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Letter to lender of how to apply overpayment
Clash Royale CLAN TAG#URR8PPP
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I'm attempting to make an overpayment to my student loans and wish my payment to not defer my monthly payment date, not alter my payment schedule, not pay off any unpaid interest, and only be applied to the principal of the highest interest loan with the highest balance. Using the template letter from the CFPB, found here, I've drafted the following:
I am writing to provide you with instructions on how to apply the funds for the enclosed payment:
The full amount of this payment should be applied to the principal of the highest interest loan with the highest balance.
If any additional amount above the minimum amount due ends up paying off an individual loan, please then apply any remaining part of my payment to the principal of the loan with the highest interest rate and highest balance.
No part of this payment should be applied to my monthly payment nor be applied to unpaid interest and the payment date should not be postponed because of this payment.
My loan servicer is Navient, who has gotten in trouble for not following requests from borrowers, so I want to make my letter as clear and concise as possible. Is this at all well worded or does it need modifications to be absolutely correct?
student-loan repayment
edited 6 hours ago
Acccumulation
2,428310
asked 6 hours ago
Nielsvh
1062
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Nielsvh is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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up vote
1
down vote
favorite
I'm attempting to make an overpayment to my student loans and wish my payment to not defer my monthly payment date, not alter my payment schedule, not pay off any unpaid interest, and only be applied to the principal of the highest interest loan with the highest balance. Using the template letter from the CFPB, found here, I've drafted the following:
I am writing to provide you with instructions on how to apply the funds for the enclosed payment:
The full amount of this payment should be applied to the principal of the highest interest loan with the highest balance.
If any additional amount above the minimum amount due ends up paying off an individual loan, please then apply any remaining part of my payment to the principal of the loan with the highest interest rate and highest balance.
No part of this payment should be applied to my monthly payment nor be applied to unpaid interest and the payment date should not be postponed because of this payment.
My loan servicer is Navient, who has gotten in trouble for not following requests from borrowers, so I want to make my letter as clear and concise as possible. Is this at all well worded or does it need modifications to be absolutely correct?
student-loan repayment
edited 6 hours ago
Acccumulation
2,428310
asked 6 hours ago
Nielsvh
1062
New contributor
Nielsvh is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |Â
up vote
1
down vote
favorite
up vote
1
down vote
favorite
I'm attempting to make an overpayment to my student loans and wish my payment to not defer my monthly payment date, not alter my payment schedule, not pay off any unpaid interest, and only be applied to the principal of the highest interest loan with the highest balance. Using the template letter from the CFPB, found here, I've drafted the following:
I am writing to provide you with instructions on how to apply the funds for the enclosed payment:
The full amount of this payment should be applied to the principal of the highest interest loan with the highest balance.
If any additional amount above the minimum amount due ends up paying off an individual loan, please then apply any remaining part of my payment to the principal of the loan with the highest interest rate and highest balance.
No part of this payment should be applied to my monthly payment nor be applied to unpaid interest and the payment date should not be postponed because of this payment.
My loan servicer is Navient, who has gotten in trouble for not following requests from borrowers, so I want to make my letter as clear and concise as possible. Is this at all well worded or does it need modifications to be absolutely correct?
student-loan repayment
edited 6 hours ago
Acccumulation
2,428310
asked 6 hours ago
Nielsvh
1062
New contributor
Nielsvh is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
I'm attempting to make an overpayment to my student loans and wish my payment to not defer my monthly payment date, not alter my payment schedule, not pay off any unpaid interest, and only be applied to the principal of the highest interest loan with the highest balance. Using the template letter from the CFPB, found here, I've drafted the following:
I am writing to provide you with instructions on how to apply the funds for the enclosed payment:
The full amount of this payment should be applied to the principal of the highest interest loan with the highest balance.
If any additional amount above the minimum amount due ends up paying off an individual loan, please then apply any remaining part of my payment to the principal of the loan with the highest interest rate and highest balance.
No part of this payment should be applied to my monthly payment nor be applied to unpaid interest and the payment date should not be postponed because of this payment.
