I purchased a car last year with a six year loan. I was in an accident and my car was totalled. The other parties insurance a covered all but approximately 3000 dollars paying one lump sum. My question is do I have the entirety of my original 6 year loan to pay the remaining balance. My loan co is harassing me stating i have to pay now. According to the numbers I am 7000 dollars ahead on my payments due to the lump sum payout. On my other vehicles if I pay ahead I don't have payments until I've exhausted that window I created by paying more than the minimum payment.
The answer to your question really depends on the terms of your financing agreement. Most agreements require that you maintain regular periodic payments, usually monthly. You can't "pay ahead" and avoid the requirement that you make regular monthly payments. Paying ahead just helps reduce your principal balance. Also, most agreements have an acceleration clause, meaning that if you go into default (i.e. missing a scheduled payment), the entire balance can be accelerated as immediately due.
Advice on this forum is for informational purposes only and should never be mistaken as a substitute for legal advice. If you are in need of legal advice, you should consult local legal counsel.
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