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SoFi won't allow me to pay ahead

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  • SoFi won't allow me to pay ahead

    I refinanced my student loans with SoFi in 2018. Have been aggressively paying them off and have just a couple of months left (several years ahead of schedule). So when corona hit and my income dropped I thought "No big deal. My student loans are paid ahead so I shouldn't have to make a payment anytime soon." However, I have since found out that Sofi doesn't allow you to "pay ahead." You can make extra payments towards your principal, and there is no prepayment penalty, but if you make a large extra payment this month it doesn't decrease your minimum payment for next month. Does that sound right? Has anyone else run into this? I called and they said this was written in my initial disclosure document, but I have gone back and re-read it a few times and can't find anything that says that.

  • #2
    I think they are doing this correctly. In general if you are making extra payments you do it to shorten the loan and total interest. Otherwise paying ahead makes no sense because you end up paying the same amount. When I first started paying my loans I had some of the automatic lenders given by my school. Those lenders assumed all extra payments were just "early" and really irritated me.

    So to sum it up, if it was in your disclosure I don't think you can do anything about it. Paying extra for most companies goes to principal. You can't have it both ways.

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    • #3
      This is part of the section on the application of payments most likely. Send in money and that is what they did.
      You might ask if the would “recast” the loan.
      That uses the current principal terms to amortize over the remaining periods. Result is a lower payment. No idea if they will.

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