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How do you make principal-only payments?
Is there a way for me to make principal-only payments on my loan? I thought I could do it by making an extra payment, but my bank applied the money to the interest instead.
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
In general, borrowers can make principal-only payments by sending their lenders extra money. That said, you should specify how you want the payment to be used since some lenders apply extra payments to
interest and fees
before your principal.Before sending them any money, call your lender and ask about their policy on principal-only payments. If they do allow you to make principal-only payments, you’ll need to follow lender-specific guidelines. For example, some lenders require you to appear in person or pay with a check.
Since you’re trying to pay down your loan, take an extra minute to save on car insurance with
Jerry
. A licensed broker, the Jerry app helps users save an average of $879 a year on car insurance. Just download the app, answer a few questions, and Jerry will help you compare personalized quotes from top providers like Nationwide and Allstate for free.View full answer
- Gregory R.
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