I have 2 student loans with Great Lakes. They are both unsubsidized stafford loans. I have one paid ahead until Dec 2015 and one paid ahead until Jan 2017. I'm trying to pay one loan off first since it is smaller and I can pay it all off in about 1 year. I would like to sign up for auto pay for both loans, one for $190/month and one for $10 per month. Is that possible?
The Great Lakes website says "For accounts with payments due, your Auto Pay amount can't be less than your scheduled monthly payment amount. " The website lists my schedule monthly payment as $90.57 and $98.60. I can't enter an amount lower than those into the auto pay amount fields on the website. At the same time, on a different tab on the website it lists my amount due as "paid ahead" so my scheduled monthly payments are correct but technically I don't really have any payment due atm. I italicized those parts because this is what I'm confused about.
If I can't sign them both up the way I want, is it possible to sign just one loan up for auto pay? IMHO, since you get the .25% interest discount for auto pay, I can't see how it could be legal not to be allowed to sign just one loan up for auto pay and obviously only get the interest discount on that one loan. But the website will not allow me to set up auto pay for only one loan. But the website says "Your Auto Pay enrollment will include all loans with payments due that are serviced by Great Lakes." and therefore will not allow me to only set it up for one loan. My point is, I think if the loans were with separate loan servicers I'd be allowed to sign just one up for auto pay and not the other, so why doesn't that seem to be an option just because I have the same loan servicer for both loans?
If I'm missing anything I can give more details. In my mind I feel like I'm being screwed out of the .25% discount, not much but it helps a bit and I'd much rather use auto pay than pay online each month- Great Lakes takes about 15 days for payments to go through for me and half the time they never take my one-time payments- they cancel them at random. Any help is appreciated. Thanks.
As far as I can tell the extra money is all going directly to the principal not future interest. I have the option on the autopay page to select either "apply as refund" or "apply as payment". I use the refund option. I can see the amount of my payments that goes to principal and what goes to interest and it sees to all be going to reducing the principal. From the Great Lakes website:
Payments made within 120 days of your loan disbursement are generally treated as refunds. This directly reduces the amount of money you borrowed (principal) and recalculates any existing accrued interest based on the reduced principal. It also reduces your overall accrued interest—saving you the most money in the long run.
If you prefer all early payments made through Auto Pay be applied as regular payments and not as refunds, you can change your preference below. By selecting Apply as Payment, payments are applied first to any accrued interest, then to your principal balance. Making early payments helps you keep up with your accrued interest so it isn't capitalized; however, you won't benefit from the reduced principal balance that refunds provide.
My issue with this system is that if each loan was with a separate servicer I could enroll one in autopay and not the other. There seems to be no reason in my mind for not allowing it just because they are with the same servicer. I am not currently required to pay anything since I am ahead so it isn't like I'm making them apply a payment to the principal without paying my interest- I completely understand why that isn't allowed.
I'm pretty sure this applies here, maybe it's different for private loans but mine are all federal:
Federal regulations require a loan holder to push the next payment due date up for every multiple of the monthly payment they receive. So, if your payment of $50 is due in October and you send them $100, your next payment isn’t going to be due until December. You can submit or call in instructions to not have the payment due date pushed up, but doing so will not change the way the funds are actually credited to your account. Remember, you can’t prepay interest that hasn’t accrued yet, which is why if you pay extra every month, the amount of money going to the principal will be the same even if the lender pushes your due date ahead.
hmm it's all very odd. I went back on Great Lake's website and I can see a section that says:
- Can I enroll in Auto Pay for only some of my accounts?
For accounts that have payments due, when you enroll in Auto Pay, you authorize automatic monthly payments on all these accounts.
For accounts that do not have payments due, when you enroll in Auto Pay, you authorize automatic monthly payments on only those accounts that you select.
So that would make me think I can auto pay one and not the other but when I actually try to sign one up and not the other it is completely impossible. The wording that confuses me is "accounts that have payments due"- when I look at my account summary I see "Amount Due: Paid Ahead" but then when I go into the screen for auto pay it shows up as:
- Next Payment Due: 09/10/2014
- Scheduled Monthly Payment: $90.57
- Next Payment Due: 09/10/2014
- Scheduled Monthly Payment: $98.60
As if I'm not paid ahead. Very odd. Seems to me the only way to auto pay for just one loan is to forfeit my paid ahead status, which I don't want to do since it is federally required that loan servicers show paid ahead status on federal student loans. Great Lakes is supposed to contact me within a few days so from experience I'm willing to bet that I won't hear from them and when I log in a few days or weeks from now all of my info will be completely wrong and they will fight me on putting it back correctly. They have before. I'll post again if they let me sign one loan up for auto pay and not the other.