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    Am I Missing Something?

    Just checked my FAFSA page and the % it’s showing I’ve paid off has slightly stunned me.

    At the time of writing this:
    Original Loan Total: $41,000
    Paid: $25,068.22
    Principal Balance Left: $19,912.08
    Outstanding Interest: $5.47
    Paid off 28%.

    This number feels off? Am I crazy or am I missing something? I think I’m thrown off because I’ve been ensuring that my extra payments go towards the principal so this percentage feels really off when I look at how much I have left vs what I’ve paid. Am I just not accounting for interest?

    Candidly entirety possible that my math skills are just really lacking looking at this – but hey it’s been a long week.

    Am I Missing Something?
    byu/teabunnyx inStudentLoans



    Posted by teabunnyx

    2 Comments

    1. felinelawspecialist on

      What is your interest rate?

      Your total cost of the loan = principal + ([principal x interest rate] x loan term in years).

      If $25,068.22 = 28%, then the numbers would look something like:

      Total cost = A

      Interest rate = B

      A(.28) = $25,068.22

      A = $25,068.22/.28

      A = $89,529.40

      So:

      $89,529.40 = $41,000 + ([$41,000 x B] x 20)

      $89,529.40 – $41,000 =$48,529.40

      $48,529.40 = ($41,000 x B) x 20

      $48,529.40/20=$2,426.47

      $2,426.47 = $41,000 x B

      $2,426.47/41,000=0.06

      So your interest rate is 6%? If your interest rate is 6%, yes, your numbers make sense.

      Edit: the other part of this is the amortization schedule of the loan. The amortization means you pay more interest earlier in the repayment schedule. I’m not nearly smart enough to provide a succinct explanation for how that all works but they work it out so your monthly payments are consistent while still accounting for the interest.

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