It didn’t take long for me to remember why I hate banks and love credit unions. In October, we finally bought my wife a car. She had been driving her Honda Accord for nearly 10 years and we decided now was the time to take advantage of great deals on cars. After doing a lot of research, we purchased a Honda CRV in October. While we had the cash to pay for it at the time, I decided to take out a small loan on the car in order to keep a comfortable nest egg in the bank.
Our original intent was to use our credit union for the short term loan. In the end, I got talked in to a better interest rate with Chase. I really didn’t think that much of it at the time because I was intending to pay the principal down quickly. Taking the loan just gave me a bit more flexibility. Strike one for me.
Yesterday I created my online account with Chase so that I could easily make additional principal payments. They were very clear on the payment slips that they sent me that I needed to check a box if I wanted any of the amount above the normal payment to go towards the principal. Otherwise they would apply the additional funds toward future monthly payments. The only problem with this is that I send all my payments via Billpay so I can’t check the box. The only way I could make additional principal payments would be to mail in a separate check. That seemed rather ridiculous in the age of the Internet so I logged on to Chase and figured I’d just transfer a payment electronically.
Once I had mapped my credit union account to Chase I went to the payment page and clicked on “pay additional principal”. As I was filling in the amount I noticed that they added an “immediate payment fee” of $10. Are you kidding me? I was not about to pay $10 for the privilege of paying down the principal. Frankly, I was disgusted. Still not wanting to burn up a large chunk of our emergency fund, I picked up the phone and called my credit union to explain the situation. They were happy to help and we created a new loan over the phone to pay off Chase. As a bonus, their interest rate has come down and is cheaper than the loan from Chase.
The main reason I’m happy to switch this over to my credit union is that I can make all the extra payments I want for absolutely no charge and it’s as simple as transferring money online in my, already established, Internet banking account. NEVER AGAIN will I let myself use a commercial bank.
I recently signed up for a checking account with Chase and they never sent me a pin for the my debit card. I called them and they told me I had to go to a local branch to get a replacement pin. I signed up online and had no interest in going to a local branch. I told them to close my account and they charged me an account closing fee that was hidden in the fine print somewhere. Definitely not using Chase again.
hahahaha, i got a kick out of that. i refinanced my mortgage from chase to wells fargo recently. i wonder if wells fargo charges me extra for making an additional principal payment – i haven’t tried yet. i do like my credit union for savings and small loans, but i prefer to do my mortgage w/a big bank just because the rate can generally be talked down.
I had a similar thing happen with Honda Finance.
No where on the website where I view my account does it say where to make a principal payment. So, after paying my regular monthly payment electronically (via my own bank), I mailed another check of $1000, and wrote on it in big letters – Principal Payment Only. Well, they applied it to principal and interest. So, I called Honda Finance and was told there is a separate address in another state where principal payments need to be mailed, but they did revise my recent payment completely to principal. So, to test out the new address, I sent another payment of $100, electronically to the principal payment address, and wrote PRINCIPAL PAYMENT ONLY in the memo, but it was again applied to principal and interest. If they don’t see the memo line, what’s the point of it?
At least they didn’t charge me $10, but I never did sign up for payment via their system to avoid just such a thing.
Clearly, they are not encouraging principal payments.
Yes, I don’t believe that banks and other financial institutions really want you to pay off the loan so quickly so they intentionally discourage it by making it much more difficult than it needs to be. It’s one of the many reasons why I love using a credit union. They link up the loan to my online banking accounts and I literally just have to click a mouse a couple times and they clearly mark principal payments as such.
Bad companies!!!! :)