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Student loan question: Is it possible to pay just the principal first?

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tjdee Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:46 PM
Original message
Student loan question: Is it possible to pay just the principal first?
My mother is asking me stupid questions.
Like, can she pay just the principal on a PLUS/Stafford loan?
Or pay the principal first? I guess she's trying to cut down on the amount of interest she'll have to pay (I asked if that's what she was trying to do and she got all snippy, and said "just, can I pay the principal or not?").

Can she get a lawyer to.... pay just the principal?

She asked the loan people, who said no...(duh)...her computer is down so she wants me to google for 'the answer'. I did, am finding nothing, she told me to try other queries. :eyes:

My mother is the *most* annoying person to talk about money with.
:grr:
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Deja Q Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:48 PM
Response to Original message
1. Of course not.
That would reduce interest payments which means our poor sweet innocent banks who are doing us all a big favor wouldn't get their profits and might go under.
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tjdee Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:52 PM
Response to Reply #1
6. You can pay interest only, right?
Maybe I'll suggest that.

I don't think she understands that part of the loan concept is that the bank/fed government expects to get what you borrowed *plus* some.
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Nicholas D Wolfwood Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:48 PM
Response to Original message
2. Not unless you pay the whole thing upfront.
I mean, no one would give loans if they never got their money.

I can commisserate. I hate having to jump through hoops just to fulfill retarded requests that have no chance of being fulfilled in the first place.
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tjdee Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:54 PM
Response to Reply #2
7. I did find out they forgive loans after 25 years!
If you're paying the minimum, that is...and if it's a federal loan...then you still have to pay taxes on what you're forgiven.

Too bad we all can't be Kenneth Lay.
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shoelace414 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:48 PM
Response to Original message
3. that doesn't make sense..
you would pay the principal except no matter what you do, the interest is calculated on the account balance, so it would calc interest on interest
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tjdee Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:50 PM
Response to Reply #3
4. I know, I *told* her that.
Of course it doesn't make sense. But my mother expects it to.
:eyes:
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hfojvt Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 04:30 PM
Response to Reply #3
13. exactly, unpaid interest becomes principle
but many loans do not have penalties if you pay ahead. My 5/1 ARM is not going to have a balloon payment. It should be paid off well before November of next year.
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Sandpiper Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:51 PM
Response to Original message
5. There is no penalty for early repayment
Edited on Wed Jun-01-05 03:51 PM by Sandpiper
The best way to cut down on interest payed is to pay in excess of your monthly payment, e.g., if you double your monthly payment, you will cut the repayment period in half.
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fertilizeonarbusto Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:55 PM
Response to Reply #5
8. Very true
And if you know how to finesse it, you can even get some interest deducted-I had about $6,000 in interest taken off because I did balloon payments for a year. It was a hungry year, but I'm glad I did it.
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AllegroRondo Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:55 PM
Response to Reply #5
9. its faster than that
because of the way interest is compounded, and depending on your interest rate. the higher your rate, the faster you pay off the loan by doubling your payment.
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Sandpiper Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:58 PM
Response to Reply #9
12. You're right
Math was never my best subject.

;-)
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tjdee Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:55 PM
Response to Reply #5
10. She can't afford that, LOL.
Thank you for the tip (I have student loans of my own and didn't think of that!)....she won't be pleased with that answer, LOL.
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leftofthedial Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-01-05 03:57 PM
Response to Original message
11. with some loans, once you pay luigi the monthly nut
Edited on Wed Jun-01-05 03:57 PM by leftofthedial
(partly principal, mostly interest), he won't break your knees. Then you can pay an additional amount directly against your principal balance.
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Juice45 Donating Member (102 posts) Send PM | Profile | Ignore Wed Jun-01-05 04:35 PM
Response to Original message
14. My friend who graduated 1+ years ago
Edited on Wed Jun-01-05 04:35 PM by Juice45
said he consolidated his loans at a fixed rate of 1.9%. I thought that was insane since that is less than inflation. IF you can find a rate that low, that would be the way to go. I get start paying mine back very soon as well :(
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