How to make extra loan payments go to principal
Lenders often default extra funds as advance payments for future installments rather than applying them directly to the principal balance. This prevents borrowers from reducing their overall debt faster and forces them to manually contact customer service to ensure the money is allocated correctly.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
Found another way around this?
Share your steps and trade-offs so fellow engineers don't have to reinvent the wheel. No account required.
- 1Manually checking payment options to specify how extra funds should be applied.Did this help you?
- 2Calling customer service every month to manually apply extra payments toward the principalDid this help you?
- 3Making extra payments as part of the normal monthly bill and letting simple interest mechanics advance the due dateDid this help you?
- 4Calling the lender to explicitly request that extra payments be applied to the principalDid this help you?
- 5Checking specific boxes on online forms or payment vouchersDid this help you?
- 6Prepaying months in advance intentionally for budgeting or travel convenienceDid this help you?
- 7Taking out an unsecured personal loan with a fixed term and higher monthly paymentDid this help you?
- 8Voluntarily paying more than the minimum monthly payment directly toward the principal of the existing HELOCDid this help you?
- 9calling the dealership or lender to request extra paymentsDid this help you?
- 10saving extra cash monthly in a high-yield savings account (HYSA) to pay off the note entirely laterDid this help you?
- 11setting autopay for a flat extra payment instead of manual trackingDid this help you?
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“Insane! The lender is taking the extra money and putting it into a "paid-ahead status".”source ↗
“I just wanna know if I usually have to specify that I don't want my money to be treated as advanced payments for predetermined installments that include only a little less interest over principal than I have been paying.”source ↗
“I stepped in some financial potholes last year, and used my HELOC to pay some bills. I now have about $39k in debt on the HELOC.”source ↗
“I'm considering taking out a personal loan for the full amount. The most affordable option available to me is a six-year loan at about 8.5%; the monthly note comes to about $650.”source ↗
“Am I crazy for thinking this is a good option? Get it paid off in six years, versus basically never?”source ↗
“I took out a loan and they assured me extra payments would go to principal. Only if the extra is part of the monthly payment it goes to the next month.”source ↗
“When I called to change it they also gave me a hard time, and insisted it made sense to pay for future payments in advance.”source ↗
“I’m reading thru my contract and I legit don’t see a thing about prepayment and ways I can pay outside of required biweekly payments.”source ↗
“I tried to find where I could apply an extra principal payment each month and it doesn’t exist! I called them and they basically said I had to call any time I wanted to do that which is so ass.”source ↗
“told me there is NO WAY AT ALL for me to make principle only payments bcuz of “changes to their system””source ↗
Where this came up
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