Loan Payoff from auto accident

[Teach10]

My son was recently in an auto accident, which totalled his car. We are trying to settle with the finance company.

Question, his contract says there is no penalty for paying off early as far as finance charges are concerned. The insurance company is paying the full loan off 13 months early. Shouldn't his payoff amount today be less than what it would be if he paid it to term? The way I look at it is that the payment was figured at 18% for 30 months. If it is paid off 13 months early, shouldn't he be credited for 13 months of interest?

I hope you can answer this right away because I need an answer immediately, if not sooner.

We are in Florida

 

[lars coltrane]

I agree. If you are paying early and the contract does not have a penalty, then the interest charge should be adjusted. Read the loan carefully to be sure. You can also call the finance co. and get someone to go over the numbers with you.