Anonymous
Post 01/04/2014 12:36     Subject: Speaking of student loans...Want to pay down fast. Advice?
Anonymous wrote:This is a total scam an annoyance, and it happens with both federal and private loans.


Thank you! I totally agree; it really should not be so complicated to pay down my student loans and from what I've read, lenders are notoriously bad about putting you back on paid ahead status even when you've asked to be permanently taken off of it. I emailed that I want to be taken off of paid ahead status until further notice since they said I could email my request, but I'm prepared to fax it and send a certified letter too if necessary.
Anonymous
Post 01/03/2014 21:43     Subject: Speaking of student loans...Want to pay down fast. Advice?
Yep, you got it - you need to specify to them in writing that your payments above the monthly installment amount go to principal and are not future installments. In theory I guess you could just keep on sending them a large check every month and it would have the same effect (it's not like they are going to reject your check). But I assume what you want is to stay on automatic withdrawals, right? So you may have to contact them every single time you make a larger payment to make sure they aren't putting you in "paid ahead" status.

This is a total scam an annoyance, and it happens with both federal and private loans.
Anonymous
Post 01/03/2014 21:39     Subject: Re:Speaking of student loans...Want to pay down fast. Advice?
OP I had this problem with one of my lenders too. I called them every month after I made the payment to make sure they were applying the extra money to the principal. It was a pain to do, but I found that they ignored my emails that I sent requesting that they do this.

Anonymous
Post 01/03/2014 21:09     Subject: Re:Speaking of student loans...Want to pay down fast. Advice?
Thank you
Anonymous
Post 01/03/2014 19:11     Subject: Speaking of student loans...Want to pay down fast. Advice?
Yes, you want to make sure any extra you pay goes toward the principal. Right now, it's going toward next payments (principal + interest - and in the beginning it may be largely interest).
Anonymous
Post 01/03/2014 18:49     Subject: Speaking of student loans...Want to pay down fast. Advice?
I have a sizable amount of private student loans that I am trying to pay down. I am, however, trying to figure out the best way to do this and was hoping some here could share their experience in doing so and maybe interpret this email I got from the lender. From what I have read from my lender, I am currently in paid ahead status by default, meaning any payments over the amount due will apply to future payments instead of actually really paying down the loan. So basically, they still get all their interest and my payoff date never changes. To get rid of the paid ahead status of the account, I have to mail them a letter requesting to be permanently taken off of it. I just want to get the balance down as quickly as possible. Can someone interpret this email I got from them? I want to make sure that getting off of paid ahead status is the right thing to do if I'm going to aggressively pay down my loans over the minimum due each month:


Thank you for contacting [lender]. Any payment received for more than the amount billed is applied towards the next due installment; however, this does not affect the manner in which your payments are applied. Although your payment may satisfy a bill due in the future, it is still applied first to satisfy outstanding interest, with any remaining amount applied to your principal balance.

You will continue to receive monthly statements while your loans are paid ahead. These monthly statements may not list an amount due for that month but are reminders that there is a balance remaining on your loans. If you make a payment that partially satisfies a future payment, your statement will show a partial amount due for that month. Interest continues to accrue on your loans while in a paid ahead status.

To permanently remove paid ahead status from your account, you may send us an email from the email address on your account or you may submit your request in writing, including your signature. Correspondence may be sent to our office via blah blah blah...

Please keep in mind that removing paid ahead status will not change the way previous or future payments are applied to principal and interest. When payments are received they are applied to the interest that has accrued through the day before the effective date of your payment, and the remainder of the payment, if any, is applied to the principal balance. Interest will then accrue based on this lower balance; the lower the balance, the less interest that will accrue. Since interest accrues daily, there is always interest outstanding. You can satisfy interest that has accrued through the current date; however, you can not pay future interest because it has not yet accrued.


It still sounds like removing paid ahead status is the way to go to get the balance paid down, right? They try to make it sound like paid ahead is the same as not paid ahead, but in paid ahead status I'm just making future payments with all the interest that entails instead of paying down the loans faster, correct?