Car Loan Daily Intrest?

i am from Tennessee, and i am a cosigner on a used 2004 Dodge Neon, we bought in may of 2007. Acording to the financial company our car loan is through, our payoff was $10,721.88 with a 24.95% Daily intrest rate for 60 months and $320/mo. payments. today the payoff on our billing statment is around $7,500.00 three years later....and the money we have given is well over 10,000 now. I dont understand how they are figuring this up and there are other issues with our payment history that i dont understand, such as them adding a 131.00 payment, then subtracting it, then adding it back, but in pieces like 100.00, 30.95, and then .05. the addition works out but i dont understand why multiple transactions, and all in the same day. the way they are charging late fee is strange too, for one payment 18 days late they charged 5.00, and for another payment only 9 days late they charged 10.00, and other dates got charged that were payed early. I dont understand what they are doing and if it is legal.

Regardless whether the compounding in daily, weekly, or monthly, this is typical. The early payments on a loan pay down the balance at a much slower rate because the interest takes most of it. As that balance does go down, the interest is less, and more of the payment brings the balance down even faster.

The application of payment does sound strange. What did they say when you asked them about these 3 strange things? What do the terms of the contract provide for?

Was a payment made in the amount of $131? If so, why a fractional payment? If not, what do they say is the source of that dollar amount?

BTW, when a loan is compounded daily, you are better off paying as early as you can. That's fewer days of the "higher balance before that payment" being used to calculate interest.

as for the transactions im waiting on an answer, they pretty much got rude with me when i asked about the contract and told me if i had a dispute i was to get ahold of the dealership not them. If the contract was set up for 5 years, and the intrest puts me in the position that i wont be finished paying for it at the end of those 5 years, what will happen? will i just be stuck with paying it? it seems to me that a car that should have only cost 10,000 is going to end up costing 20k or more. they also told us that if we tried to pay payments in advance that we still have to pay the same amount of intrest.