Loan payments are primarily going towards principle balance

Since November, when I started using Nelnet as my loan servicer, the principal amount has accounted for the majority of my auto debit payments rather than interest. I have a graded payback plan in place.

The payments for the last three months are:

I: $9.25 P: $92.29 I: $.54 P: $92.03 I: $.80 P: $83.58 I: $9.25

Interest accumulated to date is $352.32.

Is this typical?

2 Likes

Yes, it can be typical for the principal portion of your payments to be higher, especially if you’re on a graded repayment plan where payments increase over time. In the early stages, a larger portion of your payment might go towards the principal, while later payments focus more on interest. However, if you feel something is off, contacting Nelnet for clarification is a good idea and ensuring everything is being applied correctly.

2 Likes

It’s actually pretty common for more of your payment to go towards the principal over time, especially if you’re on a graded payback plan. So, yeah, seeing your principal part growing and interest part shrinking is normal. Just keep an eye on it, and it should keep shifting more towards the principal as you go along.

2 Likes

Despite being on a graded repayment plan, the majority of their payments are allocated to the principal balance rather than interest. This is unusual as typically, interest is the primary focus in early repayment stages.

1 Like

Without any balances or interest rates, it’s difficult to say. Generally, basic interest with daily accrual is what you’re looking at, but without knowing your loan principal balance and interest rate, we really can’t check the interest accrual.

1 Like

@Meech I appreciate your response.

They’ve provided me with three loans.

Loan 1: $3579 principle, 3.6% interest rate, and $109 interest balance

Loan 2: $179 is the interest balance and the principle amount is $5567 with a 3.5% interest rate.

Loan 3: $2043 in principle, 3.5% interest rate, and $66 interest balance

Perhaps it’s because my next scheduled payment date is 2027 and I put down additional funds in 2018 and 2019?