Hi everyone,
I need some advice on effectively paying off my student loan. I’m used to standard loan amortization schedules, but my student loan calculations are confusing.
Here are the details:
- Loan Origination: 08/25/2023
- Loan Amount: $18,500
- Interest Rate: 7.25%
- Payment Application Order: Interest then Principal
- Loan Status: Deferment
I paid $500 on 12/21/2023. $433.60 went to interest and $66.40 to principal. It seems the $433.60 was accumulated interest since August, but I’m unsure how to predict future payments.
The website shows $18.30 unpaid interest. Does interest accrue daily? If I pay $100 today, will it reduce the principal by $100 or $81.70 after covering unpaid interest?
Does anyone have a spreadsheet to map payments for these loans? Would refinancing to a standard loan with principal and interest payments be better? The current calculations don’t match what I’m used to, so any help would be appreciated.
Thanks!