Amortization schedule?

Student Loans
1

My two parent’s loans, which Aidvantage services, were repaid in October. The first is $22041 at 6.83%, while the second is $22,286 at 5.05%. I pay them $520.61 per month for ten years ($276.36 for one and $244.25 for the other). They are set up for automatic payments. According to my payment, which was issued on January 19, $296.01 went towards principal and $224.60 went towards interest. Based on the interest rates, is this math accurate? It does not line up with the calculators I have used. Provided with service

I used to believe that the payment was fixed, but now I am unsure if I am making an additional upfront payment. I sent them an email asking for an amortization timetable, but I doubt I will hear back from them at all.

I am grateful for your insights.

2

You’re right to be curious about the breakdown of your parents’ loan payments. The numbers you provided don’t perfectly align with the traditional way interest is calculated on a loan.
Breakdown of what might be happening:

Possible Scenarios:

  1. Graduated Repayment Plan:
  • Explanation: Your parents might be on a graduated repayment plan, which starts with lower payments that gradually increase over time.
  • Action: Check Aidvantage’s website or contact them to confirm the specific plan in place.
  1. Accrued Interest:
  • Explanation: If your parents’ loans went into repayment after a deferment or forbearance period, accrued interest might be getting paid off initially. This interest is added to the principal balance before monthly payments start.
  1. Rounding:
  • Explanation: Loan servicers sometimes round numbers for easier monthly statements, which might explain slight discrepancies between your calculations and the provided breakdown.

What to Do:

  1. Amortization Schedule:
  • Action: While Aidvantage might not respond to your email request readily, try calling their customer service line to request an amortization schedule. This schedule details the breakdown of payments into principal and interest over the loan term.
  1. Online Tools:
  • Action: Check Aidvantage’s website for tools to view your loan details and payment history.
  1. Repayment Estimator:
  • Action: Use online loan repayment calculators to estimate monthly payments based on the loan amount, interest rate, and repayment term. This can help compare with actual payments and identify any discrepancies.
  • Resource: NerdWallet Loan Calculator

Understanding Your Options:

  1. Fixed vs. Graduated Payments:
  • Action: Confirm the type of repayment plan (fixed or graduated) your parents are on. Fixed payments have a constant monthly amount, while graduated payments start lower and increase over time.
  1. Extra Payments:
  • Observation: Since the total payment ($520.61) is slightly above the sum of the principal amounts ($276.36 + $244.25 = $520.61), any extra amount might be applied directly towards the principal, helping to pay off the loan faster.