ST Alpha - "A loan payment is generally applied in the following order: fees, interest, principal. -- (edited)" (Reading a Post)

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In response to "What, so if you borrow with a 20 year term you pay 20 years of interest before any principal? That’s weird. -- nm" by mafic

A loan payment is generally applied in the following order: fees, interest, principal. -- (edited)

Posted by znufrii Dec 2 '21, 06:03

If you don’t pay enough to cover the outstanding fees and interest, nothing gets applied to principal. The only way this happens in practice though is if the loan is not in good standing.

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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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A loan payment is generally applied in the following order: fees, interest, principal. -- (edited)

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