I’d like to start paying a little extra each month on my car loan, so I can get out of debt faster. Would it be a good idea to write a separate check for this extra amount?
I think that’s a great idea! You can include the extra check in a separate envelope with the regular payment. In addition, write “principal only” in big, bold letters on the extra envelope and on the extra check. Make sure to also include the account number in the notation line at the bottom. Follow these guidelines, and you’ll be much less likely to run into problems as result of someone at the bank not paying attention.
Some companies use payment booklets that have a box specifically for entering any amount you want applied directly to the principal. See if this is available to you, as well. Regardless, make sure you keep an accurate, written record of the monthly and overall amounts you’re designating as “principal only.”
Great question, Steve!