Why did my car loan increase by $3,300 following something called a "principal disbursement"?

I just noticed on my statement that my car loan principal increased by $3,300, and all it says is "principal disbursement" next to the figure. What does this mean?

“A loan disbursement is an amount of money given to you when you finance the car.
If you received an additional “”principal disbursement,”” that usually means you refinanced the vehicle and took out some extra equity on top.
Sometimes, if you switch your car insurance to something less than full coverage or if you let your coverage lapse, the lender may add force-placed insurance to your loan and add the cost of the policy to the principal.
If you didn’t do either of these, you’ll need to call your lender to find out what the story is.”
Eric Schad
Answered on May 05, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

Did this answer help you?

Ask us a question by email and we will respond within a few days.

Have a different question?

You can meet us at our office and discuss the details of your question.

Read advice from car experts at Jerry

Easiest way to compare and buy car insurance

No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
Find insurance savings — it's 100% free