Author Topic: Should I reset my student loan due date?  (Read 1807 times)

Stachetastic

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Should I reset my student loan due date?
« on: August 10, 2015, 06:49:07 AM »
I have been throwing a few big chunks of cash toward my student loans in recent months. When I spoke with the servicer on the phone (ACS), they told me that all extra payments automatically go toward principle. Their website also states this. When I pay extra, it moves my next due date back, and my next payment is currently showing due in 10/2016. The website gives me the option of resetting this due date--should I? I have autopay set up to send the minimum every month regardless, and I intend to keep throwing money at the loans as I can. My balance is now around 17k and I hope to have the whole thing paid off within a year. 

jezebel

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Re: Should I reset my student loan due date?
« Reply #1 on: August 10, 2015, 07:26:59 AM »
If you are making regular payments anyway, it is not necessary.  Pushing back the due date is for people who need the extra time to pay. 

GoldenStache

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Re: Should I reset my student loan due date?
« Reply #2 on: August 10, 2015, 07:41:46 AM »
I loved watching the next due date move further and further away.  It is nice to know that if you ever really need to skip a payment you can, but just keep pouring money on that fire while you can.   

Apples

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Re: Should I reset my student loan due date?
« Reply #3 on: August 10, 2015, 08:45:21 AM »
My DH's loans kept "moving back" the due date, or alternatively saying the amount due on the next due date was $0.  Just keep automatically paying the minimum each month and throw extra on when you can/want to.  I think they're trying to get you to pay more interest by waiting to make your next payment.  Keep it up!

ETA:  At least in my experience with different providers, the extra money we put on the loans really did go towards principal. I was worried we were just prepaying future payments and not reducing total interest we were going to pay.  I checked with a spreadsheet at home and figured out the extra payments were going towards principal, so all was good.
« Last Edit: August 10, 2015, 08:46:58 AM by Apples »

nereo

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Re: Should I reset my student loan due date?
« Reply #4 on: August 10, 2015, 10:26:43 AM »
I have been throwing a few big chunks of cash toward my student loans in recent months. When I spoke with the servicer on the phone (ACS), they told me that all extra payments automatically go toward principle. Their website also states this. When I pay extra, it moves my next due date back, and my next payment is currently showing due in 10/2016. The website gives me the option of resetting this due date--should I? I have autopay set up to send the minimum every month regardless, and I intend to keep throwing money at the loans as I can. My balance is now around 17k and I hope to have the whole thing paid off within a year.

I've had nothing but bad experiences with ACS - even had a case number and federal case worker because they merged my SL into one without my permission (and increased the rates on 3 of them to the average).  They also pushed the "next payment due-date" back several months each time I'd make an extra payment.  I'd keep a close watch on what they do.

That said, it shouldn't really matter whether you reset the due date or not as long as you continue to pay the same amount each month.  Your loans will end when you've given them enough money to pay them off.  If you hope to have them paid off within a year, keep the monthly payments the same (or increase them), continue to throw extra chunks of cash at them whenever possible, and ignore what ACS says is the "minimum payment" or "next payment due-date".  If you follow their guidelines the loan will take forever to be paid off.
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thingamabobs

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Re: Should I reset my student loan due date?
« Reply #5 on: August 10, 2015, 11:31:49 AM »
Why is it such a problem that the lender pushes back the due date? I thought that is a good thing meaning you're paying off your loan ahead of time? Is there something I'm missing here?

Blonde Lawyer

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Re: Should I reset my student loan due date?
« Reply #6 on: August 10, 2015, 11:36:22 AM »
Why is it such a problem that the lender pushes back the due date? I thought that is a good thing meaning you're paying off your loan ahead of time? Is there something I'm missing here?

The issue would be if they were applying the money to future payments and pre-paying that interest instead of paying the extra towards your principal.  Arguably, if the extra was going to principal then your due date really shouldn't be pushed back because you would still owe interest the next month. 

thingamabobs

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Re: Should I reset my student loan due date?
« Reply #7 on: August 10, 2015, 12:06:55 PM »
I see. thanks for the explanation. My extra payments are going towards the principle and still having my due dates pushed back, I guess they're just hoping we'll stop paying and let the interest accrue?

jezebel

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Re: Should I reset my student loan due date?
« Reply #8 on: August 10, 2015, 02:06:42 PM »
Maybe.  But I bet there are a good number of borrowers that want the due date pushed back, more than those who are focused on paying their loans down early.