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Paid $16k, loan amount went up $3k

Established Member

Paid $16k, loan amount went up $3k

In the 80s and 90s I borrowed about $34k. For about 25 years I was making payments. A few years ago I defaulted, rehabbed, and then defaulted again before getting a better job and picking up payments 6 months later. In 2014, when I defaulted, the value was $35k. Today, after 28 payments of a minimum of $500 per month ($16,100 total) the loan balance has gone *up* $3k. After the default, AES added a $6k fee. I'm paying 9% interest. The payments don't show up on my credit report because the loan just says assigned to the government. 


My credit score's only 629 (I had a BK7 for medical bills in 2012) and it won't get much better because, AES says, the payments will never show on my credit report until the day the loan is fully paid off. $235 of each $500 payment goes to interest. I'm 57 now and I'll be close to 70 when it's paid off. I tried Credible but did not get a prequalified offer and, the site says, am unlikely to with a full application. I'd been thinking that even a higher interest rate would help because it would show installment payments. 


I'm kind of at the end of my rope. Any ideas would be gratefully accepted. Is there another loan refinance site I could try? I do make higher payments when I can, but I live alone in California and rent alone (1-bedroom apartment) takes up a huge part of my pay. This is where I'm licensed to work and the lower salary and rent elsewhere would not make me come out ahead, I calculate. 

Message 1 of 4
Regular Contributor

Re: Paid $16k, loan amount went up $3k

Are these federal or private?

Starting Score: 10/1/2017

Fico8 EQ 591 TU 578 EX 598
Mortgage: EQ 616 TU 632 EX 590

Current Score: 2/1/2018
Fico 8: EQ 608 TU 669 EX 632
Mortgage: EQ 629 TU 657 EX 657

Goal Score:
700 Club

Take the myFICO Fitness Challenge
Message 2 of 4
Frequent Contributor

Re: Paid $16k, loan amount went up $3k

So sorry to read your story. That stinks.. maybe try to figure out a way to pay more than minimum so they dont get any more interest from you.
Message 3 of 4
New Contributor

Re: Paid $16k, loan amount went up $3k

I did not fully read your post. My old comment was a bit harsh for no reason. Sorry. I would request a full payment history to see if you can find errors in the file. The payments should be reported every month and should start to improve your score over time. A lot of the refinance companies require good credit to get the best rates. It might be a bit too early to refiance given your scores.

EX08 749 EQ08 735 TU08 746 Total Credit Line: $49,100Utilization: 8%Inquiries: EQ2 EX2 TU2
Message 4 of 4