Consumer complaint received 2018-08-23
Company: SLM CORPORATION
State: CT
Product: Student loan
Sub-product: Private student loan
Issue: Dealing with your lender or servicer
Sub-issue: Trouble with how payments are being handled

Complaint:
I have my XXXX XXXX private loan on auto-pay and have made regular on time payments since repayment began. I have also been making extra lump sum payments to my student loans for the past 3 years. I recently discovered that these payments were being applied to outstanding interest THEN principal. I reached out to XXXX XXXX to provide instructions on allocation of these extra monthly payments, so that extra payments are applied to principal first, and they advised that XXXX XXXX can not apply extra payments to principal only. XXXX XXXX is purposefully causing their lenders to incur additional daily interest by not allowing customers to apply extra payments toward principal. See chat with XXXX XXXX below. 

Thank you for choosing to chat with us. An agent will be with you shortly. 
Info at XXXX, XX/XX/XXXX : You are now chatting with XXXX. 
XXXX at XXXX, XX/XX/XXXX : Welcome to our Live Chat service, I am a XXXX XXXX Customer Care Chat Advisor and will be more than happy to assist you today. With whom do I have the pleasure of chatting with today? 
You at XXXX, XX/XX/XXXX : Hi- Is there a way to ensure that my extra payments are applied towards principal? 
XXXX at XXXX, XX/XX/XXXX : I will be more than happy to provide you information on how your payments are applied. To better assist you, is it okay to ask you some additional questions? 
You at XXXX, XX/XX/XXXX : yes XXXX at XXXX, XX/XX/XXXX : May I have your first and last name please? 
You at XXXX, XX/XX/XXXX : XXXX XXXX XXXX at XXXX, XX/XX/XXXX : Thank you for that information. Interest accrues daily on the loan. Payments with XXXX XXXX are applied fees, interest, principal. If there are no fees on the account, then the payments get applied interest then principal. 
You at XXXX, XX/XX/XXXX : Yes and I want them applied to principal first You at XXXX, XX/XX/XXXX : when I make extra payments You at XXXX, XX/XX/XXXX : I have auto pay taking the monthly payment from my account You at XXXX, XX/XX/XXXX : I have been paying lump sum payments for 3 years XXXX at XXXX, XX/XX/XXXX : All payments get applied fees, interest, principal. Unfortunately, we can not apply it to principal first. 
You at XXXX, XX/XX/XXXX : I dont want to continue paying toward the interest You at XXXX, XX/XX/XXXX : what do you mean you can't assist? 
XXXX at XXXX, XX/XX/XXXX : As long as the interest gets covered then the rest goes towards your principal. 
You at XXXX, XX/XX/XXXX : Do I need to file a complaint with the Consumer Financial Protection Bureau to get my EXTRA payments applied the correct way? 
XXXX at XXXX, XX/XX/XXXX : Payments with XXXX XXXX are applied fees, interest, principal. If there are no fees on the account, then the payments get applied interest then principal. 
XXXX at XXXX, XX/XX/XXXX : As stated above once the interest is covered the remaining goes towards principal. Interest accrues daily on your loan. 
You at XXXX, XX/XX/XXXX : XXXX so I need to change that when paying extra payments XXXX at XXXX, XX/XX/XXXX : That can not be changed. All payments with XXXX XXXX are applied that way. 
You at XXXX, XX/XX/XXXX : Ok. Then I will be filing a complaint XXXX at XXXX, XX/XX/XXXX : Alright, besides letting you know how payments are applied with XXXX XXXX , is there anything else that I can assist you with?

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation