CHANGING Due Dates!

(effective immediately)

Snapshot of what credit borrowers need to know:

  • Borrowers may continue to pay extra funds to their loans, still without a fee
  • Loan due dates may be advanced up to two (2) months -Extra funds paid to loans will be applied to a loan’s principal, helping members pay off loans even faster

 

At the credit union, our loans do not have prepayment penalties, which allows our members to pay extra on their regularly scheduled payments. While this is not changing, we want to make you aware of an important procedural change that might affect you.

For installment loans like vehicle, home equity, and personal loans, it has been our practice to advance due dates based on the amount paid in addition to the regular payment ... For example, if your monthly loan payment is $200 and you make a payment of $600, previously, your next loan payment due date would advance three months. This practice is now being amended so that a loan due date may only be advanced up to two months into the future.

Reasons for our making this important change include alleviating frequent member concerns, better protecting the credit union that we all share, and facilitating our desire to give our member-owners the most favorable advantage when making their payments.

Please consider the following: Imagine you make a large payment intending to pay off your loan. For some reason, you’ve slightly miscalculated and the payment is not enough to cover final principal and interest ... If this had occurred based on our former process, your due date would have potentially been advanced far into the future, causing that your future loan payment wouldn’t register as late for some time. Disconcertingly, since your loan isn’t late, the credit union may not realize you intended to pay the loan off. Troublingly, we would have no reason to contact you until it might be too late to prevent having your credit adversely affected!

By applying payments in the manner that was previously allowed, a great many members made sizeable payments, moving loan due dates far into the future. Upon doing so, many would stop making habitual payments. This was problematic because these members were still accruing interest from the date of the last payment. Thus, an unnecessarily high portion of these members’ future payment had to be applied to merely cover interest.

We hope you will feel comfortable as you endeavor to pay extra to your loans. We will continue to apply your payment in a manner that will help you pay off your loan even sooner! When you make future loan payments, your funds will immediately cover any current interest accrued (along with any late charges, if applicable). Since we never charge projected future loan interest, additional funds will be applied to the loan’s principal!

This change will enable more of our borrowers to potentially save thousands and help them to more easily pay off their loans. Still, if there is a reason that you need to make a large payment and then skip your next few regular payments, please contact us.  As always, we are happy to discuss such arrangements on a case-by-case basis and we are standing by to answer any of your questions.

Thank you for letting Widget Financial continue to meet your lending needs!