Total Due: $0.00
I started this blog to share my experiences with my fellow Pokèmon trainers and others. One of my experiences is receiving a monthly bill where the total amount due is $0.00. It may seem sillier than a mime jr. tickling a hydreigon, but I have been in those occasional situations. (both of them)
To clarify, I’m talking about monthly bills that I knew I would be receiving more in the future. I’m not talking about that letter saying that I finished paying something off and no longer owe money. My rule for these situations has become that I need to pay at least $1.
My student loans are where I have seen this the most. Once my student loans entered repayment was when I first noticed the “Total Due: $0.00.” When I entered repayments for my graduate school loans the payments were extremely high for the amount of money I was making. I filed for an Income-Driven Repayment plan and they dropped to a much more reasonable amount. After I spent the first couple of months overpaying a little each month, one of the loans started billing $0/month. I ignored it and just kept paying what I had been paying on it. I thought that if I kept paying the loan anyhow, it would be good for me in the long run. After a couple more months two of the others started to mirror the first one. I decided to continue paying them with $5 towards each $0.00 bill every month. I thought that it would be good for slowly chipping away at the loans since it seemed to just be extra money I was paying. I also figured that if I kept paying on the $0.00 due, then I would be able to skip a month’s payment in the future if I needed to use that $15 elsewhere.
I was wrong and deceived by a common zoroark illusion that some loan companies use. What was really happening was the loan servicer applied my overpayments to future payments. So those extra $15 dollars weren’t going to pay anything extra of my principal or interest. Their zoroark illusion took my psychic attack that was meant to cause damage this turn, billing cycle, and turned it into a future sight that would cause damage in two turns, billing cycles. Yes, the damage will still be done, but if I had made contact the two turns before, I could possibly not even need an attack at the end of that second turn.
The reason our servicers do this is because when they buy our loans, our lender tells them that we will pay x amount of months at a certain interest rate. Based on that information the servicer can determine how much money they will profit from the interest from our loans. If we are able to pay down our principal and interest before they anticipated, they can’t gain as many profits. They change our psychic into the future sight so their leech seed absorbing our money the right amount of turns for them.
From what I understand, there are ways to prevent this and the key phrase to look or ask for is “apply to principal.” One of my loan servicers makes it easy to access this option right on the payment screen. Another had to be called in order to make it happen. My fiance’s servicer gives him the option after the second month of overpaying. Once we stop the servicers from transforming payments into the future, the total due usually returns to greater than $0.00.
Another trick room our loan servicers use causes us to see the $0.00 and assume that we don't need to make a payment that month. This is their second line of defense and they are counting on it. By not paying that month, like a battling slaking, we give them a free billing cycle to increase our interest and raise their profits, because there is no damage to apply towards a future payment, our principal or our interest.
There is also a hidden ability that some loan servicers give us with incentive programs that reward a mystery number of consecutive payments by lowering our interest rate. The only ways I have discovered these was to hit that mystery number and receive the incentive or by calling and asking them about incentive programs. They may have mentioned them once, briefly or in minimized print, at the beginning of the loans, but I must not have caught it because nothing registered.
These are great programs, but if the $0.00 causes us to flinch and miss a payment, our count starts back at 0. The way I understand how to play this game is that every month, the computers need to register a payment. If we have a bill with $0.00 and make no payment, electronically or through the mail, the computer can’t make a distinction between a payment of $0.00 and no payment. The $1 for every $0.00 bill rule becomes a metronome keeping our monthly payments repetitively hitting month after month without missing. I have been rewarded these incentives on at least five separate occasions.
When my student loans were being deferred, I did not follow my rule and I really wish I had. From the time I graduated undergraduate school, over the following 42 when my grace period ended I could have paid approximately $474 by paying $1 on each loan each month. That’s huge attack power if we consider some of them were subsidized and didn’t have interest growing while deferred. But we’ll tackle subsidized and unsubsidized loans for another day.
Another time when I didn’t follow this rule was for six months with the three student loans mentioned earlier. I actively chose not to follow the rule with them because my priorities had changed and that $90 needed to be shifted to something else. I was trying to grow my savings with a big push. With these loans there were no repetitive payments benefit, I checked. The biggest downside was the growing interest, but at the time I decided that if I needed to pay an extra 6 months of payments in the future, future me would understand. And I do. Sometimes caring for our here and now is more important than our future, as long as we understand what kind of giga impact it can have.
What are your experiences with $0.00 bills? Am I the only one who has experienced these? Do you have any general money rules that you like to share with people?
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