I can't help but think student loan providers are acting like loan sharks. This daily compounding nonsense is beyond infuriating!
I set out to knock off $1,000 from this loan in October, and I achieved that milestone today with my $200 payment. When it eventually updates, my new balance, excluding the absurd estimated interest of $17, will stand at approximately $30,988.00. It's taken me a whopping 10 years of relentless payments, even during COVID, to finally dip below my original borrowed amount. SMH!
Tuesday can't come soon enough – it's payday, and I'm ready to hurl another $300 at this never-ending debt. My mission: squeeze out $1,000 a month to get rid of it. 😤💸
Side note, my ex figured out how to pay for his home repair, he never asked to borrow the money, I guess with me telling him up front I had no money he got the hint.
October 29th, 2023 at 03:24 pm 1698593095
Most types of loans don’t show you the daily accumulation, but they all do it.
If you were to pay off your mortgage, and you Wrote a check tor the full amount owed on your last statement, you would still owe the bank for interest accrued from the day the statement was cut until the day your final payment was processed. You can call the bank, get a payoff amount and pay via wire transfer and sometimes that all makes it through quick enough, but usually you have to pay a little extra to clear the debt and then get a refund if you go very
Same with credit card debt. Interest on carried balances accrues daily. That’s why you sometimes see people urging those with credit card debt to make partial payments throughout the month - it reduces the interest costs a little.
The predatory issue with student loans isn’t how they calculate interest. It’s that they didn’t clearly explain or expose that when income based payments didn’t cover the loan, the interest was added to the principal, so next monTh’s interest owed was higher - but salary seldom increased to keep up. That is what happened to you I think.
The revised plan forgives unpaid interest so ends the predatory part of lending.
But people like you are caught paying the price. That is why I supported the $10,000 loan forgiveness - as a way to make up for some of the predatory practices.
Those near the end of 20 years of payments will see relief soon too as their loans are forgiven.
You unfortunately are caught in the gap.
At least you are tuned in to how debt can be such a burden now.
October 29th, 2023 at 09:40 pm 1698615642
I probably should reword my post, I still they it’s a legal loan shark though
Thanks 😃
October 30th, 2023 at 06:41 pm 1698691276
Lots of Ideas is spot on as far as how interest accumulates. Imagine if you had gotten one of those pay day loans...you'd never get out from under it. Egad.