Consolidating Loans, Confused Options

[ttugurl]

Ok so I finally consolidated. But I'm confused and I cant find answers anywhere.

It says my principal is 41k and my interest is 47k and total payoff is about 89k...

it says i pay 240something for the first 2 years and and in 2009 like 280 something until 2031.

89K confused the heck outta me because the interest rate im at is 6 point something.

So my online friend was saying if I double up my payments and not pay the minimum... The 89k lowers? Please explain. Thanks!!!! Anyone know of a helpful site.

Are the consolidating companies as bad as the Lenders then????

[impala454]

it sounds like for some reason your interest was compounding while you were in school.. i dunno why it would have been. and 6%... that sounds astronomical for student loans... who did you consolidate with?

[Spectatrix]

So my online friend was saying if I double up my payments and not pay the minimum... The 89k lowers? Please explain. Thanks!!!! Anyone know of a helpful site.

IF you request the excess to be applied towards the principal (and not just towards future regular payments), then you wouldn't be paying as much in interest because you're taking care of the principal faster.

[pebkac]

it sounds like for some reason your interest was compounding while you were in school.. i dunno why it would have been. and 6%... that sounds astronomical for student loans... who did you consolidate with?

Well, there are subsidized and unsubsidized student loans. Unsubsidized loans do accrue interest while enrolled.

[woody]

So my online friend was saying if I double up my payments and not pay the minimum... The 89k lowers? Please explain

If your interest in 47K and Principle is 41K

this is on the assumption that you make minimum payments ($240/280)

Say you pay $400/month. then $160/$120 extra gets applied to the principle. Then as your principle goes down, you owe less money and less interest is applied. Since you're paying an extra $160 that goes straight to principle and not to interest.

[impala454]

Well, there are subsidized and unsubsidized student loans. Unsubsidized loans do accrue interest while enrolled.

well this is true but to the tune of 42k on 47k over 1-4 yrs??

my total amount of my loans was about 36k, with about 8k i couldn't consolidate bc they were private loans. so i had 28k consolidated with panhandle plains, and on a 20 yr note i started off paying $86/mo, and every 2 years it goes up like $8 (i think, haven't looked in a while). and the rate is something like 2.75%

6.x% on student loans is insane... i think i got a better deal than that on my damn truck

[Mommy]

the going interest rate on student loans is 4%.

I cant imagine her paying almost double what she borrowed, but I dont know shit about loans. I know Im considerably in debt but my parents are paying on them until the end of this month.

[woody]

my interest is at like 3.5%. I pay about 220/month and had about 40K in loans

[pebkac]

well this is true but to the tune of 42k on 47k over 1-4 yrs??

my total amount of my loans was about 36k, with about 8k i couldn't consolidate bc they were private loans. so i had 28k consolidated with panhandle plains, and on a 20 yr note i started off paying $86/mo, and every 2 years it goes up like $8 (i think, haven't looked in a while). and the rate is something like 2.75%

6.x% on student loans is insane... i think i got a better deal than that on my damn truck

After re-reading her post, it makes sense. I think she's saying that by the time she's done paying it off, the interest paid will be 42k.

And to answer your question, yes, if you make higher payments on the loan than the minimum amount due, it will lower the amount of interest you have to pay.

[Mommy]

ummm of course thats what she meant. what the fuck else would she mean?

[impala454]

After re-reading her post, it makes sense. I think she's saying that by the time she's done paying it off, the interest paid will be 42k.

but what she said as a payoff amount was not right. your payoff amount is what you'd pay if you wanted to pay off the entire loan. she made it sound like they'd stack all the interest on her if she did want to pay it off, and that's horribly wrong if it's true. i guess it's more likely she mis-read. your payoff amount should be pretty close to the principle.

[pebkac]

but what she said as a payoff amount was not right. your payoff amount is what you'd pay if you wanted to pay off the entire loan. she made it sound like they'd stack all the interest on her if she did want to pay it off, and that's horribly wrong if it's true. i guess it's more likely she mis-read. your payoff amount should be pretty close to the principle.

Eh, I think she probably knew what she was saying, she just used the wrong terminology.

ummm of course thats what she meant. what the fuck else would she mean?

When you talk about a payoff on a loan, you generally mean that you intend to pay it off today in cash.