Are there any regulations regards end of loan payment procedures?
There are federal regulations that state that: As a result it can be assumed that when a loan is paid off, notification should be given to the borrower. There is not a penalty since schools are pretty good about recovering their money. It could be due to a simple human error or glitch in the system. I would email them again confirming that your Perkins Loan had been paid in full, just so you have documentation of it.
From my understanding by paying your bills more than 5 days late will not lead you into bankruptcy or stop you from getting a new loan in the future, however it may mean that lenders offer you credit at a higher interest rate. This of course would not help you as you are already struggling with your finances. However, no matter how bad you think things might be for you financially, there are always things you can do to improve your situation. Set a Budget The first thing you must do is to set a budget. List down all sources of income you receive each month, including any allowances. Then list all your sources of expenses and spending. List all your bills such as rent, telephone, electricity, car maintenance, credit card and other loans. Keep a diary for a month for all your discretionary spending - including coffees, lunches, and other odd bits and ends. You can also talk with your existing lenders and come to some agreement on reducing you interest rates on your debts and the repayments. But remember any reduction in repayments may increase your repayment period and the total interest you have to pay in the long term. If you need help setting up your budget here are some links to resources you can download to help you get started: Once you set up your budget you want your total income to be more than your total expenses. If it isn't you will be getting further and further behind each month. Some things you can do are to increase your income - get a job/second job, sell some unwanted items, or start a small home business. Some things you can do to reduce your expenses - make coffees and lunches at home before going out and buying these, pay off higher interest debts first, consolidate all your debts into a lower interest rate loan, reduce discretionary spending to an absolute minimum, cancel all unnecessary services, etc. Debt Consolidation In regards to a Debt Consolidation for your existing personal loans and credit cards into a single lower interest rate loan can be a good idea, but there are some pitfalls you should consider. Manly, if you are taking out a loan with a lower interest rate but a longer term to pay it off, you may end up paying less in monthly repayments but will end up paying more interest in the long run. If you do take this course of action try to keep your term to no longer than your current debt's terms, and try to keep your repayments as high as possible to pay the debt off as soon as possible and reduce any interest you have to pay. Again be wary of the fine print and read the PDS of any products you are thinking of getting. Refer to ASIC - Money Smart website for more valuable information you should consider before taking out any debt consolidation. Assistance improving your skills and getting a higher paid job If you are finding it hard to get a job, especially one that pays a bit more, look into your options of doing a course and improving your skills. There is plenty of assistance available for those wanting to improve their skills in order to improve their chances of getting a better job. Check out Centrelink's website for more information on Payments for students and trainees. Other Action You Can Take If you are finding that the repayments are really getting out of hand and no one will help you with any debt consolidation or reducing your interest rates on your debts, as a last resort you can apply for a Part 9 debt agreement. But be very careful as this is an alternative to bankruptcy, and like bankruptcy a debt agreement will appear on your credit file for seven years and your name will be listed on the National Personal Insolvency Index forever. Further Assistance and Help If you have trouble reading any PDS, or want further information or help regarding any issues I have raised or any other part of your financial situation you can contact Centrelink's Financial Information Service. They provide a free and confidential service that provides education and information on financial and lifestyle issues to all Australians. Learn how to manage your money so you can get out of your debt and can lead a much more comfortable and less stressful life into the future. When you pay off a loan early, you pay the remaining principal, and you save all of the remaining interest. So you do save on interest, but it's the interest you would have paid in the future, not the interest you have paid in the past. (Your remaining balance when you pay off the loan only includes the principal, not the projected interest.) Interest is a factor of the amount borrowed, the interest rate and the amount of time you borrow the money. The sooner you repay the money, the less interest you pay. Imagine if you had taken a 30 year loan at 4% interest but were allowed to make no payments until the loan term ended. If you waited 15 years to make your first payment, you wouldn't owe the same money as if you'd made payments every month. No, instead of owing ~$64k, you'd owe ~$182k, because you had borrowed $100k for 15 years (plus the interest due) rather than borrowing a declining sum. So that's why you don't get a refund on interest for previous months. If you had started with a 16 year loan, then you would have been paying more principal every month, and your monthly amount due would have been higher to reflect that. As you paid the principal off faster, the interest each month would drop faster. Paying a huge portion of the principal at the end of the loan is not the same as steadily paying it down in the same time frame. You will pay a lot more interest in the former case, and rightfully so. It might help to consider a credit card payment in comparison. If you run up a balance and pay only the minimum each month, you pay a lot of interest over time, because your principal goes down slowly. If you suddenly pay off your credit card, you don't have to pay any more interest, but you also don't get any interest back for previous months. That's because the interest accrued each month is based on your current balance, just like your mortgage. The minimum payments are calculated differently, but the interest accrued each month uses essentially the same mechanism. At the current rates, stated in the question, I would push additional funds towards your Stafford loans as their higher interest rates will incur interest charges almost 3 times faster than your private loans. With my loans I have not seen much information regarding private loans jumping the interest rate close to the 6.8% any time in the coming years (if others have insight to this I look forward to the comments).  