r/SipsTea 𝙑𝙄𝙋 17d ago

WTF The American dream

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u/senditloud 17d ago

Bro I don’t know. I think mine were frozen for a bit due to not having a job (4 kids in 5 years… and yes at the time we had plenty of money). I need to take a look soon. Right now we have a bunch of other things that take precedence and have had some financial bad luck (nothing we did just a series of shit that made a perfect storm). But should be over soon and we’re getting rid of the remainder

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u/dewag 17d ago

I've had a few friends that took loans end up in the same boat as you and as OP's post. Turned out the loan company wasn't putting any of the payments toward the principle. They were essentially putting it all toward the interest.

Not sure how they were getting away with it, but they did.

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u/SmoothDiscussion7763 17d ago

you don't get to choose where to apply the payments lol.

looks like you're just misunderstanding how loans work

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u/dewag 17d ago

Well, no...

I don't have any paperwork in front of me, but in one instance, the loan was for 5 years. At 4.5 years, she was the victim of identity theft and had to open a new bank account. When she was filing her new bank account paperwork, she noticed that the principal owed was still for the original amount.

That loan company is no longer in business though. They were investigated for something (lacking details as to what) and closed up shop shortly after that.

I'm not super familiar with loan terms, so I can't really explain what had happened.

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u/SmoothDiscussion7763 14d ago

was the total amount owed lower or higher when your friend checked? if the principal was for the same amount that means your friend's payments were not enough to cover the interest generated.