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Can finance companies charge interest on late payments?

When you make a car payment late can the finance company charge you interest on that payment for the life of the loan? So that when you make the last car payment they want a interest payment because the interest is calculated daily on the late payment.

Public Comments

1. It is calculated because you didn't pay on time so it made the principle higher therefore interest is higher pay extra next several payment.
2. Yes, they charge interest on the outstanding balance.