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Student Loan Query


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#1 MzSnowleopard

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Posted 31 March 2014 - 08:57 PM

Could someone please help me to understand this. I'm no financial wizard but I'm no idiot either. And this doesn't make sense to me. Based on the starting balances and current ones, this seems like I'm being charge a lot more than 6 and 7.25 %.

 

Loan 1
 
Starting Balance: 12,364.25
 
APR: 7.25 %
 
Monthly Payment: 75.00
 
Payments Made: 1
 
Total Paid: 75.00
 
Current Balance: 12,352.70
 
Amount Deducted from Starting Balance: 11.55
 
---------------------------------------------------------
 
Loan 2
 
Starting Balance: 1,926.73
 
APR: 6 %
 
Monthly Payment: 30.00
 
Payments Made: 13
 
Total Paid: 390.00
 
Current Balance: 1,731.80
 
Amount Deducted from Starting Balance: 194.93

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#2 Hamp

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Posted 01 April 2014 - 02:27 PM

First off, call today and as for an Amortization Sheet from the lending institution, they have to supply you with one at the asking, DO NOT TAKE NO FOR AN ANSWER! This will tell you exactly what you are paying and what it is you are paying. For example if this were a car loan, the Amortization Sheet will show you that you are paying the interest off and almost nothing on the principle, I do not know if this holds true for school loans or not that is why you need to get the Amortization Sheet today!

 

Now my guess is you are confusing APR which is the Interest rate for the entire year with simple interest which is interest on the balance. So in your 6% example your starting balance of 1926.73 then has the interest added to it, (you need the AS to determine how this is done) then you make your 30 minimum payment and you find that you are paying interest alone (almost) and nothing on the principle. By making minimum payments you will almost always be in debt, but you know that already! Make sure you overpay the minimum payment and if you can do so in two checks each month. The first check is for the 30 dollar minimum payment and the second, even if it is just five bucks, is memo-ed to be placed on principle only. BTW banks and other lending institutions hate this practice, so you know it works in your favor.


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#3 MzSnowleopard

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Posted 02 April 2014 - 03:58 AM

Thanks Hamp, I wish I could afford to double pay. As it is my budget is stretched to the limit. I'm paying $324 a month just on my debts. 


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#4 Bookie61

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Posted 02 April 2014 - 12:50 PM

A quick calc on an online amort schedule says your loan is set up for over 40 years!  Does this loan balloon at some point?  Definitely follow Hap's advice and ask them for their schedule.

 

Heres the on line amort link....

 

www.interest.com/debt/calculators/amortization-calculator


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#5 MzSnowleopard

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Posted 03 April 2014 - 04:13 AM

The payment almost doubles in Mar 2016 jumping from $ 80 to $ 148. The nice bit is that Feb 2016 is my final $ 69 payment to Care One. The annoying part is that it means my money just shifts from one to the other.



#6 MzSnowleopard

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Posted 03 April 2014 - 03:33 PM

Here's the estimated payment schedule for both loans
 
Loan 1 is 75 payments of $ 30 beginning 10-14-13
Will be paid in full December 2019
 
Loan 2 is:
 
24 payments of $ 72.99 beginning 03-05-14
119 payments of $ 141.78 beginning 03-05-16
1 payment of $ 138.08 on 02-05-26
Will be paid in full February 2026
 
I know that I've said I wanted to put my education off until I was out of debt. I'm not willing to wait another 10+ years. There's a satellite campus for another community college just over the state border. There is a bus route that goes there. The tuition is $30 cheaper than at WITCC. And I would have financial aid. I lost this at WIT because of the percent drop in my completion rate. 





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