Due to the private loans being variable there is an element of risk to their rates increasing. Another way to look at it may be to prorate your amount of extra payments according to their interest rate.  $1,000 x 0.068 /(0.068 + 0.025) = $731.18 Toward your Stafford Loans $1,000 x 0.025 /(0.068 + 0.025) = $268.82 Toward your Private Loans Never ever use a giant monster mega bank for home loans.  I am sure you probably didn't and they bought your loan from someone else.  You have no legal options.  What you should do Is look at getting a new loan maybe a 15 year loan.  Your payment might be the same with no PMI. I would check with a relator to see what they think your home is worth.  Also if you have any money you can always pay extra to the principle and get yourself to 20% based on the next appraisal.   You might have a legal option regarding what they say you need in value 350k is what it should appraise to for you to get rid of pmi when you owe 280k Remember Citibank is a publicly traded company and their goal is to make more money. The CEO has a fiduciary relationship with stock holders not customers.  They seriously have board meetings to figure out what charges they can invent to screw their customers and make shitloads of money.  There is no incentive for them to let you get out of your PMI. Maybe there's more to this story, because as written, your sister seems, well, a little irrational. Is it possible that the bank will try to cheat you and demand that you pay a loan again that you've already paid off? Or maybe not deliberately cheat you, but make a mistake and lose track of the fact that you paid? Sure, it's POSSIBLE. But if you're going to agonize about that, what about all the other possible ways that someone could cheat you? What if you go to a store, hand over your cash for the purchase, and then the clerk insists that you never gave him any cash? What if you buy a car and it turns out to be stolen? What if you buy insurance and when you have a claim the insurance company refuses to pay? What if someone you've never met or even heard of before suddenly claims that you are the father of her baby and demands child support? Etc etc. Realistically, banks are fanatical about record-keeping. Their business is pretty much all about record-keeping. Mistakes like this are very rare. And a big business like a bank is unlikely to blatantly cheat you. They can and do make millions of dollars legally. Why should they break the law and risk paying huge fines and going to prison for a few hundred dollars? They may give you a lousy deal, like charge you outrageous overdraft fees and pay piddling interest on your deposit, but they're not going to lie about how much you owe. They just don't. I suggest that you not live your life in fear of all the might-be's. Take reasonable steps to protect yourself and get on with it. Read contracts before you sign, even if the other person gets impatient while you sit there reading. ESPECIALLY if the other person insists that you sign without reading. When you pay off a loan, you should get a piece of paper from the bank saying the loan has been paid. Stuff this piece of paper in a filing cabinet and keep it for years and years. Get a copy of your credit report periodically and make sure that there are no errors on it, like incorrect loan balances. I check mine once every year or two. Some people advise checking it every couple of months. It all depends how nervous you are and how much time you want to spend on it. Then get on with your life. Has your sister had some bad experience with loans in the past? Or has she never borrowed money and she's just confused about how it works? That's why I wonder if there's more to the story, if there's some basis for her fears. When I called Navient about this exact question last year they told me that my loan is a term length loan; so if I were to make extra payments on one of my dozen loans then my total monthly payment would be adjusted (go down) in order to make sure that my loans would still be paid off in x months.   It is very important to note however that Navient has at least 4 loan payment types that I know of so I can make no assurances that yours will work the same way.  The only way to get an absolute answer to this is going to be to Call Navient and ask them. it's so much easier to stop payments then have to go asking for your money after a bank has taken it. I have had monthly homeowners payments taken after I sold a property. Took a lot of effort to get my money back. Wish I had taken a few minutes to stop the payments earlier. Unfortunately there is no universal answer to this question. Each mortgage servicing company will handle it differently according to their own policies. The best way to handle this problem is to talk to your mortgage servicing company and specify that you want all of your over-payments to be applied to principle (assuming that is indeed what you want). Most companies will be willing to work according to your stated preferences, but there may be some companies that have a specific procedure for how to make sure that preference is applied. Unfortunately there is very little you can do about it if you ended up with one of the less friendly mortgage servicing companies out there. Maybe threaten a lawsuit. Good luck.