Nationwide Biweekly Administration, Inc Biweekly option; regrettably; interest savings; loan term reduction Xenia, Ohio

28th of Jan, 2013 by User998065

I just refinanced a home loan a month ago and today I received a letter starting out with the words "Regrettably may not have made me aware of the option to setup a smaller biweekly payment option..." This letter has my lender's name in the header, making me believe (at first) that they sent the letter. It turns out to be from a scam outfit (named above) in Xenia, Ohio. They claim to be able to save me $64,550 in interest, when, in fact, I'm only paying about $48,000 in interest over the life of the loan. So, essentially, they are promising me a refund. Ha Ha... LOL... I already know how this works, or doesn't work. They want to collect money from me every two weeks, make my ORIGINAL MONTHLY loan payment (hopefully) once a month (that's how my loan is set up with my lender), and they will make an extra partial payment at the end of the year. The idea is to pay a little extra every month to wear down the total interest a little faster and end up paying off the loan a little earlier and a pay a little bit less in total interest. And, that's EXACTLY what it is...LITTLE!! And they will charge me a fee to do this. So, they will be holding my "extra payment" until the end of the year, which means that little bit of extra payment isn't working to bring down the interest each month. Depending on the loan amount and the interest rate, it could make a substantial difference whether that money is applied monthly or at the end of the year WOW!!! Why didn't I think of that? Actually, I did think of it... years ago. Except I took it upon myself to pay the extra amount each and every month and ended up paying off the house in half the time and saved a bundle in interest. Did the same thing with a motorhome loan and paid off the 15 year loan in seven years. The good part is, I didn't have to pay a monthly fee; and, if I didn't or couldn't pay that extra every month, it was no big deal. This is a borderline SCAM to separate people from their money. It's sad that it is legal and that they can use deceptive language. But, on the other hand, some of my very intelligent friends have fallen for this very scam. Don't fall for this scam. You don't have to make bi-weekly payments to save a lot of money paid in interest. You can do the same thing my simply adding about 10% to your normal monthly payment. This will save you a significant amount of interest and take about 30 months off the time to pay it off. The more you pay the more you save and the shorter the time to pay it off.

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