I have the following loans:
A) $12,818 @ 9.25%
B) $11,499 @ 2.25%
C) $10,059 @ 2.25%
D) $ 3,365 @ 10%
I recently received a $5000 inheritance so I would like to allocate this in the best way possible. It seems to me it is best to put it all towards loan A. Although it does not have the highest interest rate, it has a much higher balance than loan D, so it should be accruing more interest anyway, correct?
Now, when I go to Navient's website to repay it and make more than the minimum it says the following:
When you pay more than your Total Payment Amount, the extra funds will be applied to your balance. Unless you make your payments through auto debit, extra payments will reduce the amount of any future payments. For example, if you pay an extra $50 and your regular monthly payment amount is $100, your next payment due will be $50. If the extra funds are more than the next monthly payment(s), your billing statement(s) will show zero due. Even if you have a zero amount due on your billing statement, continuing to make payments will reduce your total costs of borrowing.
I want to pay 100% of the excess payment towards the principal, NOT to future loan payments. I would rather have to continue making my monthly payments towards a principal that has been reduced by my one lump sum payment. I don't want credit towards them because then aren't I paying interest on a higher principal?
Furthermore I want to be able to do this without signing up for auto-pay. I don't ever want anyone to automatically bill my account.
Does anybody have any experience with Navient and know how to do this? I already called them and they seemed to talk in circles saying "It will go towards your future payments, that's just how the system works" Don't I have the right to allocate my payment however I want provided I meet the minimum payments? I want to be billed each month for interest calculated off of a principal that I have reduced with my $5000.