Indicate 'apply to principal' on check for student loans?

Question

If on a check for repayment of a student loan I indicate that the amount (over the monthly payment) should be applied to the principal of the loan, and I also indicate which loan to apply it too, does the lender (in this case, the US Government) have to follow what is written?  I know this works for mortgage payments, as long as you indicate to apply it toward the principal.

In other words, I have two types of loans, one has a higher interest rate, and higher principal, if I send in two separate checks, one for the monthly payment, and the other indicating to apply toward the one's principal, does the lender have to apply it toward the principal or not?

prplfae · Accepted Answer

probably not. i would contact the student loan servicer and ask how you can target your payments. some of them use an automatic check scanner and noone physically sees the check, so they wouldn't be able to follow any instructions included with the check. they may give the option to target your payment online, or you might have to call them after they payment has cleared and instruct them on how you would like it reapplied.

just not that · Answer

Usually lenders have a policy written in how they apply over payments. I'll bet they will distribute the loan across ALL your federal loans (since the check mark doesn't have a field on which loan to apply the overpayment to), but you can certainly ask.

? · Answer

Call the lender and ask how to pay down the principal.  Don't ask random people on the internet what they think that lender will "have to" do.

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Indicate 'apply to principal' on check for student loans?

3 Answers