school loan - The Finance Forums: Financial planning, debt help, loans, mortgages, retirement and 401k, investment, and general finance discussion forums

mogles · #1 (**permalink**) 10-13-2007, 06:38 PM

Might be a dumb question but I think I am getting ripped off.
1999 got a few loans throughout the 4 years. All in the amount if $23,000
Interest rates where between 4.23 and 5.01. I am looking at the payment history and with every month since 2001 of $150 I still have $19000 to pay. What the F*$c is going on? With such a low interest rate I can't imagine having this much. Please help.

Dru · #2 (**permalink**) 10-13-2007, 11:57 PM

Even at 5% you have about $95 every month going to interest. That doesn't include any interest that may have accrued while you were in school and not making payments. If you want to see progress, you need to be making larger payments. If you have other credit debt at higher rates, tackle the other debt first.

Estreetloans · #3 (**permalink**) 10-15-2007, 10:38 PM

Quote:

Originally Posted by mogles

Might be a dumb question but I think I am getting ripped off.
1999 got a few loans throughout the 4 years. All in the amount if $23,000
Interest rates where between 4.23 and 5.01. I am looking at the payment history and with every month since 2001 of $150 I still have $19000 to pay. What the F*$c is going on? With such a low interest rate I can't imagine having this much. Please help.

Unfortunately what happens with student loans is that interest is calculated on an ever accruing basis. So even if you owed 23,000, the interest starts to build up and when you make a payment, it usually is large enough to pay the interest for that period and maybe a little additional principal. Also, if you opted not to pay the interest while you were in school then you are paying interest on interest. Are these federal loans or private? That makes a big difference in regards to terms and rates and also when the interest charges are applied.

1wealthbuilder · #4 (**permalink**) 10-18-2007, 03:37 AM

You may also want to try offering a payout and see what they say.

The effect on your credit history would be negligible and a small price to pay for a couple of years and a couple grand.

Hermes · #5 (**permalink**) 10-20-2007, 03:28 PM

I agree with DRU, if you really want to pay-off your debt you need to increase your payments.

Offering a pay-out may be an option. You can try it, you have nothing to loose bt only to gain.

Most people make the mistake of only paying minimum payments on any debt which is barely enought to keep pace with interest charged while the debt itsself is barely lowered.

That's how financial institutions earn money on loans they make.