Our loan policy does not specifically address 'additional payments'. Currently all plan loan payments are made through payroll deduction. The policy indicates it will allow for pre-payments (payment in full). It is our plan administrators opinion that any 'additional' principal loan payments would constitute a violation of the original loan payment agreement & schedule and cannot be accepted.

Any thoughts?

A loan is a contract that can be modifed by the parties, although certain modifications may have tax consequences.

A lender can agree to accept partial prepayment, but need not unless the loan terms give the debtor the right to make partial prepayment. The parties will have to determine the effect on the remainder of the payments. It is possible that under applicable law loan terms that are silent about prepayment will allow the debtor to prepay.

Once the plan allows prepayments, it may have to accomodate them in the future, so it pays to think through the policy carefully.