"Mine wouldn't budge until I filled out their specific paperwork—felt like jumping through hoops just to pay extra..."
Yeah, lenders can be pretty particular about that. It's actually common practice—they want explicit instructions to ensure payments go toward principal. Annoying, but filling out the form once usually sorts it out permanently.
Yeah, lenders can be pretty particular about that. It's actually common practice—they want explicit instructions to ensure payments go toward principal.
Yeah, I've dealt with this before too. From a lender's perspective, they're just covering themselves—making sure there's no confusion later on about where your extra payments went. But still, I get it... filling out yet another form feels like unnecessary red tape. Once you submit their paperwork though, it's usually smooth sailing from there. Took me maybe 10 mins tops, and afterward all my extra payments automatically knocked down principal without issues. Just gotta jump through their hoops once and move on, I guess.
Yeah, totally agree with you there. I remember when I first started making extra payments, I assumed they'd automatically go toward principal—rookie mistake, haha. Had to call my lender and clarify things, and they explained the whole "explicit instructions" thing. Felt kinda silly at first, but once I got it sorted, it was pretty straightforward. Definitely worth the minor hassle to see that principal balance finally start dropping...
Yeah, lenders can be tricky about that stuff sometimes. I've seen clients assume the same thing, only to realize months later their extra payments weren't touching the principal at all. Did your lender offer any online options to specify how extra payments are applied, or did you have to call each time? I've noticed some banks make it super easy online, while others seem to prefer the old-school phone call route...
"I've noticed some banks make it super easy online, while others seem to prefer the old-school phone call route..."
Yeah, totally agree. When I refinanced last year, I assumed extra payments would automatically chip away at the principal. Turned out, my lender defaulted to applying them toward future interest payments instead. Took me a couple months to catch on—felt like I was spinning my wheels.
I dug around their online portal and eventually found a setting buried deep in the payment options menu. It wasn't intuitive at all, but once I selected "principal only," it stuck for future payments. Still, I double-check every month just to be safe—trust issues, I guess, haha.
One thing I've learned is that even if you specify principal payments online, some lenders still have weird rules about timing. For example, mine requires extra payments to be made separately from the regular monthly payment or they'll just lump it all together as interest-first. So annoying. Now I schedule my regular payment first, wait a day or two until it clears, then submit the extra principal payment separately. It's a bit tedious, but at least I know exactly where my money's going.
Honestly, it's surprising how many people don't realize this is happening until months or even years later. Lenders definitely don't go out of their way to clarify this stuff upfront—probably because it's more profitable for them if we stay confused.
