Additional Payments Monthly

I called DirectAxis to ask a simple but important question. If I make additional payments on my loan account each month, a second payment, will that extra money go toward the principal debt or the contract balance?

Shockingly, the consultant I spoke to did not understand the difference between the two and could not give me a straight answer. For a company handling people's finances, this is unacceptable.

Let me clarify the difference they could not understand: Principal debt is the original loan amount still owed, excluding interest and fees. Contract balance, or outstanding balance, includes everything, principal, interest, admin fees, and any other charges.

I want to reduce my principal because that is what future interest is calculated on. But DirectAxis could not confirm if my extra payments would actually reduce the principal or just be absorbed into the full outstanding balance with no long-term benefit.

Because of their lack of clarity and knowledge, I have decided not to make additional payments / second payments monthly. Instead, I will continue paying the set installment each month and save any extra funds in a separate account until I can settle the loan in full.

It is shocking that a financial institution allows staff to deal with clients while lacking even the most basic understanding of loan structures. This experience has seriously damaged my trust in DirectAxis.