Coffee heat rising

Reno loan GONE!

Well, after two days, almost two hours of dorking around at the credit union, and a quiet stress attack, finally I managed to get someone to take my $21,000. 

At one point I thought maybe I should take it all out of the bank in dollar bills and sprinkle it around the floor of the credit union’s lobby. Let the janitor find a way to use it.

Lenders do not want you to pay off a loan. No. Bad. D-o-o-o-o-n’t take our interest payments away!

Just before the flu struck, Shibu (doughty manager of the credit union branch on the Tempe campus) obtained the precise amount that would be owing as of last Tuesday and e-mailed clear, understandable, easy(-sounding…) instructions for how to pay off the Renovation Loan, which is actually a second mortgage on my house. He said any teller should be able to perform the transaction. 

Then I got sick, in the middle of a vacation. So instead of schlepping to the main campus amid (chaotic!) commencement preparations, I decided to run over to the West campus, which also hosts one of the credit union’s branches. Since I had several other errands to run on the West side, this would work out OK.

So it seemed. 

Teller took one look at Shibu’s instructions and said, “This is something our  manager will have to do. I don’t know how to do it.”

Manager was in with someone else. She would, the teller thought, surely be free soon.

A half-hour later, I was still cooling my heels. The work I needed to do for a client was still waiting for me. The syllabi I’d promised to send to the chair of the department who proposes to hire me to teach three sections next fall were still waiting, yet to materialize even in draft form. The groceries remained to be purchased. The signature form for the locksmith was still to be delivered. My stomach was achingly empty. So, annoyed, I left.

The main campus’s branch is dead empty, the whole place having lapsed into a state of exhausted vacancy after last night’s 70,000-guest Presidential commencement bash. This, I imagine, should be easy.

I hand over Shibu’s written instructions to the teller. Fortunately, he’s in the offing.

She takes about 20 seconds to reach full flummoxhood. He has to come over and take her through the process, step by step. But even then, they make a couple of errors and have to back out and start over. Then they get mysterious error messages and have to figure a way around those. 

This procedure took almost 45 minutes! Then it took another ten or fifteen minutes to make Shibu understand that I wanted the monthly automatic payment that had been going from checking to the loan now to go from checking to money-market savings. Think that finally got settled. I hope.

Now, you know, being an inveterate cheapskate I experience the act of forking over $21,422 as stressful, even when it’s 21 grand that I saved up precisely so I could fork it over. Just hate letting go of pretty little dollars…you have to prize my fingers loose from them. So 45 minutes of repeated efforts to hand over a chunk of dough felt like 45 minutes of waterboarding. At one point as I’m standing there watching them and trying to remind myself that it’s their problem, not mine, my little heart started to pound, the metallic flavor of adrenalin to flood the tongue, the ears to ring, the room to spin. Damn!

From there I had the pleasure of visiting the gynecologist, whose nurse noted that my blood pressure was a shade high. 

No kidding? 

At any rate, the loan is finally paid off. And good riddance. Shibu said it was accruing interest at about $3.50 a day. If one paid it down at a stately rate over its thirty-year term, one would end up paying out exactly twice the original loan amount. What with the extra $200 a month added to routine savings, plus the net teaching salary, plus what I expect to earn freelancing, by the time I exit GDU’s ivied halls the credit union will be holding about $24,000 in savings, more than replacing the amount I earned last year for the express purpose of the pay-off.


9 thoughts on “Reno loan GONE!”

  1. Congrats on paying off the loan early! The bank teller issues aside, this is the type of thing that should hopefully motivate lots of other people to knock out that debt!

  2. This must be a huge relief. It probably would have taken 5 minutes to get a loan (everyone at the Credit Union can do that). Obviously, the payoffs are rare.

  3. @ frugalscholar: Yes, I think that’s one of the implications. That this is considered a task a teller can do but two tellers didn’t know how to do it suggests there’s little demand for the task.

    The other issue is that the credit union actively discourages prepayment of loans. When I first started to snowflake this loan down, they put up quite a fight. At the outset, they told me payments toward principal were not allowed (or, in a related iteration, “impossible”). Then they tried to tell me that if I had extra cash to put toward principal, I had to show up in person on the loan’s due date, at the right time of day, so that the money could be put toward the loan after the regular p&i payment was made; otherwise any amount I paid in would be applied to interest.

    Then it turned out that they had a code (“LOPC”) that had to be marked on the check in order to make the payment apply to principal. As it develops, asking a teller to apply a payment “LOPC” works on any day of the month, but you have to go in person to submit such a payment.

    They charged an extra $37, btw, for the privilege of forking over $21,422 to their coffers. Payoff fee–I specifically asked, when I took out the loan, if there were any prepayment penalties and was told there were not. It’s not enough to keep me from getting rid of the loan…but there it is.

    And credit unions are a great deal more user-friendly than banks about this sort of thing. If I’d had the loan through a bank, I’m might have been confronted with even more hassle and cost.

  4. Good grief, they really didn’t want your cash going towards that loan! I don’t remember having any trouble at all with my credit union when paying my auto loan off. Not only did I pay $150 more towards principal every month during the life of the loan, I paid it off 2 years early.

    And I never had to set foot in the credit union because it’s too far away; all our transactions were by mail and once in a blue moon, by phone. That was quite a few years ago, though, perhaps they’re now less amenable to prepayment.

  5. @ Revanche: It must have something to do with being a loan against a house. I had the same experience you did with my car loan: no problem paying on principal each month and no problem clearing the loan off the books. As I recall, I used to send in the regular payment and with it, I’d add another check marked “for principal only.”

    Paying off a regular mortgage is a bit of an adventure, too. You can’t just send in the amount owing and be done with it. You have to jump through a bunch of hoops, and if the amount you’re going to pay is large, you have to prove where you got the money. And “this month’s meth sales” doesn’t make it…they have no sense of humor! 😉

  6. Grats! My credit union seems to have quite a bit of confusion about making extra payments towards principal as well. A few birthdays ago, all of my sisters each made a loan payment for me, and it resulted in me not having to make any payments for a few months. Then, about a year ago, I inquired about making payments to principal, and was told absolutely, yeah, I can do that after I make the regular payment, just tell the teller to put it to principal. When it didn’t happen, I inquired about it, and was told that it’s impossible (even against the loan contract).

    However, it’ll be a few years til my snowball makes it that far, so no worries for me yet… grats again, I can’t imagine holding on to such a large amount of money all at once only to watch it disappear into a non-tangible void.

    • @ Jake: They tried to tell me that, too, the first time I went in to pay toward principal. In my CU’s case, it wasn’t true: they just try to discourage people from paying off loans early. I had specifically asked, when I took out the loan, if there was any problem about paying it down early and was told not, that would be OK. So I threw a sh*t-fit and made such a scene in the lobby that a manager came out and conceded that of course I could pay it down. The teller needs a secret code to apply your money to principal, a code that isn’t ordinarily given to tellers: it’s “LOPC.” I don’t know what those letters stand for; only that if you put that on a check and you emphasize to the teller that the money is to be applied LOPC, it works.

  7. Whoa, that’s just weird. When I paid of the balance on my mortgage with the life insurance proceeds, it just took a few minutes on the phone. (Which was a good thing, I was in no shape to even drive across town at that point.) And Walt and I had never had any problems with paying extra on the principle either. Our coupon book even had a spot to mark how much extra to principle you were paying. The only snag we hit was after we set up auto debits. Then you had to be sure the standard payment had cleared before sending the stub in with a check for the extra.

    Congrats on paying off the loan.

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