Better to Pay Interest or Principle While Enrolled?

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
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tmon
Posts: 1242
Joined: Sun Apr 17, 2011 10:52 pm

Better to Pay Interest or Principle While Enrolled?

Postby tmon » Mon Nov 05, 2012 12:46 pm

I have some unexpected money available and want to put it toward my loans. I'm also pretty bad at math. I'm only taking out unsubsidized direct loans (no gradplus). Would a few thousand dollars be better put toward my loan principle or interest? I'm assuming principle, especially as a 1L, because less interest will accrue going forward, but, like I said, math is not my strong suit and I figured I'd check myself. I've heard that putting extra money toward loans sometimes results in the lender holding that for future payments unless you specifically say to put it toward the principle. Is that an issue with direct loans?

Thanks!

usfvictor
Posts: 153
Joined: Wed Nov 10, 2010 11:51 am

Re: Better to Pay Interest or Principle While Enrolled?

Postby usfvictor » Mon Nov 05, 2012 12:49 pm

Principle

edit: also tell your loan provider to put the amount toward principle, alot of them will just count it as future general payments and split between P&I.




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