This article is for these applying your education loan fees approach and then have High Lakes since your education loan servicer. Our student loan believe pros have experienced many people maybe not that have its money securely designated during the Great Ponds. For this reason, i’ve build this walk through to help you build yes your maximize your savings.
“I called Great Lakes again and they are supposed to be reapplying the payments, again. The last person I talked to said the person I spoke with last week registered everything “right”, the payments remained perhaps not applied accurately.”
I listen up each and every day from FitBUX Members…. therefore, what could well be great about with High Ponds if they clutter up money?
Loan properties make mistakes. not, according to our experience, High Lakes’ customer service is actually 1 of the best in the fresh new student loan business.
2 Key elements To make Prepayments
Let’s take a step back. When you are make prepayments to save money and pay off your student loans faster, there are dos key elements to make sure you are doing so in an optimal fashion:
Earliest, how the prepayments try assigned. The different student loan servicers sometimes get this wrong. If they do, it will cost you thousands of dollars over the life of your loans. Read this article for more information on how to pay off student loans.
Next, understanding how High Ponds enforce the new prepayment. Great Lakes does this differently than all the other loan servicers so knowing it is important.
Prepayment Allowance
- The overall required payment is the payment you have to make each month. That required payment is split into two parts: an interest amount and a principal amount. The interest amount covers how much you owe in interest each month. The principal amount is applied to your loan principal and reduces your overall balance. Check out this video on how a loan works.
You can’t like how requisite payment was assigned round the your own additional financing, we.age. you can not apply your necessary payment with the highest-desire mortgage basic.
- A prepayment is an amount you elect to pay above your required monthly payment. The point of the prepayment is to reduce how much you owe at a faster pace. Therefore, you pay less interest in the long-run.
Detail by detail Analogy
I am going to direct you how High Lakes applies costs playing with an example. Once the an advance notice, you may need to reread this from time to time on account of the new math. You really need to sign up for an item of report and you can extract a period of time line….
Assumptions:
– You have multiple loans all online payday CT at different interest rates.
– Your overall called for monthly payment is actually $1,100.
– Of the $1,100 monthly payment, $900 is actually applied to reduce dominating while $200 will be used to pay interest. This $900 number is the one you want to remember.
– Great Lakes has a “billing cycle.” This billing cycle ends the day your required payment is due and starts over the next day. For this example, let’s assume that this new asking stage ends up the newest 29 th of each few days.
– You pay your required monthly payment on the 30 th of each month, with the vehicle-pay feature Great Lakes offers.
– Your 2nd percentage are February 29 th .
– You decide we wish to create a great prepayment of $300 on the February 20th and you want to apply it to your highest interest rate loan first, as this will save you the most money.