I will try to make this question as short as possible but there are a lot of details. I have poor credit and wanted to purchase a car. The reason I have credit issues is because I dealt with buy here pay here places in the past and had vehicles literally burst into flames days after purchase or break timing belts etc.; only to have a "REPO" appear after I refused to pay (liability insurance only). I currently have a good job and needed dependable car that wasn't an eye sore in corporate garage. I went to "real" dealer to get the car. I did a great job at negotiating the car price (dropped $5500 off). But hit a brick wall with financing. Then the dealer sent out 47 loan apps to banks everywhere! After the first few said no, the flood gates opened and my credit report really got bad. No other dealer/lender would touch me after the fleet of inquires showed on my report. Finally, one lender said yes but at an unheard of 30% interest on $12500. If I complete the loan as stated I would pay apx. $26000 for the car. Now, to my question... I looked at the contract and there is no penalty for early pay-off. I have been paying the monthly payment of $422.61 plus an additional $52.39. I noticed on the back of the contract is instructs one to send principle payments to another address and as a separate payment.
Is paying the monthly+extra better or worse than paying monthly and a separate principle payment?