Are my SL payments appropriate

**BuckyBadger** · 05-01-2012, 01:10 PM

Maybe I'm missing something here, but don't you need to know the term of the loan to know how much is supposed to go to principal and how much to interest?

If I plug it into an amortization table and use a 50 year term, which is the max it'll let me use, it's still showing $5.54 paid toward principal.

Something doesn't seem right.

**J.Apple902** · 05-01-2012, 01:29 PM

Originally posted by BuckyBadger View Post

Maybe I'm missing something here, but don't you need to know the term of the loan to know how much is supposed to go to principal and how much to interest?

If I plug it into an amortization table and use a 50 year term, which is the max it'll let me use, it's still showing $5.54 paid toward principal.

Something doesn't seem right.

Not 50 yr term. Use the payments I have given you to determine term, i.e. 233 payment periods (20 yrs) for loan 1 and 231 payment periods for loan 2 (again almost 20 yrs).

If I run an amortization simulator in this fashion for loan 1 is see that my first payment should be something like:

for loan 1:
the correct distribution of interest/principle at $29.54 / $45.59

but for loan 2:
I see $61.58 for interest and $35.95 for principle.

I'm getting screwed here because the higher interest rate loan payments are going almost exclusively towards interest not principle. I don't see how I'll ever be able to pay this thing off if the distribution of my payments exist in this fashion.

Thanks in advance for any help.

**ecoadapt** · 05-01-2012, 03:15 PM

Are you sure you've checked the interest of those two loans. They might have different interest. It will really hard for you to pay this thing off!

**cooliemae** · 05-01-2012, 08:32 PM

Apple,

Are you are on a graduated payment plan? My wife is and when she first started paying, the principal only went down about $20 a month. The idea of a graduated plan is to have smaller payment to start with, but those payments increase on a set schedule with the assumption that you will be making more money and able to afford the payments.

If you can afford extra payments, I would certainly encourage you to make them especially on the 5% loan even an extra $50 a month can go a long way to bending the curve.

**jpg7n16** · 05-01-2012, 09:13 PM

Originally posted by J.Apple902 View Post

I'm getting screwed here because the higher interest rate loan payments are going almost exclusively towards interest not principle. I don't see how I'll ever be able to pay this thing off if the distribution of my payments exist in this fashion.

Thanks in advance for any help.

You're not getting screwed, it's just a very long time before you pay it off. If you want to keep the 5% loan, there's no rush.

If you don't want to keep it, just pay extra.

10 years: $156.75
5 years: $278.89
3 years: $442.92

You're not screwed at all, you've in fact got a pretty good deal. No big requirement on your cashflow, and the ability to pay more if you want without penalty.

**ktmarvels** · 05-02-2012, 03:11 AM

Loan 2 does look a little screwy. However, I'm not sure because your SL situation appears to be very different than mine (I have higher balances, higher interest rate, shorter repayment and thus, higher payment).

However some things to do regarding this.
1. Verify your interest rate
2. Have you had any late or missing payments? My student loans require that payments be made in the following order: fees, interest, principle. A couple of late payments would mean there is more interest to be paid off rather than principal.
3. Verify the amount you have to owe each month. If for some reason you are supposed to actually pay $110 this would affect the amount going to the principal.
4. Put every extra dime you have (or quarter, or dollar) toward paying that loan off, particularly if it is the highest interest rate debt you have- (no credit card debt).
5. Don't worry, loans are set up that you pay the most in interest right away, as the balance gets smaller and you continue to make the same payment amount you'll see the amount going to the principal getting higher and higher.

**J.Apple902** · 05-02-2012, 05:30 AM

Originally posted by ktmarvels View Post

Loan 2 does look a little screwy. However, I'm not sure because your SL situation appears to be very different than mine (I have higher balances, higher interest rate, shorter repayment and thus, higher payment).

However some things to do regarding this.
1. Verify your interest rate
2. Have you had any late or missing payments? My student loans require that payments be made in the following order: fees, interest, principle. A couple of late payments would mean there is more interest to be paid off rather than principal.
3. Verify the amount you have to owe each month. If for some reason you are supposed to actually pay $110 this would affect the amount going to the principal.
4. Put every extra dime you have (or quarter, or dollar) toward paying that loan off, particularly if it is the highest interest rate debt you have- (no credit card debt).
5. Don't worry, loans are set up that you pay the most in interest right away, as the balance gets smaller and you continue to make the same payment amount you'll see the amount going to the principal getting higher and higher.

1. I have been on the phone with Chase regarding the interest rate so I believe it's confirmed. However something is a little weird still. I was able to get a 0.25% interest rate reduction on both of these loans, yet the new interest rate will never be reflected on my online account. Someone via Chase messages told me this. Sounds weird right?

2. This was my very first payment and I will never miss one. I am signed up for automatic payments.

3. Yes I have been on the phone with them.

4. I have a financial plan.

5. Thanks!

**J.Apple902** · 05-02-2012, 05:31 AM

The only problem is that I don't have $29k in debt, it's more like $65k :/ , more student loans come due later this year.

boooo

Are my SL payments appropriate