cancel
Showing results for 
Search instead for 
Did you mean: 

Interest question

tag
Anonymous
Not applicable

Interest question

I'm paying back a $45K loan carried by Sallie Mae.  After paying for four years, each month a certain amount of each monthly payment goes to interest and a certain amount to the principal.  However this month, every cent of the $485.00  went towards the interest.  Why the switch I wonder?  The ratio of interest to principal varies each month, I suppose becase of the number of days in the month/billing cycle.  But not a cent towards the principal?

 

Any ideas folks?

Message 1 of 3
2 REPLIES 2
Tazman81
Established Contributor

Re: Interest question

Sallie Mae is normally really good about having all of their information on the website where you can see where your funds are going.  Did your payment amount change?  I.e. is it lower this month than it was for your previous month?  For standard payments your ratio of interest to principal should not vary too much from month to month.  For example, $200 shouldn't go to principal in may, and then in june $50 go to principal.  Based on the amount of your loan, I could see it varying $9 or $10, but that is about it.  Were there any fees charged to your account for this month?

 

Did you just start making payments on your loan?  If so, then normally the first few months will likely go to all principal if they have not "capitalized" that principal on your account yet.  So if for example, you are still in school and you decided to make payments to your student loan, then ALL of the money you send in will go to interest first, and then once all that interest (that has not been capitalized) is paid off, then your payments will start going toward your original principal balance.

 

If the statements are not clear, I would call them up to see if something has changed because if last month half your money went to principal and the other half to interest and then this month it is all going to interest, then there may be something up.  Something has to have changed.


Current Score: Eq: 823 Tu: 830
Goal Score: Eq: 850 Tu: 850

Wallet: PenFed Power Cash 50k | AMEX Blue Cash (AU) 49.5k | Cap One QSMC 26.5k | AMEX Platinum NPSL | USAA Signature Visa 25k
Message 2 of 3
IOBA
Senior Contributor

Re: Interest question

My suggestion is to call them and ask.   If you reach someone who doesn't  understand/or you can't seem to get a straight answer from, insist on speaking to someone in the USA.   

 

When I was making payments on my loans, every single month, they misapplied the funds.  EVERY month!   I was very motivated to pay those off early!

Message 3 of 3
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.