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I bought a car last year (well, my dad bought it), and the loan (for the full amount) was dispensed under his name by Toyota Financial Services (TFS). Anyway, TFS allows you to create an account as long as you have the account # of the loan. I've added my bank account, and have been paying the loan in installments ever since. I see on the TFS website that my payments have been going through, and the account balance has been going down. My friend expressed caution that even though I have been paying off the loan, if it's under his name, TFS could potentially void the payments null because there is no evidence that the payments are under his name. How true is this? I'm not at all worried that TFS will do this to me, but I'm curious if I should be more cautious in case I ever deal with a malicious loan dispenser in the future.

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I don't think there's anything to worry about. TFS doesn't really care who's paying, as long as the loan is being paid as agreed. Of course you're helping your dad's credit history and not your own, but I doubt TFS would give back money just because it came from your bank account.

A business may claim a payment wasn't made against the loan, but you'd have the records that you did in fact pay (keep those bank statements). In theory they could sue you, in practice you'd send them the proof and they'd investigate and find the misplaced money. THAT does happen sometimes; the wrong account is credited. If it did end up in court, again you'd win because you have proof you sent payments. Even if you put the wrong loan account number to pay to, you'd have proof you in fact sent the money.

If you're talking about something like a loan shark... they can do whatever they like. They won't sue you though, because again you'd have proof. That's why they'd use violence. But probably a loan shark wouldn't falsely claim you didn't pay if you did, as word would get out and the loan shark would lose business. And again, as long as they get what's agreed to, they don't care how they get it or who they get it from.

  • Would a malicious loan dispenser ever keep the payments instead of returning them? – asfeynman Aug 16 '17 at 23:57
  • @asfeynman If they keep the payments, it reduces the balance of the loan. I'm not sure what you mean by malicious loan dispenser, and I really don't get why you consider TFS to be one. – Andy Aug 17 '17 at 0:15
  • Again, I'm not worried about TFS particularly.. I'm asking in a hypothetical sense: could a malicious loan dispenser accept payments from another payer and still assert that the account hasn't been paid because the payments were not under the dispensee's name? Would it be legal for them to say such a thing? – asfeynman Aug 17 '17 at 0:22
  • @asfeynman Are you talking about a loan shark? Sure, they can say anything they want. They'd lose in court though because you'd have proof you paid them. That's why they'd break your knees instead. – Andy Aug 17 '17 at 0:24
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    @asfeynman No, and if they did, it'd end up in court, where you'd prove the loan was paid. No one cares WHO pays the loan, just that it is paid. – Andy Aug 17 '17 at 0:29

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