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Volkswagen Credit Question

PRRGG1

Drag Racing Champion
Location
USA
Does anyone know if Volkswagen Credit assesses a prepayment penalty for paying a loan off early?
 

Keehs360

Autocross Champion
Location
Denver
Car(s)
Mk7.5
Does anyone know if Volkswagen Credit assesses a prepayment penalty for paying a loan off early?
No. My brother knocked out his R payments in about 18-19 months. No penalties

maybe it’s a case by case thing, though I doubt it
 

Terriquez88

Go Kart Champion
I’m curious to know if there is any drawback to paying of a credit line earlier. I don’t know much about credit but I always heard that what’s important is time of credit and on time payments
 

Will_

Autocross Champion
Location
SF Bay Area
Car(s)
2017 GTI S DSG
I’m curious to know if there is any drawback to paying of a credit line earlier. I don’t know much about credit but I always heard that what’s important is time of credit and on time payments
Recently paid mine of early and didn’t see a drop on my credit report. Eliminating the debt reduces your total balances (revolving credit + fixed loans) which is a factor in credit score. General the lower your total balance the better.
 

Ezekiel81923

Drag Racing Champion
Location
Royersford, PA
Car(s)
2019 Volkswagen GTI
Like others have said, no issue. That was my first question to the finance manager.

Once you're set up on VW Credit's site you'll see the option to make additional payments towards your principle. You can't schedule recurring additional payments and the page is glitchy so they don't make it easy if you're trying to pay extra each month but it can be done.
 

PRRGG1

Drag Racing Champion
Location
USA
Thanks y'all -- good to know there's no penalty. (y)
 

kep

Go Kart Champion
Location
Boston
Car(s)
Mk7 Golf R, NA Miata
Make sure the extra payments are going towards the loan principal. I think that is a configurable option on the site.
 

efaily

Go Kart Champion
Location
Chicago 'burbs
Car(s)
2019 GTI SE Exp pkg
Most auto loans are simple interest loans. Simple interest loans are made up of two important parts – principal and interest. Principal is the amount of money you borrow for your purchase while interest is the charge paid for borrowing that money.
With this type of loan, interest is calculated daily on the outstanding principal. At the start of the contract when principal is greater, you pay more in interest, but interest charges go down over time as the principal amount reduces.
If you pay on the scheduled date then you’ll pay the exact amount of interest agreed in your contract. However, the way simple interest car loans work also means a borrower has the opportunity to save and potentially pay off their car quicker.
 

jimlloyd40

Autocross Champion
Location
Phoenix
Car(s)
2018 SE DSG
Make sure the extra payments are going towards the loan principal. I think that is a configurable option on the site.
I paid mine off early and it wasn't necessary to tell them to apply the extra I was paying every month to the principal. They do that automatically on car loans. It's home loans you have to make sure they apply the extra to the principal.
 

cb1111

Newbie
Location
Virginia, USA
I’m curious to know if there is any drawback to paying of a credit line earlier. I don’t know much about credit but I always heard that what’s important is time of credit and on time payments
There are lots of things that go into calculating credit score, but in general, on-time payments are vital as is the amount of unused credit. Paying off a car loan early shouldn't affect your credit negatively but you should decide if the cost of credit (the interest) outweighs you having liquidity or investing your money - that questions comes up when you have 0% or.9% interest and can get a CD for the same amount of time that pays more.
 

Mk_GTI

Go Kart Newbie
Location
Hellinois
Car(s)
2018 Golf R
I’m curious to know if there is any drawback to paying of a credit line earlier. I don’t know much about credit but I always heard that what’s important is time of credit and on time payments
Paying off a collateral backed installment loan early should not affect your credit score. If anything, it will bump it a bit because your total amount of outstanding debt has been reduced.
 

SonictheHatchback

New member
Location
Atlanta, GA
Car(s)
2017 GTI
I’m curious to know if there is any drawback to paying of a credit line earlier. I don’t know much about credit but I always heard that what’s important is time of credit and on time payments
If your interest on your auto loan is lower than you can earn by investing, then it is net beneficial to not pay off your loan early. For instance if you could make minimum payments, then put the additional money you would have spent into an index fund, you would likely come out ahead over time.
 
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