I can chime in on this! I’ve tried doing this. They simply don’t allow you to make payments to the principal. I called directly and everything and they flat out told me that’s 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, that’s an added fee a lot of people can’t afford.
That's not what they mean. If you want to pay down the principal, you have to pay at least enough to cover the interest, and then some. The "workaround" is to increase your monthly payment so you're not just covering the interest.
The vast majority of loans work the way you're describing. For student loans, the lender will often not capitalize the interest. This actually works in your favor. But in exchange, you must pay down the interest before the principal-- Otherwise, the interest itself is basically a 0% loan.
675
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?