What Happens at The End of a Loan or Contract? (FAQ+)

May 18, 2023

Congratulations! You’ve made your payments and have nearly paid off your loan or contract (collectively referred to as “account”). What happens next? Here is a rundown of what you can expect at the completion of your account based on whether you pay off your account as scheduled or pay off early.

Paying off Your Account as Scheduled

As you near the last payment on your account, what needs to happen? Do you pay just the regular payment?

You should always call your branch to get your current payoff. Depending on the payment history, the final payment amount can vary and may be more or less than a regular payment. The amount shown in Reliable Credit’s eServices portal is the principal balance on the account which is not the same as the payoff amount. The payoff amount is calculated by adding to the unpaid principal balance any interest that has accrued since the last payment, adding any assessed late charges or other fees, and subtracting prorated refunds of any credit insurances or other ancillary products you may have purchased directly from Reliable Credit. Any prorated refunds of any credit insurances or other ancillary products you may have purchased directly from a dealer need to be collected directly from the dealer.

If paying off an account as scheduled, what causes the final payment amount to vary? 

The final payment amount may vary due to the timeliness of payment history. If you made your monthly payments before the due date and/or paid more than the regular monthly payment, your principal balance decreases faster, and you pay off the account sooner than scheduled. If you make your monthly payments later than the due date and/or pay less than the regular monthly payment, more interest accrues, your account may be assessed late charges or other fees, your principal balance decreases slower, and your final payment will be larger than scheduled because you did not pay down the principal balance at the expected rate. 

It’s a wonderful feeling making the final payment on an account and feeling that sense of accomplishment.

Paying off Your Account Early

Are there any penalties for paying off an account early?

No. Any customer can pay off their account at any time. Reliable Credit does not charge any fee (often called a “prepayment penalty”) for paying off an account early.

Are there any benefits to paying off an account as scheduled versus paying it off early?

The biggest benefit to paying your account as scheduled, and on time, is that it will help you establish long term credit history with the credit reporting agencies. Reliable Credit furnishes information to credit reporting agencies on a monthly basis through the month in which an account is paid off. Paying off early decreases the length of time that payment information is furnished to the credit reporting agencies.

The benefit in paying off your account early is saving interest or finance charges. Since Reliable Credit accounts are simple interest accounts, interest (if a loan) or finance charge (if a contract) accrues daily on your unpaid principal balance at your interest rate (if a loan) or Annual Percentage Rate (if a contract). If you pay earlier than your due date and/or more than your regular monthly payment, the amount of interest or finance charge that accrues is less, ultimately saving you money over the life of your account.

Common Questions for Early or As Scheduled Payoffs

How can the final payment be made?

All payments, including payoffs, can be made via the following methods:

• Online – ACH and debit card payments can be scheduled via eServices online or with the mobile app.
• Telephone – You can schedule one-time ACH and debit card payments with a live or virtual agent by calling the branch location that services your account.
• Mail – Checks, money orders, and cashier’s checks can be mailed to the branch location that services your account. Please write your account number on the check, money order, or cashier’s check.

Does Reliable Credit send anything to confirm the payoff?

The timing depends on the payment method of the payoff. If you pay off using a cashier’s check, Reliable Credit will mail you a letter confirming that your account has been paid in full typically within 1-2 days. If another payment method is used, the letter will be mailed to you within 10 to 15 days.

If the account was secured by a vehicle, how long does it take to get the title?

If you pay off using a cashier’s check, Reliable Credit will typically mail you the title along with the letter confirming the payoff within 1-2 days. If another payment method is used, the title will be mailed with the payoff confirmation letter within 10 to 15 days after the payoff is received.  However, the title documents may be released sooner if:

• The payment paying off your account is less than $1,000 and the account has no previous insufficient funds or chargeback activity;
• Reliable Credit can verify that the funds drawn from the account of the check payer have been finally deposited into Reliable Credit’s bank account; or
• Reliable Credit deems the individual, entity, insurance company, or financial institution financially sound and responsible, based on past experience with the payer and the dollar amount involved.

It’s a wonderful feeling making the final payment on an account and feeling that sense of accomplishment. We hope that the above information expands your understanding of the account completion process. If you have any additional questions about this topic or obtaining a new loan with Reliable Credit, you are always welcome to reach out to us by contacting a branch near you.

-Tacoma Team