Dear Dave,

When paying extra on a car note or mortgage payment is it a good idea to write a separate check? --Scotty

Dear Scotty,

Absolutely! You can include the extra check in a separate envelope with the regular payment, but make sure you write “principle only” in big, bold letters on the envelope and on the check. Also, include the account number in the notation line at the bottom of the check.

Some companies use payment booklets that have a box specifically for entering any amount you want applied directly to the principle. This method is okay, too. Just make sure you keep a good, solid record of the monthly and overall amount you’ve designated to be applied only to the principle.

Trust me, follow these guidelines and you’ll be much less likely to run into a sticky situation because some bozo threw the check into an escrow account or chalked it up as a pre-paid payment! --Dave