How to pay on principal --------> NELNET

[ethan17debttackler]

You are exactly right. There is no option to do this on any mobile device, even though they have an app for it. I have less than a year to go with them (with my accelerated payments), and I can't wait to be done with them. 

[BluePoodle]

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@smith5879 wrote:

Keeping the next month's due date actually will affect how much you pay in interest. On a $10,000 loan at 5% interest over 10 years your monthly payment is $106, with $64 going toward principal and $42 toward interest. (On the very first payment at least. Over time a smaller and smaller portion of your monthly payment is applied to interest as the prinicpal decrease over time.) Say you double up one month and pay $212; $128 will have gone to principal and $84 to interest. If the date moves forward, the principal used to cacluate the interest included in the next payment will be $9872. However, if you don't move the due date $170 goes to principal and the same $42 goes toward interest. This means the principal used to calculate interest on the next payment will be $9830 instead. Keep doing this over the life of the loan and you'll pay far less in interest and the loan will be paid off much sooner. Using this scenario, about $1500 less in interest and in about 4 years instead of 10.

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So to clarify, to request "Do not Advance Due Date" means extra payment is being applied to principal of the loan?

[smith5879]

Yes, by opting to not advance the due date, your extra money will be applied solely to the principal.

[credit_challenged09]

thanks for this but I do plan on making more than the minimum payment..

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@smith5879 wrote:

Yes, by opting to not advance the due date, your extra money will be applied solely to the principal.

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[Season79]

I wanted to add some information i learned from nelnet via an online chat. If you make your payment and the next day, go online you will see that it post to future payment. However, you can do the online chat and request an amount above your normal monthly payment, be placed towards the principal. They put the request in and BAM, within 2 days its always moved to my principal.

Side note: I have 2 Loans with them and you have to tell them how much and which loans you want to extra money applied. Good Luck Everyone!!

[Stylez]

Anything you pay above the accrued income always goes to the prinicpal.

[BluePoodle]

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@Stylez wrote:

Anything you pay above the accrued income always goes to the prinicpal.

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No, it goes to "future payments" unless you request otherwise.

[Stylez]

Applying it to future payments pays down the prinicpal. With any loan, you will accrue interest daily. When you make a payment, the accrued interest is paid off first, and then the rest is applied to the prinicpal. So if you have a monthly payment of $100, you accrue interest of $10, and make a payment of $200, then $190  will apply to the prinicpal. Sure, they'll tell you that you don't owe a payment the next month, but you still have $190 that was applied to prinicipal. You'll pay down the loan faster as long as you don't go by the company's due date and make a payment every month.

[smith5879]

If you're on auto pay however, and don't specify that they not advance your due date they won't take out a payment until whatever date it was advanced to. Interest will accrue on the remaining principal during this period, so if you want to pay less in interest, specifying this is a necessity.