You must request in writing that the extra amount be applied to principal. You have the right to pay off the loan as fast as you can without a penalty. As the CFPB advises: If you can afford it, paying a little extra each month or making a lump sum payment towards your principal is a great way to lower the total cost of your loan. Not only do you pay down your debt faster, but you save money on interest charges over time. The CFPB also warns about servicers that may not follow your instructions and advises borrowers to contact your servicer if you regularly pay extra toward your loans through automatic payments and ask to establish a standing instruction on your account so your extra money goes to, for example, your most expensive loan-generally the loan with the highest interest rate. You can also provide instructions with individual payments.