Understand payment allocation and application
Payment allocation
Payment allocation is how a payment is distributed across multiple loans. If the payment is received with the remittance slip on the billing statement, we will automatically allocate the payment to all of the loans in that loan group.
Payment application
Once we allocate a payment to a specific loan, payments are applied based on the terms of each loan’s Promissory Note, usually first to Unpaid Fees, then to Unpaid Interest, and then to Current Principal.