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.
- 1Manually checking payment options to specify how extra funds should be applied.
- 2Calling customer service every month to manually apply extra payments toward the principal
- 3Making extra payments as part of the normal monthly bill and letting simple interest mechanics advance the due date
- 4Calling the lender to explicitly request that extra payments be applied to the principal
- 5Checking specific boxes on online forms or payment vouchers
- 6Prepaying months in advance intentionally for budgeting or travel convenience
In their words
Unedited, most upvoted first, 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 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 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 ↗
Where this came up
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