I just bought a car and will have a high finance rate because of my bad credit history. I am going to have to pay $500 extra each month. Should I pay the extra payments or put the money towards principal?
Hopefully, you have a simple interest loan. If it is a true simple interest loan, the excess funds will go toward principal anyway. If the payments are applied against the next scheduled payment, the lender could prepay the loan. You would still see a savings, but many lenders maintain that you are required to make a monthly payment, even if you are prepaid.
Send your payments in two checks, one for the regular payment, and one for the additional $500, and note to them that it is for principal. If you do that, you'll get your debt repaid faster, will save on the interest, and if reported to the credit bureau, you will improve your rating.
You should ensure your lender reports your history to the credit bureau. They don't all do this.
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Hopefully, you have a simple interest 