1. How is my payment divided between principal and finance charges?
Payments are applied first to finance charges and then to other amounts owed, including late charges, principal, and other fees.
Remember, as the principal balance is reduced, the daily per diem also decreases. So, as long as the principal balance is reduced with each payment, the amount of finance charges that accrue daily decreases too. That’s why the amount of finance charges paid at the beginning of a contract is higher than the amount paid at the end.
2. How are finance charges calculated?
All retail installment contracts with Nevada West Financial are “simple interest” contracts. This means that finance charges, often referred to as “interest,” accrue daily, beginning on the date of your contract. Each time you make a payment, the payment amount is applied first to accrued finance charges. The amount of finance charge that accrues is calculated by multiplying the number of days between the last payment and the next payment by your individual daily per diem. The per diem is the amount of finance charge incurred “per day.” The formula is as follows:
Per diem = (current principal balance) x (finance rate) / 365*
* Number of days in a year
Current principal balance of $10,000.00 and finance charge rate of 24%:
($10,000.00) x (.24) / 365 = $6.58 daily per diem
That means $6.58 in finance charges accrue each day. If a payment is received on 6/1/15 and another is received on 7/1/15, thirty days of finance charges accrue. That means $197.40 of a payment would be applied to the accrued finance charges and the remainder to other amounts, including the principal. If the payment in this example was $350.00, $197.40 would be applied to finance charges, and the remaining $152.60 would be applied to the principal balance.
3. What is a grace period?
It’s the time after a payment is due and before a late charge is assessed. Grace periods vary based on applicable law, which in turn depends on where you purchased your vehicle and signed your retail installment contract.
Despite grace periods, your monthly payment is still due by the due date, and if you need to use your grace period you must contact customer service 1-2 business days before your payment is due.
If you fail to make a payment within the grace period, a late charge will be assessed. If we receive a payment near the end of the grace period, allow 1-2 business days for the payment to be processed and credited to your account. If, in such a case, a late charge is assessed and you receive a late notice, it will automatically be removed upon our processing and crediting your payment.
4. If I make a payment for more than my monthly payment, how will the additional amount be applied to my account?
Any additional amount is applied to principle balance owed on your account.
If you have a $350 payment due February 1st, and you send in $750 on February 1st, your payment will satisfy your February 1st $350 payment. The remaining $400 is applied to your principal account balance, and your next payment will be due March 1st.
5. Can I refinance my contract with Nevada West Financial to reduce my payments and/or interest rate?
Nevada West Financial does not offer refinancing at this time. If you decide to refinance with another financial institution, there’s no penalty for paying off your account early.
6. My last payment is due, will it be the same as my regular monthly payment amount?
The last payment amount may vary depending on your payment history. As you approach your final payment, please contact Customer Service at (702) 248-1003 for the amount required to pay off your account in full.
7. Why is my final payment larger than my regular monthly payment amount?
The amount of your final payment can vary depending on your payment history, and may include any amount past due, plus other previously assessed unpaid fees.
This amount is also impacted by your payment history. Your account is based on a “simple interest” retail installment contract, which means that finance charges, or “interest,” accrue on your account each day based on the unpaid principal balance. If you regularly made payments before your due date, fewer finance charges would have accrued during the term of your account. If you regularly made payments after your due date, received a deferment, or asked for a permanent date change later in the month, more finance charges would have accrued and the final scheduled payment is likely larger than the regularly scheduled amount.