percentage of X amount)