Consumer complaint received 2018-10-29
Company: Santander Consumer USA Holdings Inc.
State: GA
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Struggling to pay your loan
Sub-issue: Denied request to lower payments

Complaint:
On XX/XX/XXXX I signed papers for a XXXX XXXX XXXX. The finance manager at XXXX of XXXX XXXX told me that this was a simple interest loan and to minimize interest pay it on a biweekly basis. My child got really sick in XX/XX/XXXX and was sick for 3 years which resulted in alot of medical bills. When I realized there was a problem, I called Santander - they have on their website that you can get lower payments which lowers the interest. The agents only offered to roll the payments to the end. They did this with 8 payments. Unknown to me at this time was the reason for the issue with the account was due to the payments being applied to interest only. No matter how many times I asked what happened to my payment and why isn't the balance going down, it was always a snarky response about my not making my payments and how can I not understand what a simple interest loan is. 

Normal simple interest loans have an amortization schedule that shows over time the balance getting smaller - how more and more of the payment goes to principal and less to interest. 

When I received a payment statement from Santander, I noticed that there were several payments that were applied only to interest. These interest only payments resulted in late payment charges and default notices. 

A significant thing I noticed was there was a period of about 15 months where it didn't matter what I paid, it went to interest only. This has happened several times, and it is believed will continue to happen. That is not a true simple interest loan. Someone is profiting from my detriment. 

Santander also holds the GAAP insurance and the agents have already told me that my payment history would be used to deny any claims that would arise. Again this is not fair because I had no idea that so many payments were posting to interest and trying to get answers from a customer service agent is impossible. 

After review of the payment statement - as of XX/XX/XXXX I have paid {$23000.00} on a car loan for {$22000.00} originated in XX/XX/XXXX for a used XXXX XXXX XXXX. The current payoff is {$17000.00}. Of that {$23000.00} only {$5700.00} went to principal and {$17000.00} went to interest. Of which over 24 payments were applied to interest only which generated a late fees and they generated a default status on the account. This creates a negative credit report which means I can not trade in the car. With a payoff of {$17000.00} on a car that is valued at maybe {$4000.00} ( XXXX XXXX shows a value of {$2100.00} ) - no dealership will accept the car as a trade, in other words, they can not get me out of this loan. 

When Santander did grant lower payments in XX/XX/XXXX, the documentation they had me sign has a clause in it that states that I will be paying more in interest. I had no idea that what that meant was I would continue having interest only payments that would have no effect on the principal balance. This means that based on the loan will never have an end. 

When I call I do not get answers. Just that my payment history XXXX and its a simple interest loan. The way the customer service agent talks to me it is as if I am too XXXX to know what a simple interest loan is. A normal simple interest loan would have an amortization schedule showing how payments are applied over time more of the payment is applied to principal and less to interest. That is not the case with this loan. There is no rhyme or reason to how these payments are posted because there is no consistency. 

I have not be able to get answers on why the payments are only posted to interest instead of a portion applying to the principal. The way Santander applies the payments, it appears that I am not making payments and they always show me 30 to 60 days even though a payment is made monthly. 

The car is only worth {$4000.00} and is leaking oil. With Santander posting so many payments to interest only, the loan will never be paid off. I have considered bankruptcy but that won't help me considering the car wont last until a bankruptcy would be discharged.

Company response to consumer: Closed with explanation