ST Alpha - "The second guy seems to have paid both the interest and the principal. It says he paid $238k towards his principal yet it says it's only gone down" (Reading a Post)

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In response to "They’re barely (or not) paying only the interest. -- nm" by Will Hunting

The second guy seems to have paid both the interest and the principal. It says he paid $238k towards his principal yet it says it's only gone down

Posted by Krusty (aka Krustylu) Dec 2 '21, 05:26

$100k in total. His is the most confusing to me as it seems to show he has paid off a lot of the principal.

Responses:

It’s probably showing the amount remaining according to some kind of repayment schedule. Like if he pays over 20 years, that’s what’s left. - mafic Dec 2, 05:30 16
- Or could be that the $327k was the initial loan amount, and they made no repayments for like 10-15 years. - mafic Dec 2, 05:36 10
  - I think they were paying aggressively. 220k principal and 80 k interest. Now project at 110k and 110k. Unless there are hidden fees, penalties, etc -- nm - VMan Dec 2, 05:38 9
    - If he was making only partial payments and getting hit with fees every month, I could see something like this happening. -- nm - znufrii Dec 2, 05:46 2
      - I guess it could. Like I said the numbers seem wonky with how much principal vs interest they've paid. And then the balance. -- nm - VMan Dec 2, 05:49 1
        
        They probably paid down a lot at the beginning but now for whatever reason aren’t paying enough to cover fees and interest so it keeps ballooning. -- nm* - znufrii Dec 2, 05:52
    - That’s my read as well, but it’s vague enough that I have questions. -- nm - mafic Dec 2, 05:41 5
      - Yeah. I mean typically (say mortgage) your paying all the interest up front. This seems wonky. -- nm - VMan Dec 2, 05:43 4
        
        What, so if you borrow with a 20 year term you pay 20 years of interest before any principal? That’s weird. -- nm - mafic Dec 2, 06:00 3
        
        A loan payment is generally applied in the following order: fees, interest, principal. -- (edited) - znufrii Dec 2, 06:03 2
        
        Yeah, just making sure it wasn’t some weird American thing. Like your interest is in imperial or something. -- nm - mafic Dec 2, 06:11 1
        
        No, the weird American thing here is that it is almost impossible to have student loans discharged in bankruptcy. -- nm - znufrii Dec 2, 06:14
- That's not at all how it reads to me. It says it's a summary of his payments and it uses the word paid which makes me think he paid them that amount. - Krusty Dec 2, 05:34 3
  - The first photo says “this is not your payback amount” which makes me think it’s calculating based on a repayment rate. - mafic Dec 2, 05:40 2
    - The first and second photo are not the same person. I'm just talking about the second photo/loan numbers. It doesn't make sense to me. -- (edited) - Krusty Dec 2, 06:02
    - It’s the current statement balance of the loan. The payoff amount would include any additional accrued interest since the most recent statement. -- (edited) - znufrii Dec 2, 05:42
- I read it similarly. Like a credit card statement. If you pay minimum amounts it will take 75 years and 4 months to clear. -- nm - VMan Dec 2, 05:31
Right. That doesn’t make any sense at all. -- nm - spamlet Dec 2, 05:29

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The second guy seems to have paid both the interest and the principal. It says he paid $238k towards his principal yet it says it's only gone down

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