Making Prepayments with Mohela

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  • Making Prepayments with Mohela
Author: Joseph Reinke, CFA

Making prepayment payments towards your loans is often a process people we work with have questions about because all of the loan servicers such as Nelnet, Ed Financial, and Mohela make this process very confusing. In this article, we’ll go over a recent change at Mohela that you’ll need to know if you want to make your Mohela prepayments are applied properly.

New Process

Recently, Mohela started requiring borrowers to provide instructions if you want to allocate prepayments towards specific loans. If you don’t fill out this form and provide instructions on how you want those prepayments made, they will put you on what’s called paid ahead status which means you will be paying future months required amount and will not go to the loan you’re actually intending it to go to.

In order to fill this form out, for a one-time payment, you’ll need to submit this request via the Mohela site after logging in. You can call them up to do this as well at 888-866-4352 and they can do this over the phone. Lastly, you can also mail/fax it to them with instructions but you’d have to include the amount, disbursement date, loan type and indicate this is a ‘one-time payment instruction’. This can be done via fax at 866-222-7060 or you can mail it to Mohela labeled:

633 Spirit Drive
Chesterfield, MO 63005-1243

How the Prepayments are Applied

Now that we went over how to fill out those instructions to make the prepayments, you’ll need to know how those payments are then applied.

With the instructions from above filled out and completed, Mohela should then make those payments as described unless it would cause your loans to become delinquent. If it would make your loans delinquent, Mohela will reach out to you to let you know that those prepayments couldn’t be made. Even then, they will store your instructions and still keep that on file as well as notify should anything not be made as originally wanted. Lastly, if there is any sort of discrepancy, they will use your most recent instructions given.

As mentioned above, if you don’t have any instructions given and thought you made extra payments towards your loans, they will likely put you on the paid ahead status as mentioned above, which you don’t want.

Make Sure Prepayments Done Correctly

After you’ve done everything above, these servicers will STILL mess up and make mistakes often. You will need to continuously follow up with them and check your loans to make sure the prepayments were applied properly. If they did make a mistake, you will need to contact Mohela to hopefully get that fixed. However, if you called them to make those prepayments, they have their conversations recorded, so it’d be easy to go back and point that out.

Here at FitBUX, we do have a prepayment tracker to make sure all those payments are done correctly. In the future, you will eventually be able to make those payments directly through our site of which the date will be determined later.

As always, let us know if you have any questions and we’ll be more than happy to answer any concerns you may have about this process. Feel free to contact us and schedule a call!

Joseph Reinke, CFA

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About the Author

Joseph Reinke is a Chartered Financial Analyst (CFA) Charter Holder and founder of FitBUX which has helped over 14,000 young professionals on their journey to financial freedom. Joseph has been personally investing since he was 12 years old.

In addition, he has experience in student loans, mortgages, wealth management, investment banking, valuation, stock trading, and option trading. He has been on 100s of podcast and has been invited to 100s of universities to discuss financial planning with their soon to be graduates.

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