Question: I am having trouble understanding how the creditor for my student loan is applying my principal and interest. When I look at the history, the amount applied to the principal and interest changes every month.
They are a beast to deal with (AES Education Loans) and want to know the correct terminology I should use to ask them to send me an amortization schedule so I can see how they are applying my payments.
Since I started my payment, my loan amount has decreased by only $36.73. Something is not right and I need information on how to deal with them. There is hardly anything online that goes through this process that helps the students. NOT the lenders. Thanks for your time!
Answer: I really do not believe you can ask any more intelligently than you already have in your question to me. I like plain and simple wording just as you have used. What portion of your payment is being applied to the principal and interest on the student loan?
The only additions I would make would be as follows:
- Find out if the loan is set up to be repaid in equal monthly installments through standard loan amortization or extended loan repayment. Requesting an amortization schedule should answer that question.
- Find out if the repayment plan is on a graduated payment schedule, if so the payments you are making may only be going towards interest. The lower payment amounts would gradually increase until the balance is paid.
- Are there late fees, penalties or additional interest being added to the loan because the loan balance has only decreased by $36.73.
Once you send the letter with your concerns give them a certain amount of time to respond such as 30 days. If you do not get a response or the response you receive is unsatisfactory then I would get the Ombudsman from the Department of Education involved.
The Ombudsman may be able to intervene on your behalf but more than likely they will want to know what steps you have already taken to resolve the matter. Write your letter and wait for a response then contact the Ombudsman. Find out more about the Ombudsman’s office here.
I am not familiar with this company but if you say it is a “beast” then others are probably experiencing the same treatment. In this situation where you and others believe fraud, unprofessionalism or even something illegal may be occurring you should register a complaint with the Attorney General where the company is headquartered. Your State’s Attorney General should also be contacted to register a complaint.
Companies do not like Attorney Generals looking into their business practices. It may get you the help you need. Good luck to you.