Keith just found out the hard way that if you try to pay off your late fee with Wells Fargo, you can’t just add it on to the regular payment. You have to call them up and tell them where to apply it.

Keith writes:

I am told that I incurred a $21.80 late fee in August on my home equity loan. I paid my minimum payment in September plus the $21.80 late.

The October invoice just came and a $21.80 late fee is on it too.

I checked with my bank and the check to Wells Fargo cleared before the date it had to be there. When I called Wells Fargo I was told that all payments are applied to the principal and I was not incurring a new late fee.

If you want to pay off the late fee you have to call them and specifically have some of the payment (you know, the amount you paid over the minimum for the late fee) applied to the late fee.

OK. It is not the end of the world as the over payment was applied to reduce the principal, but come on. Is that any way to run a bank?

One common thread in all the complaints from consumers who make extra payments on their loans is that the bank is never automatically going to do what you think is right. You need to call them up and tell them where the money is going. This happens frequently with people who try to get ahead on their mortgage payment by paying extra, only to find out the bank has applied the payment to the future interest, rather than the principal. You always need to pick up the phone and tell them what to do, otherwise, odds are, they’ll just pick the option that leaves you paying more for longer.

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