Loan payments can be made by mail or through the Bank’s branches in the form of cash, check, money order, or cashier’s check. More efficiently, loan payments can be made conveniently by using the Bank’s Automatic Debit Program (see item B, below).
A. Importance of Timely Payment
Making your loan payment on time is one of the best ways to build a strong credit record. The Bank is under obligation to report the payment history of its borrowers to credit bureaus. Each time a payment is received late, it is automatically reported. A few late payments will quickly cause your credit rating to drop. Late payments will also generate penalty and interest charges.
If you maintain a good credit record, you will be able to easily obtain refinancing in the future, or new financing to purchase a new home or for business at a favorable rate. Making your loan payment on time is, therefore, very important to you.
Based upon your mortgage agreement, your monthly installment payment is to be paid on the first day of each month unless your loan is a bi-weekly loan. You are given a grace period of 10 or 15 days depending upon your loan agreement. It is a good idea to plan your mortgage payment ahead. To allow a late payment to occur is simply too costly.
B. Automatic Debit Program
To assist its borrowers to pay mortgage installments on time, the Bank has established an Automatic Debit Program. With your authorization, the Bank will automatically charge your depository account at Abacus or another bank on the dates chosen by you: 1st day, 7th day, or the last day of the grace period for your loan of each month (unless it is a bi-weekly mortgage). Under this Program, you are relieved of the burden of remembering the mortgage payment due date and ensuring that the payment is received by our Bank. However, you must maintain sufficient funds in your depository account. This is truly the simplest way to make sure that your mortgage payment is made on time.
If your depository account is with another bank, it must be a type of checking account. If the account has insufficient funds to meet the mortgage payment on the due date, you will be charged a fee by the depository bank. You will also be charged a fee by Abacus against your loan account. To avoid repeated charges by your depository bank, Abacus will not attempt to debit your depository account again for the same month’s mortgage payment. You must then mail in the payment for that month before the grace period expires to avoid the late payment penalty.
If your designated depository account is with Abacus, it may be a checking or savings account. If the account has insufficient funds, the Loan Servicing Department will continue to debit your account to obtain payment until the grace period expires. The Bank will charge your depository account only once for the month you had insufficient funds.
If you would like to join the Automatic Debit Program or open a depository account, the Bank will be happy to assist you. A form to authorize the debit to your depository account is attached in the following links.
As stated earlier, your depository account at Abacus may be a savings account which has no maintenance fee. Your deposits will earn interest until the day the necessary amount is withdrawn for the mortgage payment. Cumulatively, you can save a lot of interest during the term of the mortgage. This is another good reason for utilizing the Automatic Debit Program and opening a savings account at Abacus.
If there is a need to make a payment not as shown on the payment coupon, i.e. additional principal, payment of late charges and late payments, escrow deficiency, etc. please send your payment directly to the Loan Servicing Department at the address shown below:
Abacus Federal Savings Bank
Loan Servicing Department
6-8 Bowery FL3
New York, NY 10013
Please also indicate clearly the purpose of the payment.