<prompt> Human: I have an auto loan with 22 interest. Ive been making extra payments on it when I can. I called them to make sure those extra payments were going towards the principle alone and they told me their system doesnt allow that. So instead of paying down the principle, Ill just have it paid off earlier. I assumed that I could pay towards the principle with all loans. Was I wrong?  <response>: There will be a better explanation in your loan contract papers if your loan has a weird setup. Theres a lot of weird ways a loan can be done. For my wifes car they added like 600-900 to the principle to call it a 0 interest loan, really just paying the interest up front. Its a trick so that early paydown has no benefit and all interest will get paid.Doesnt sound like that for your loan, you probably have the traditional deal. By paying off early youre really probably paying down priciple faster... Its not like your principle is a separate account than your interest, so when you pay ahead the total amount owed goes down. As interest is incurred, the balance for your amount owed goes up. The sooner you pay off, the less times interest is incurred, and therefore you are paying more into principle and less into interest.But again, check your docs : maybe call in a second time, the person who explained it to you probably isnt trained in finances, theyre call center service. 