Total paid over the past decade: $40k
Principal paid: $4k
Interest paid: $36k
I might as well taken out a payday loan for my education.
Link to proof/image in comments
How is this legal lending practices? I’ve been paying for 12 years and only 10% has gone towards principal.
byu/rharrow inStudentLoans
Posted by rharrow
13 Comments
[Current balance with amounts paid](https://imgur.com/a/AGro5aR)
You opted for a payment plan that barely covers your interest accrual. Perfectly legal.
What is your monthly payment? Are you on IDR?
You’ve left off important information. What is your interest rate? How much are you paying each month?
If you would have made additional payments towards principal this would have been drastically different. Wait till you see the dent you made in your mortgage too.
You have obviously never needed to take out a payday loan if you’re posting this nonsense.
You are on a payment plan that isn’t keeping up with your interest. It’s as mundane as that and you’re acting like it’s a scandal.
You might have been paying only a little more than what covers your interest each month, so you’ve only been incrementally chipping away at your principal. Never believe what the website tells you is your monthly payment. I accrue around $60 in interest alone each month on my loan, yet Mohela tells me my monthly payment is $45. If I paid them $45 each month, that wouldn’t even cover the interest, and the principal would increase.
It’s legal. I absolutely loathe the way they’re set-up, though. My mortgage and car loans clearly show monthly interest and allow principal only payments where 100% goes to the principal.
I absolutely loathe the daily accrued interest and inability to make principal only payments on student loans. It is difficult to see how much interest accrues monthly, so you can stay ahead of it.
The one downside to IDR plans.
Math… It was your decision to pay almost only interest. For the most part student loans are usually 10% or less on interest. You basically decided to only pay like $20 extra month on top of your student loans. So for example say $25,000 at 10% interest is like $208 in interest a month. If you only pay $230 a month then of course you’re never going to pay off the loan. Payday loans are like 100% plus interest minimum so you should probably learn more about loans and interest rates before you take on more debt in the future
This is what happens when you select an income based plan.
Just because you don’t understand basic math and yet decided to take out loans for a college degree that doesn’t allow you to compute basic interest on a loan doesn’t mean there was anything illegal that happened
You lost a decade and $36k figuring out your balance wasn’t going down. But here’s your opportunity to change something so you don’t spend the next decade doing the same thing. Not much you can do about the past.