Citibank
Student Loan Balance Unchanged After 15,000 Prepayment Check

I have a graduate student loan with Citibank, which I paid monthly and was not late at all. I decided to make a large payment to reduce my principal balance and sent a 15,000 check to reduce my 73,000 balance substantially. I planned on continuing with regular monthly payments. However, after I made that payment, Citibank stopped sending me my monthly bills.

I was extremely busy, working six days a week, building my business, getting my sons through college, buying a house and dealing with life's events, so I never contacted the bank. I assumed that they did not use my money as a principal reduction, but as an advance payment, with interest included. Only two weeks ago did I receive my first monthly bill after 28 months. My monthly payments have resumed. However, my balance is the same as it was almost 2 1/2 years ago, still 73,000. How is that possible?

I asked myself that, and I asked the Citibank agent I contacted after seeing the latest statement. I was told that I failed to make payments, so the interest had accumulated again, and therefore my balance is the same as it was before I made the 15,000 payment. I told the customer service person that it makes no sense at all and asked why the bank did not continue to send me my monthly bills in the first place. He responded that I should have called them and requested that, and since I did not, they treated my account like a deferment that I never requested. However, they took my money and used it 100% to their benefit! Pretty underhanded and shady banking practices!

I looked up their student loan repayment options online, and it states very clearly that if you want to make a higher payment, there are two options: a.) reduce principal (as indicated by the consumer) and continue to pay monthly, or b.) if the consumer does not indicate this, the payments will be advanced until the money (including the interest) has been used up, at which time monthly bills will resume. In my case, Citibank used my 15,000 to reduce my principal balance, but they stopped sending me bills, which I never requested. Then they treated my account as if I had failed to make payments, so interest accumulated, and now my balance is the same as before.

I believe we, the working people and middle class, need more protection from these kinds of underhanded and shady bank practices. Meanwhile, Citibank is paying its executives high bonuses, while treating us without remorse or conscience.

Company: Citibank
Country: USA

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