Student Loan Questions
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From: ɯooɹpǝq ɹnoʎ
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If it shows up on your credit report, it WILL effect your credit. It will probably also effect your mothers' as well.
Just make sure you get it consolidated into a Fixed rate. That's the most important thing, and try to negotiate a lower rate. The worst they can do is tell you no.
Just make sure you get it consolidated into a Fixed rate. That's the most important thing, and try to negotiate a lower rate. The worst they can do is tell you no.
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I have a somewhat related question (having student loans and a mortgage of my own).
Is it possible for the lender to impose a restriction on WHERE your extra payments go towards? Say my monthly payment for a loan is $500 and I choose to pay $650. Is it legal for them to RESTRICT that the $150 extra MUST go towards the interest on the loan? Thus allowing them a sure-fire way to get ALL of their originally intended profits?
..just curious. wink1.gif
Is it possible for the lender to impose a restriction on WHERE your extra payments go towards? Say my monthly payment for a loan is $500 and I choose to pay $650. Is it legal for them to RESTRICT that the $150 extra MUST go towards the interest on the loan? Thus allowing them a sure-fire way to get ALL of their originally intended profits?
..just curious. wink1.gif
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From: ɯooɹpǝq ɹnoʎ
Vehicle: ǝdnoɔ sısǝuǝƃ
I don't believe they can do that, BUT, I've always been told to protect yourself by sending two checks (one for payment, one for principal, and write in the Memo field "Apply to Principal"
However, I make all my payments online, and I monitor the account to make sure they applied it towards principal. On my home loan, it actually has a place for "Additional payments towards principal" and one of my two student loans has the same thing, a place designated for "Payments to Principal"
Whether it's legal or not, always protect yourself.
-----e-d-i-t-----
Also, I don't think they can charge you interest in advance.
Example:
Payment of $150 due on 2/1/08.
Payment of $150 MADE on 2/1/08.
Extra Payment of $50 MADE on 2/3/08.
They may be able to apply the $50 extra payment to the interest accrued between 2/1/08 and 2/3/08 (2 days worth of interest) and the rest applied towards principal. I have one loan that does that, which makes sense, but that means that the next payment will only include interest from 2/4 - 3/1 (since I've already paid the interest on 2/2 and 2/3). Make sense? That would mean you'd pay $1.50 in interest accrued on 2/2 and 2/3 and then $48.50 towards Principal.
The thing you would need to be weary of is the company taking your principal payments and using them as "early" payments (saying that you're sending next month's payment early, and applying it as a regular payment - rather than applying it towards principal). Again, I don't think that's legal, but it's something to keep an eye out for. Just because it's illegal doesn't mean they won't do it.
However, I make all my payments online, and I monitor the account to make sure they applied it towards principal. On my home loan, it actually has a place for "Additional payments towards principal" and one of my two student loans has the same thing, a place designated for "Payments to Principal"
Whether it's legal or not, always protect yourself.
-----e-d-i-t-----
Also, I don't think they can charge you interest in advance.
Example:
Payment of $150 due on 2/1/08.
Payment of $150 MADE on 2/1/08.
Extra Payment of $50 MADE on 2/3/08.
They may be able to apply the $50 extra payment to the interest accrued between 2/1/08 and 2/3/08 (2 days worth of interest) and the rest applied towards principal. I have one loan that does that, which makes sense, but that means that the next payment will only include interest from 2/4 - 3/1 (since I've already paid the interest on 2/2 and 2/3). Make sense? That would mean you'd pay $1.50 in interest accrued on 2/2 and 2/3 and then $48.50 towards Principal.
The thing you would need to be weary of is the company taking your principal payments and using them as "early" payments (saying that you're sending next month's payment early, and applying it as a regular payment - rather than applying it towards principal). Again, I don't think that's legal, but it's something to keep an eye out for. Just because it's illegal doesn't mean they won't do it.
