um. are you paying everything this year such you have extra to put to the loan. because like if you are taking loans and paying it. it would be a wash.
E.g., a person might be able to pay 4k and not 30k for tuition. And, with that 4k, they want to pay off the 2k in gained interest payments before they start accruing interest on a 32k chunk of money.
So by those numbers, if you will owe another 30k next year, and this time you have 6k to pay, you should put your 6k fully towards the 30k of new loan, and nothing towards the 26k you owe in loans. That’s why they lock you out from paying the loan, they’re forcing you to make the mathematically optimal choice, unless you happened. To be on the verge of paying 100% of your tuition each year.
Ah, I see. I misunderstood their position. Yes, you should ask for a smaller principal loan, instead of just paying down the interest of a larger loan.
A smaller principal is always best, but sometimes that is best served by paying down interest.
um. are you paying everything this year such you have extra to put to the loan. because like if you are taking loans and paying it. it would be a wash.
The interest, not the full loan amount.
E.g., a person might be able to pay 4k and not 30k for tuition. And, with that 4k, they want to pay off the 2k in gained interest payments before they start accruing interest on a 32k chunk of money.
So by those numbers, if you will owe another 30k next year, and this time you have 6k to pay, you should put your 6k fully towards the 30k of new loan, and nothing towards the 26k you owe in loans. That’s why they lock you out from paying the loan, they’re forcing you to make the mathematically optimal choice, unless you happened. To be on the verge of paying 100% of your tuition each year.
Why not just borrow less this year and have a lower principal?
Ah, I see. I misunderstood their position. Yes, you should ask for a smaller principal loan, instead of just paying down the interest of a larger loan.
A smaller principal is always best, but sometimes that is best served by paying down interest.