LOAN PAYMENTS

HOW ARE PAYMENTS ALLOCATED?

 

STANDARD STUDENT LOAN PAYMENT ALLOCATION

Unless you specify otherwise, the payment allocation is as follows: fees, interest, then principal.  If there are no fees, payments are applied first to outstanding account interest.  Payments by check that include specific instructions to follow different allocation order will be applied according to those instructions.  However, please note we are not able to process requests to advance payments. If a monthly statement is included with payment, the payment will only be applied to the loan(s) listed on the statement. If one or more other loans are identified on a separate monthly statement, the payment can be applied to the additional loan(s) if you include the borrower ID on the payment.  Otherwise, the payment will be applied to all of the borrower's loans due. 

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FEES

Late fees, returned check fees, court fees, or contingency fees.
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INTEREST

Accrued during the billing period per promissory note rate.
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PRINCIPAL

First applied to capitalized interest, capitalized fees, then to original loan amount. 

PAYING MORE THAN AMOUNT DUE

Paying your account ahead will decrease your total cost of borrowing and allow you to pay your loan off sooner,

  • Payments received with specific instructions from the borrower will follow those instructions (such as applying extra towards one loan).

  • Overpayments made prior to due dates are prorated to principal across all loans.

  • Over payments made on or or after the due date will be applied to principal of the highest interest rate loan first or the oldest loan if all loans bear the same interest rate.  

PAYING LESS THAN AMOUNT DUE

Paying less than the amount due on your account can increase your total cost of borrowing and will take longer to pay off.

  • When a partial payment is received on current loans, payments are applied to loans with the same due date by the highest interest rate loan first, or oldest loan if all loans bear the same rate.

  • If the loans have different due dates, the partial payment would be applied first to the loan with the nearest due date. 

  • If a partial payment is made on past due loans, the payment will be applied first to the most past due loan or the highest interest rate loan if all outstanding loans are the same age, or the oldest account if all loans bear the same interest rate and have the same due date. 

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