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Stopping the bleeding

November 16th, 2018 at 05:11 pm

To stop the bleeding I have to pay an extra $200 a month on my student loans. Today I made my first $100 extra payment. I’ll be doing this each pay period. These things are highway robbery. It’s sad that any extra payment does not go to the principle first.

I’m writing my state senators and congresswomen and men. This is God awful

7 Responses to “Stopping the bleeding ”

  1. creditcardfree Says:

    I'm sorry this is on YOU! You signed up for these loans. True, maybe you weren't informed well, or naive, but you agreed to these payments. This is not a government problem.

  2. LuckyRobin Says:

    This is why we won't take out loans for our kids to go to college. It would destroy us financially. We are already on the brink without adding that kind of usary to our lives.

  3. Amber Says:

    CCF I usually agree with you but not on this one.

    The issue that I have is, any other loan you pay extra on it is applied to the principal (e.g car, home, credit card). I don’t have any problems with paying what I owe, even with the interest, the lenders goal is to make money as with any other business. However, I do have an issue when it’s designed with loan shark tactics. Yes I signed up for it, I’m paying it, however; I can’t believe that anyone would agree that a 20k loan would hit 70k due to interest in a few years (numbers are only an illustration not exact).

    We just have to agree to disagree on this one.

  4. Amber Says:

    LR I don’t know what I was thinking. I worked two jobs and paid my way through undergraduate school. Just going to get a second job to pay this baby off

  5. AnotherReader Says:

    I don't understand. Are you paying all the interest on the loans when due? Or does your payment cover less than what is needed to amortize the loan and some of the interest rolls over?

    Any unpaid interest becomes part of the principal balance and interest is charged on all of the principal balance, including unpaid interest.

    It would be in your best interest to understand the terms of your loan and how your payment is calculated. Whatever your minimum payment is does not matter. The payment you want to make includes all of the interest due and the scheduled principal.

    What types of loans are these? Can you refinance them to lower interest rates? That would be something to look into once you have closed on your house.

  6. Petunia100 Says:

    I like to use the Rule of 72 to estimate both growth of principal and interest cost. Are you familiar with that? You divide 72 by your interest rate; the answer is how many years it will take for the principal to double.

  7. Petunia100 Says:

    In this case, a principal balance of 20k turns into 70k. So it doubles once to 40k, then comes close to doubling a second time.

    If your interest rate is 7%, it would take 20 years for 20k to turn into 80k, so about 17-18 years to turn into 70k.

    At 10%, it would take about 12 years for 20k to turn into 70k.

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