My loan servicer is Navient, who has gotten in trouble for not following requests from borrowers, so I want to make my letter as clear and concise as possible. Is this at all well worded or does it need modifications to be absolutely correct?
student-loan repayment
student-loan repayment
edited 6 hours ago
Acccumulation
2,428310
asked 6 hours ago
Nielsvh
1062
New contributor
Nielsvh is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 6 hours ago
Acccumulation
2,428310
asked 6 hours ago
Nielsvh
1062
New contributor
Nielsvh is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
edited 6 hours ago
Acccumulation
2,428310
edited 6 hours ago
Acccumulation
2,428310
edited 6 hours ago
Acccumulation
2,428310
2,428310
asked 6 hours ago
Nielsvh
1062
New contributor
Nielsvh is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 6 hours ago
Nielsvh
1062
asked 6 hours ago
Nielsvh
1062
1062
New contributor
Nielsvh is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New contributor
Nielsvh is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
Nielsvh is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |Â
add a comment |Â
2 Answers
2
active
oldest
votes
up vote
4
down vote
The sample letter that CFPB provides is as follows:
I am writing to provide you instructions on how to apply payments when
I send an amount greater than the minimum amount due. Please apply
payments as follows:
After applying the minimum amount due for each loan, any additional amount should be applied to the loan that is accruing the
highest interest rate.
If there are multiple loans with the same interest rate, please apply the additional amount to the loan with the lowest outstanding
principal balance.
- If any additional amount above the minimum amount due ends up paying off an individual loan, please then apply any remaining part of
my payment to the loan with the next highest interest rate.
It is possible that I may find an option to refinance my loans to a
lower rate with another lender. If this lender or any third party
makes payments to my account on my behalf, you should use the
instructions outlined above.
Retain these instructions. Please apply these instructions to all
future overpayments. Please confirm that these payments will be
processed as specified or please provide an explanation as to why you
are unable to follow these instructions.
Thank you for your cooperation.
You have combined 1) and 2) into one item, which makes it ambiguous (should payments be applied towards highest interest with ties going to highest balance, or go to highest balance with ties going towards highest interest?). Also, while the sample letter says highest interest with ties going to lowest balance, you've said to put payments towards highest balance. I recommend keeping the lowest balance suggestion of CFPB: fewer loans, besides making your repayment simpler, will likely mean lower minimum payments.
You've added "monthly payment nor be applied to unpaid interest" to the sample letter. That doesn't make sense: you want your monthly payment taken care of (presumably, you mean it shouldn't be applied towards your next monthly payment). Also, all unpaid interest in added to your principal, so it doesn't make sense to differentiate between the two. A better version of your final paragraph would be "Credit for the payment should not be deferred to my next monthly payment. The payment should be immediately applied to the principal and reduce the amount accruing interest."
edited 21 mins ago
mhoran_psprep
63.5k887165
answered 5 hours ago
Acccumulation
2,428310
add a comment |Â
up vote
1
down vote
I'm not familiar with the system, but if your agreement allows you to specify how payments should be allocated (you should check whether this is the case), consider making it simpler for the service provider. Make 2 payments each period:
The exact amount needed to cover interest payments for the period. Instructions: "This is the scheduled interest payment for the period from (start date) to (end date)."
Look at the loans, including interest rates etc, and pick the one you want to reduce first. Instructions: "This is an extra payment to reduce the principal outstanding for the XYZ loan."
answered 2 hours ago
Lawrence
2,3481512
add a comment |Â
2 Answers
2
active
oldest
votes
2 Answers
2
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
4
down vote
The sample letter that CFPB provides is as follows:
I am writing to provide you instructions on how to apply payments when
I send an amount greater than the minimum amount due. Please apply
payments as follows:
After applying the minimum amount due for each loan, any additional amount should be applied to the loan that is accruing the
highest interest rate.
If there are multiple loans with the same interest rate, please apply the additional amount to the loan with the lowest outstanding
principal balance.
- If any additional amount above the minimum amount due ends up paying off an individual loan, please then apply any remaining part of
my payment to the loan with the next highest interest rate.
It is possible that I may find an option to refinance my loans to a
lower rate with another lender. If this lender or any third party
makes payments to my account on my behalf, you should use the
instructions outlined above.
Retain these instructions. Please apply these instructions to all
future overpayments. Please confirm that these payments will be
processed as specified or please provide an explanation as to why you
are unable to follow these instructions.
Thank you for your cooperation.
You have combined 1) and 2) into one item, which makes it ambiguous (should payments be applied towards highest interest with ties going to highest balance, or go to highest balance with ties going towards highest interest?). Also, while the sample letter says highest interest with ties going to lowest balance, you've said to put payments towards highest balance. I recommend keeping the lowest balance suggestion of CFPB: fewer loans, besides making your repayment simpler, will likely mean lower minimum payments.
