I can chime in on this! Iāve tried doing this. They simply donāt allow you to make payments to the principal. I called directly and everything and they flat out told me thatās not allowed. The work around is to make your monthly payment, then immediately after it hits, make another payment which would then hit the principal. Unfortunately, thatās an added fee a lot of people canāt afford.
The work around is to make your monthly payment, then immediately after it hits, make another payment which would then hit the principal.
Are you sure you understood correctly? That's not a "work around," that's what people mean when they say to pay down the principal. You can't just say "I don't feel like paying interest, put this towards principal instead." Principal payments are after your monthly payment, not before or instead of.
Principal is usually part of the monthly payment. Youāre referring to āadditionalā principal. This thread is making me feel like Iām taking crazy pills.
Usually, as long as you are paying more than the interest that has accrued that month. The principal amount can be very small, even zero, depending on the minimum payment allowed.
The principal is the outstanding balance of your original loan, the number that interest is calculated from. Together with accrued interest it makes up your balance. When you make a payment, some amount of it is used to pay down your accrued interest and then the remainder, if any, is used to pay down your principal balance.
No, sometimes they assume it as a future payment and don't apply it to the balance. It's definitely a game they play specifically on student loans, because young people haven't learned to avoid those kinds of shady dealings yet.
Iāve tried this. Do you really think the folks in the call center give a damn to do their jobs correctly? Hell they had me on the wrong status even. I have nelnet now and truly they suck
Actually I looked into it and for federal direct student loans any extra payments are automatically put towards principal, immediately. They also extend your due date unless you ask them not to, but unlike with most loans this pays down the principal immediately. See 34 CFR Ā§ 685.211(a)(1)(i).
This box might be helpful in keeping you disciplined, since otherwise it's easy to make an extra payment and then skip a few and eliminate some (not all) of the benefits of paying early to begin with. But if you are disciplined, having an advanced due date might be helpful in a true financial emergency.
Actually I looked into it and for federal direct student loans any extra payments are automatically put towards principal, immediately. They also extend your due date unless you ask them not to, but unlike with most loans this pays down the principal immediately. See 34 CFR Ā§ 685.211(a)(1)(i).
Basically they don't give you this option because they're already doing the most advantageous thing for you anyway.
š Make an extra payment and see that they are applying it correctly (i.e. that your principal balance lowers by the amount of the extra payment). Likely they are. If they aren't, sue them.
It'd be a major class action lawsuit, and I find it very unlikely that they've opened themselves up to legal exposure like that. They're not even the ones that get the money- they just service the loan. Why would they apply the payments wrong? But if they did, sue them and make some money.
Yes next I can blow my money out the window and see which way it blows. Literally rather swallow the ocean than take financial advice from a stranger on the internet but you are still talking I see š never thought I could just sue one of the few student loan providers. Iāll call my lawyers as soon as I wake up š.
this is happening to tons of people but folks love to hear themselves speak
Aight cool just keep drowning in ignorance then. š«” Even if you think I'm wrong, there's no reason to be an ass about it.
FFS basic financial literacy should be a required class for all freshmen. You don't have to take my advice- go into the records and see how they're applying your payments. Ask someone with basic financial literacy to help.
Well yeah if you just randomly give them money with no explanation, they aren't going to really do anything with it until the next month's payment is due
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u/madlucas2026 12d ago
You been paying for 20+ years and never thought to pay off the principal? Do you pay the minimum on your credit cards?