- Report: #381751
Complaint Review: Wells Fargo Auto Finance - Phoeniz Arizona
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Why?
Wells Fargo Auto Finance
Phoeniz, 85038-9704 Arizona, U.S.A.
Phone:
800-559-3557
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Wells Fargo Auto Finance Wells Fargo Charging 51% interest a month on Auto Loan Phoeniz Arizona
I took a lean out on my 2005 F150 truck for 10,600 dollars, interest rate of 13.24 %. My payment is $237.12 a month for 5 years. My latest statement from Wells Fargo shows that Pincipal payment was 115.30 and Interest payment was 121.82. As you can see I am paying 51% interest per month on my loan. If I continue paying this interest I will have paid in over 7,300 in interest over the life of the loan for a 10,600 dollar loan.
James
Fort Ashby, West Virginia
U.S.A.
James
Fort Ashby, West Virginia
U.S.A.
3 Updates & Rebuttals
Robert
Buffalo,New York,
U.S.A.
Loan is AMORTIZED.
#2Consumer Suggestion
Wed, November 19, 2008
This means that at the beginning of the repayment period, a large portion of the payment is applied to INTEREST. As the payment period progresses, the portion of the payment towards interest is reduced and the portion of the payment applied to the principal will increase. During the last year of the payment schedule, most of the payment will be applied to the principal. Your loan does work out correctly when amortized. NO ripoff, but I would suggest you learn how loan interest is calculated and applied so that you can make more informed credit choices in the future.
Nikki
Coconut Creek,Florida,
U.S.A.
It won't continue like that.
#3Consumer Comment
Wed, November 19, 2008
Go online to an amortization schedule. Plug in your loan amount, the interest rate, and the term (how long your loan is). Take a look at the monthly schedule and you will see what happens when you finance a car.
Andy
Chanhassen,Minnesota,
U.S.A.
Understanding APR
#4UPDATE EX-employee responds
Wed, November 19, 2008
First of all you need to understand the terms and conditions of ANY loan you sign paperwork on. It is your resposiblity as an adult to due so. Secondly, you are not paying 51% interest. The way APR's work is, in your situation, for a 13% APR that means annual percentage rate. You will pay 13% interes on your total balance for that year. As you pay more principal, in your case roughly $110 on your first payment, increasingly more in following payments, your balance gets lower. On your loan you borrowed $10,000. This means in a year on a $10k balance you would pay $1300 of interest. Next year, when you owe about $8500, you will pay around $1100 in interest. The following year you will owe $6500 and pay $800 in interest, followed by owing $5000 paying $600 in interest and so on until you payoff your loan. Judging by your rate you probaly didn't have perfect credit to begin with so you should be happy a bank was willing to write you a check for ten grand in the first place.
