This information is for these applying their student loan repayment approach and then have Higher Ponds since your education loan servicer. Our very own education loan planning benefits have seen huge numbers of people maybe not that have its repayments properly designated on Great Ponds. For this reason, i have make it walk through to build sure you optimize your discounts.

“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 inserted everything “right”, the costs were still perhaps not applied precisely.”

I listen up each day out of FitBUX Players…. very, exactly what could be good about with Higher Ponds whenever they clutter up money?

Mortgage features get some things wrong. not, according to our very own feel, High Lakes’ customer service try hands down the finest in the newest education loan industry.

2 Important factors In making Prepayments

Let’s take a step back. When you are make prepayments to save money and pay off your student loans faster, there are 2 key elements to make sure you are doing so in an optimal fashion:

Very first, how your prepayments try designated. 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, focusing on how Great Ponds applies the fresh new prepayment. Great Lakes does this differently than all the other loan servicers so knowing it is important.

Prepayment Allocation

• The overall needed payment per month 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 simply can’t like how the expected payment is actually allocated round the their some other fund, we.e. you simply superior site for international students can’t pertain your called for payment per month towards the higher-notice loan very first.

• Good 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.

Outlined Analogy

I am going to assist you how Higher Lakes can be applied money having fun with an example. Just like the an advance notice, you may have to reread which a few times on account of new mathematics. You should sign up for an item of papers and you can draw out a period range….

Assumptions:

– You have multiple loans all at different interest rates.
– Your complete expected payment per month is $1,a hundred.
– Of the $1,100 monthly payment, $900 try used on eradicate prominent 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 the asking cycle ends the fresh new 29 th of each month.
– You pay your required monthly payment on the 30 th of each month, making use of the vehicle-spend feature Great Lakes offers.
– Your second payment is February 29 th .
– You decide you want to create an effective prepayment regarding $300 to your March twentieth and you want to apply it to your highest interest rate loan first, as this will save you the most money.