How does a loan rework function?

"My lender got a hold of me for a ""loan rework"" on my auto loan.

To do this, I have to put down a lump sum of $5,000, which only reduced my monthly car note from $320 to $307.

How does a loan rework function? The math doesn't add up."

Answer provided by
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Eric Schad
Answered on May 28, 2021
“You’re right. Something doesn’t add up if you’re putting $5,000 toward your principal, and your payments are reduced by just $13. It sounds like the loan office is just cutting down your principal, which only cuts down the length of the loan.
This loan rework is more like a refinance with another down payment. You need to inquire with your lender about the new interest rate and the length of the loan as well. Hopefully, they’ll tell you why the payment was barely reduced.”
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