OK, so I have an equity line of credit at US Bank on my home which equates to an interest only loan/second mortgage. My goal has been to pay it off as soon as possible and so when I have a significant amount saved, I pay some of it down. Last month I went to my local US Bank office and deposited two checks, one for $8,000.00 and the other for $200.00. I explained that the $8000.00 check was to be paid on the principle of the loan while the $200.00 was for the next automatic withdraw and should be deposited in my checking account.
The clerk deposited the checks and claimed to have made the application of the $8000.00 to the principle, thereby reducing the amount of my total mortgage. She even gave me a new balance that seemed to reflect the applied money.
Today I went in to deposit some money for my next payment and learned that there was nothing due. Asking why, the clerk responded that “oh, you have paid an $8000.00 payment towards future payments so you have paid ahead of schedule”.