Consumer complaint received 2024-02-08
Product: Student loan — Private student loan
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: Nelnet, Inc. (CA)

I have a private student loan from Firstmark services. On XX/XX/XXXX I made an additional payment of {$330.00} ( in addition to my auto debit monthly payments made on the XXXX of every month ). Per the payment page, under the title " How do I submit special payment instructions online?, '' " After submitting your payment online, you may contact Firstmark via phone or email to have this single payment applied as you wish '' I contacted firstmark by email with the following message, " Hello, I paid {$330.00} today that I would like to be applied to principal only. This is a one time extra payment. My regular monthly payment will be auto debited on XX/XX/XXXX. '' I got the following response : " Dear XXXX, Thank you for contacting Firstmark Services. 

When a payment is received, it is first applied to accrued interest, then to any fees ( if applicable ), and finally to principal. The interest on your loan ( s ) is calculated using the daily simple interest method, based on the principal balance and interest rate of your loan ( s ). 

To calculate how much interest has accrued on your account since your last payment, do the following : Multiply the principal balance by the interest rate ( i.e. {$10000.00} x .08 = {$800.00} ). 
Divide this amount by 365.25, which is the number of days per year ( i.e. {$800.00} / 365.25 = {$2.00} ). 
Multiply the daily rate by the number of days since your last payment ( i.e. {$2.00} x 5 = {$10.00} ). 
This is the amount of interest that has accrued on your account. 

All payments will apply in this manner, even if the due date is advanced. Payment due dates are a way of ensuring the loan is paid off within the term, and do not affect how your payment applies to your account. '' Despite my request, the payment was not applied to principal only. The way this payment was applied resulted in advancing my due date, despite my instructions. 

On XX/XX/XXXX I made another extra payment. At this time, my next due date was now pushed out a month to XX/XX/XXXX, WITH an auto debit payment scheduled for XX/XX/XXXX. Again I requested, " Please apply my payment of {$96.00} to principla only. This is an extra payment. '' ( please disregard my typo, I am trying to capture the exchange as accurately as possible, and the typo occurred in my email ). 

My payment history shows my payment was applied to interest first, with only {$17.00} applied to principal, despite being an entire month ahead on my payments. 

I called Firstmark ( today, XX/XX/XXXX ) to ask that they please honor the statement on their website about applying extra payments per my special instructions, which I submitted in writing, as they state to do. The Firstmark representative reported that they are not able to honor my instructions- all payments are always applied the same way : first to interest, then to fees, then to prinicipal. They stated that the only way I can make a payment to principal only is if I submit my extra payment on the same day as my auto debit, after my auto debit payment has posted, but before XXXX CST , so that there is a {$0.00} balance for interest and fees, and then the extra payment would be applied to principal. This is an incredibly difficult thing to time since I am in PST and my payment may not post on the same date as the due date, but before XXXX XXXX  CST. This appears an unattainable feat. Additionally, they provide written instructions for how to have your extra payment applied per your wishes. It seems they are either lying about this or not educated on how to do implement it.