Hi, first post.

I've lurked for awhile, not really feeling the need to post, but I had an experience today that I thought I'd share.

I've had a student loan through a major loan guarantor since 1995. I've been paying the same monthly payment of $75.00 since 1995. Today, I noticed the balance of my loan was down to a couple thousand dollars, and decided to pay it off in full. I'd never spoken to a rep of the company on the phone before, because I never really needed to. I called the 800 number and was given a fairly short electronic run around before I got through to a live customer service rep. I explained that I wanted to pay off the loan in full using my debit card.

To make a long story short, the following happened:

I was transferred to at least 7 different customer service reps, each asking to verify the exact same personal info.

I was disconnected twice.

I was told that I must enroll in a credit rebuilding program even though I've never missed or even been late on a single payment before they would close my account out.

I actually had a rep tell me that he was going to "do me a favor" and get me into the credit rebuilding program right there over the phone. I replied that my credit score was fine, and that I just wanted to pay off my loan. He hung up on me.

Finally, I was able to get through to someone who took my debit card number and promised to process the transaction the next day. That's today.

Maybe I'm being a bit paranoid, but I got the impression that they did not want me to pay this loan off, and made me jump through all kinds of hoops in the hopes that I'd give up.

Anyway, I thought that It'd be good to pass along if anyone around here is thinking of paying off a student loan. Don't be bullied or blown off.

Hi, kevcam-

Good story.

The way I figure fiat money works is that it needs lots of debtors to allow interest to be created. Without interest, the banking industry does not grow. And, contrary to the idea of banks holding savings, I don't think banks are fundamentally about saving money. I think banks are more about creating debt or other types of transaction obligations, which translate into profit for those entities in the interest, fees, and penalties food chain. Of course, there's the rationale for the debt creation that it invigorates the economy, through the demand for goods and services. A smaller scale barter system probably would take care of most people's need for food, clothing and shelter, though.

When I have an interest bearing loan, I like to pay extra on it, just a little bit, every month, over the life of the loan. It gets retired early that way. If you pay extra the amount of the announced penalty for late payment, you wind up cutting the life of the loan down by months, and potentially years, if you're talking a house mortgage for example.

Credit counseling. lol.

Kate

Kev and Kate,

This reminds me of the central theme of the documentary film, Maxed Out (thank you Kate for the original recommendation).

Apparently credit card companies make the majority of their money from those who only make the min. payment each month, not those who pay it off in full (this despite the fact that the person who may pay off in full may in fact have a much higher balance and credit line).
I suspect the same applies to any sort of loan, they don't want you to pay it off.
In fact I fully believe it is in the best interest of banks to have people in more "dire" financial circumstances.

Thanks for sharing your story, Kev.