ST Alpha - "Or could be that the $327k was the initial loan amount, and they made no repayments for like 10-15 years." (Reading a Post)

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In response to "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. " by mafic

Or could be that the $327k was the initial loan amount, and they made no repayments for like 10-15 years.

Posted by mafic Dec 2 '21, 05:36

At 5% it could easily get over $500k in that time. There’s a lot of ambiguous terminology in those screenshots.

Responses:

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

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Or could be that the $327k was the initial loan amount, and they made no repayments for like 10-15 years.

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