/begin rant
It drives me crazy when you make an additional principal payment on a loan and the loan company's default action is to NOT apply it to principal but rather apply it as if you made a whole bunch of pre-payments. This happens even when I ask to them apply a certain amount to principal on the check memo. So now I have to waste time calling in to ask them to change it.
The default action should be to apply any extra payment to principal because I'm sure that is by the more common reason for paying extra on a loan. In fact, I can't think of a good reason for making a bunch of minimum payment pre-payments. Why would you possibly do that? They make the same amount of interest on your loan, AND they get to take your pre-payments and put them in the bank and make interest on them.
In the specific case today, it happens to be a mortgage loan. I tried to call in and spent a long time trying to get through the automated "press 8 to press 2" section because obviously the automated section won't be able to help me with this. Finally I get through and it looks like I'm on hold for a person and then suddenly a recorded voice says:
"We are upgrading our phone system for your convenience, please call back at a later date," followed by a hang up.
Nice. Does this happen to anyone else?
/end rant
The default action should be to apply any extra payment to principal because I'm sure that is by the more common reason for paying extra on a loan. In fact, I can't think of a good reason for making a bunch of minimum payment pre-payments. Why would you possibly do that? They make the same amount of interest on your loan, AND they get to take your pre-payments and put them in the bank and make interest on them.
In the specific case today, it happens to be a mortgage loan. I tried to call in and spent a long time trying to get through the automated "press 8 to press 2" section because obviously the automated section won't be able to help me with this. Finally I get through and it looks like I'm on hold for a person and then suddenly a recorded voice says:
"We are upgrading our phone system for your convenience, please call back at a later date," followed by a hang up.
Nice. Does this happen to anyone else?
/end rant
