Depends on the type of loans you have. Are they subsidized? If not, were you, at least, paying the interest before you started making your payments? Interest on interest can be a killer.
If you are paying above your required payment, I suggest you make two payments each month. The first your standard payment, and then put the overage to principal only. Even if it is just a little bit, it will help.
@Shellie wrote:I have never sat down an done the math on my student loans before. I just pay the payments. So I guess I don't understand how this repayment works.
Original balance on 4 loans was $10,674.75
Original Current Interest
A $6,000 $5030.72 6.55%
B $3,500 $2685.30 5.35%
C $1,166 $909.99 6.55%
D $875 $625.40 4.25%
I have paid since 2011 and paid a total of $5,311.82
My monthly payments were $144 but in 2013 I started paying $160
The current balance for all 4 is $9,251.41
How is it that 4 years of payments and it's only down $1,423.34?
I am in total shock right now. I will literally pay on these for the rest of my life and they will never be paid off. I currently qualify for the $0 payments based on income but I know that your interest continues to accrue and should you find yourself in a position where you do not qualify for $0 income based payments you will owe all of the balance and the interest. I plan on paying more towards the smaller ones and try to get them paid off quicker one at a time. The only problem is I can't afford what I pay now.
I don't want to be rude, but your either your math is off, or your starting balances are off. (You're numbers don't add up.)
Also, if you haven't told the servicer to apply your overpayments to the principal, they will usually apply the overpayments towards future payments. Maybe you're 6 months ahead on your loans.
For your interest rates and what you say you are paying you should be done paying for everything some time in the year 2020.
Also, your remaining balance actually sounds fairly accurate, as your total 10-year repayment should equal around $15,000. (The total payments should be about 30% more than the original principal.) You can reduce your loans faster by requesting that they servicer applies your overpayments to the principal balance.
@Shellie wrote:
I pulled that info directly from the website. Unless I hit a wrong number when I was typing that is the correct information.
Ok, regardless of who's math is what, here's how it breaks down.
Original balance on 4 loans was $10,674.75
Original Current Interest THE REAL AMOUNTS YOUR LOANS COST YOU (on a 10 year repayment at the interest rates shown)
A $6,000 $5030.72 6.55% $8,194 ($6,000 x 6.55% x 10years)
B $3,500 $2685.30 5.35% $4,527 (etc...)
C $1,166 $909.99 6.55% $1,592 (etc...)
D $875 $625.40 4.25% $1,076 (etc...)
$11,541 ~$9,251 $15,389 - $5,311.82 = $10,077 (You are likely ahead of the game - at $9,251 being owed - for paying more than the minimums.)
I have paid since 2011 and paid a total of $5,311.82
My monthly payments were $144 but in 2013 I started paying $160
The current balance for all 4 is $9,251.41
How is it that 4 years of payments and it's only down $1,423.34?
In short it is the interest on the original loan amounts, calculated at a 10 year repayment.
Your lender should list for you on each payment how much went to interest and how much to principal. The early payments will be mostly interest, the last payment, will be almost entirely principal.
@Shellie wrote:Can I ask to have the extra payment amount applies to principle and pay them off slightly quicker?
Yes. Your bill should tell you how to inform them of how you want overpayments applied (towards future bills or towards the principal). Or you can always call them. However, you will most likely have to tell them in writing, and possibly each time you make an overpayment.