You've added "monthly payment nor be applied to unpaid interest" to the sample letter. That doesn't make sense: you want your monthly payment taken care of (presumably, you mean it shouldn't be applied towards your next monthly payment). Also, all unpaid interest in added to your principal, so it doesn't make sense to differentiate between the two. A better version of your final paragraph would be "Credit for the payment should not be deferred to my next monthly payment. The payment should be immediately applied to the principal and reduce the amount accruing interest."
edited 21 mins ago
mhoran_psprep
63.5k887165
answered 5 hours ago
Acccumulation
2,428310
add a comment |Â
up vote
4
down vote
The sample letter that CFPB provides is as follows:
I am writing to provide you instructions on how to apply payments when
I send an amount greater than the minimum amount due. Please apply
payments as follows:
After applying the minimum amount due for each loan, any additional amount should be applied to the loan that is accruing the
highest interest rate.
If there are multiple loans with the same interest rate, please apply the additional amount to the loan with the lowest outstanding
principal balance.
- If any additional amount above the minimum amount due ends up paying off an individual loan, please then apply any remaining part of
my payment to the loan with the next highest interest rate.
It is possible that I may find an option to refinance my loans to a
lower rate with another lender. If this lender or any third party
makes payments to my account on my behalf, you should use the
instructions outlined above.
Retain these instructions. Please apply these instructions to all
future overpayments. Please confirm that these payments will be
processed as specified or please provide an explanation as to why you
are unable to follow these instructions.
Thank you for your cooperation.
You have combined 1) and 2) into one item, which makes it ambiguous (should payments be applied towards highest interest with ties going to highest balance, or go to highest balance with ties going towards highest interest?). Also, while the sample letter says highest interest with ties going to lowest balance, you've said to put payments towards highest balance. I recommend keeping the lowest balance suggestion of CFPB: fewer loans, besides making your repayment simpler, will likely mean lower minimum payments.
You've added "monthly payment nor be applied to unpaid interest" to the sample letter. That doesn't make sense: you want your monthly payment taken care of (presumably, you mean it shouldn't be applied towards your next monthly payment). Also, all unpaid interest in added to your principal, so it doesn't make sense to differentiate between the two. A better version of your final paragraph would be "Credit for the payment should not be deferred to my next monthly payment. The payment should be immediately applied to the principal and reduce the amount accruing interest."
edited 21 mins ago
mhoran_psprep
63.5k887165
answered 5 hours ago
Acccumulation
2,428310
add a comment |Â
up vote
4
down vote
up vote
4
down vote
The sample letter that CFPB provides is as follows:
I am writing to provide you instructions on how to apply payments when
I send an amount greater than the minimum amount due. Please apply
payments as follows:
After applying the minimum amount due for each loan, any additional amount should be applied to the loan that is accruing the
highest interest rate.
If there are multiple loans with the same interest rate, please apply the additional amount to the loan with the lowest outstanding
principal balance.
- If any additional amount above the minimum amount due ends up paying off an individual loan, please then apply any remaining part of
my payment to the loan with the next highest interest rate.
It is possible that I may find an option to refinance my loans to a
lower rate with another lender. If this lender or any third party
makes payments to my account on my behalf, you should use the
instructions outlined above.
Retain these instructions. Please apply these instructions to all
future overpayments. Please confirm that these payments will be
processed as specified or please provide an explanation as to why you
are unable to follow these instructions.
Thank you for your cooperation.
You have combined 1) and 2) into one item, which makes it ambiguous (should payments be applied towards highest interest with ties going to highest balance, or go to highest balance with ties going towards highest interest?). Also, while the sample letter says highest interest with ties going to lowest balance, you've said to put payments towards highest balance. I recommend keeping the lowest balance suggestion of CFPB: fewer loans, besides making your repayment simpler, will likely mean lower minimum payments.
You've added "monthly payment nor be applied to unpaid interest" to the sample letter. That doesn't make sense: you want your monthly payment taken care of (presumably, you mean it shouldn't be applied towards your next monthly payment). Also, all unpaid interest in added to your principal, so it doesn't make sense to differentiate between the two. A better version of your final paragraph would be "Credit for the payment should not be deferred to my next monthly payment. The payment should be immediately applied to the principal and reduce the amount accruing interest."
edited 21 mins ago
mhoran_psprep
63.5k887165
answered 5 hours ago
Acccumulation
2,428310
The sample letter that CFPB provides is as follows:
I am writing to provide you instructions on how to apply payments when
I send an amount greater than the minimum amount due. Please apply
payments as follows:
After applying the minimum amount due for each loan, any additional amount should be applied to the loan that is accruing the
highest interest rate.
If there are multiple loans with the same interest rate, please apply the additional amount to the loan with the lowest outstanding
principal balance.
