It Pays to Ask Questions

Hello again! Another post about loan payoff.

We have two loan servicers--one from the government where the majority of David's Dental School loans came from, and one through his school. For the government one, making extra payments on any particular loan is easy. You just select a loan, specify how much extra you want to pay on that loan and you're done! Easy! It will make using our debt snowball, and paying off individual loans a much easier/cleaner process.

From his school we had two loans: a Perkins loan and a Health Professions Loan. They both have the lowest interest rate and he had a apply for the Health Professions one. Anyway, there is no easy way to make extra payments on either loan, separately. A couple weeks ago, when I made a large payment toward loans, my intent was the completely pay off the Perkins loan. So, I made a payment of the minimum payment for the Health Professions loan, and the payoff amount for the Perkins loan. Thinking that would be all there was to it, I went on my merry way.

Well, a few days later I checked the status of that payment, only to get somewhat annoyed. Rather than pay off the Perkins loan, like I wanted, the servicer divided the extra payment between my two loans. So each loan was significantly less (good), but we didn't have one completely paid off (bad). I wanted to be able to use the Perkins loan minimum payment in our debt snowball, and instead I was left with a smaller principle to pay, but still having to make loans and a much smaller snowball.

So, I asked questions. The servicer has an online customer service chat feature. I used it. I asked the customer service rep if there was a way to reallocate the funds I had already paid, or if there was a way to specify where extra payments go in the future. Turns out, she was able to create a work order for a supervisor to reallocate the funds where I wanted them to go. Booyah! The next day, it was done! So, rather than just 3 loans paid off, with a tiny snowball, we have 4 loans paid off, and a larger snowball amount to work with! It is a small start, but it is a start! It pays to ask questions. :)