Pay extra every month on school loans?

[edro]

I hear that each creditor is different in how they do this.

If my monthly payment to Direct Loans (school loans) is $75, and I pay $100... does the $25 go directly to the principle? Or does it just come off next month's bill? What happens if I pay the $75, then a day later send another payment of $25? Would it do the same thing?

Thanks!

 

[ggavinmoss]

Confirm with your lender, but it works this way for me.

edit
Actually, it applies whatever payment to the acrued interest first, then to the principle. If no interest has acrued since the last payment, it all goes to principle.

-geoff

 

[theNEOone]

i consolidated (won't start paying till dec) and i asked about this because i was concerned about prepayment penalty. i was informed that there was no penalty, and any additional money (over the regular monthly payment) is applied to the remaining principle.


=|

 

[Anubis]

Originally posted by: theNEOone
i consolidated (won't start paying till dec) and i asked about this because i was concerned about prepayment penalty. i was informed that there was no penalty, and any additional money (over the regular monthly payment) is applied to the remaining principle.


=|

this is also how mine are

 

[edro]

Aight, so there is basically no reason to do the accelerated payment method? Just do the extended one, and pay like double the billed amount? Sounds good to me.

Thanks!