- If any additional amount above the minimum amount due ends up paying off an individual loan, please then apply any remaining part of
my payment to the loan with the next highest interest rate.
It is possible that I may find an option to refinance my loans to a
lower rate with another lender. If this lender or any third party
makes payments to my account on my behalf, you should use the
instructions outlined above.
Retain these instructions. Please apply these instructions to all
future overpayments. Please confirm that these payments will be
processed as specified or please provide an explanation as to why you
are unable to follow these instructions.
Thank you for your cooperation.
You have combined 1) and 2) into one item, which makes it ambiguous (should payments be applied towards highest interest with ties going to highest balance, or go to highest balance with ties going towards highest interest?). Also, while the sample letter says highest interest with ties going to lowest balance, you've said to put payments towards highest balance. I recommend keeping the lowest balance suggestion of CFPB: fewer loans, besides making your repayment simpler, will likely mean lower minimum payments.
You've added "monthly payment nor be applied to unpaid interest" to the sample letter. That doesn't make sense: you want your monthly payment taken care of (presumably, you mean it shouldn't be applied towards your next monthly payment). Also, all unpaid interest in added to your principal, so it doesn't make sense to differentiate between the two. A better version of your final paragraph would be "Credit for the payment should not be deferred to my next monthly payment. The payment should be immediately applied to the principal and reduce the amount accruing interest."
edited 21 mins ago
mhoran_psprep
63.5k887165
answered 5 hours ago
Acccumulation
2,428310
edited 21 mins ago
mhoran_psprep
63.5k887165
edited 21 mins ago
mhoran_psprep
63.5k887165
edited 21 mins ago
mhoran_psprep
63.5k887165
63.5k887165
answered 5 hours ago
Acccumulation
2,428310
answered 5 hours ago
Acccumulation
2,428310
answered 5 hours ago
Acccumulation
2,428310
2,428310
add a comment |Â
add a comment |Â
up vote
1
down vote
I'm not familiar with the system, but if your agreement allows you to specify how payments should be allocated (you should check whether this is the case), consider making it simpler for the service provider. Make 2 payments each period:
The exact amount needed to cover interest payments for the period. Instructions: "This is the scheduled interest payment for the period from (start date) to (end date)."
Look at the loans, including interest rates etc, and pick the one you want to reduce first. Instructions: "This is an extra payment to reduce the principal outstanding for the XYZ loan."
answered 2 hours ago
Lawrence
2,3481512
add a comment |Â
up vote
1
down vote
I'm not familiar with the system, but if your agreement allows you to specify how payments should be allocated (you should check whether this is the case), consider making it simpler for the service provider. Make 2 payments each period:
The exact amount needed to cover interest payments for the period. Instructions: "This is the scheduled interest payment for the period from (start date) to (end date)."
Look at the loans, including interest rates etc, and pick the one you want to reduce first. Instructions: "This is an extra payment to reduce the principal outstanding for the XYZ loan."
answered 2 hours ago
Lawrence
2,3481512
add a comment |Â
up vote
1
down vote
up vote
1
down vote
I'm not familiar with the system, but if your agreement allows you to specify how payments should be allocated (you should check whether this is the case), consider making it simpler for the service provider. Make 2 payments each period:
The exact amount needed to cover interest payments for the period. Instructions: "This is the scheduled interest payment for the period from (start date) to (end date)."
Look at the loans, including interest rates etc, and pick the one you want to reduce first. Instructions: "This is an extra payment to reduce the principal outstanding for the XYZ loan."
answered 2 hours ago
Lawrence
2,3481512
I'm not familiar with the system, but if your agreement allows you to specify how payments should be allocated (you should check whether this is the case), consider making it simpler for the service provider. Make 2 payments each period:
The exact amount needed to cover interest payments for the period. Instructions: "This is the scheduled interest payment for the period from (start date) to (end date)."
Look at the loans, including interest rates etc, and pick the one you want to reduce first. Instructions: "This is an extra payment to reduce the principal outstanding for the XYZ loan."
answered 2 hours ago
Lawrence
2,3481512
answered 2 hours ago
Lawrence
2,3481512
answered 2 hours ago
Lawrence
2,3481512
answered 2 hours ago
Lawrence
2,3481512
2,3481512
add a comment |Â
add a comment |Â
Nielsvh is a new contributor. Be nice, and check out our Code of Conduct.
Nielsvh is a new contributor. Be nice, and check out our Code of Conduct.
Nielsvh is a new contributor. Be nice, and check out our Code of Conduct.
Nielsvh is a new contributor. Be nice, and check out our Code of Conduct.
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