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IndiraMehta

Can I sue? Payments sent to Interest, not principal

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I have paid, consistently, $40 per week to rid myself of student loans.

 

Now, my MONTHLY payment amount is $39.90. What I have ACTUALLY been paying per month is $160. And YET, on my last student loan statement, of that $160, only $16.55 went to pay off the principal balance.

 

WTF?!

 

I'm going back in time, and based on these payments, I should have paid off at least $1100 (rounding) in principal, and a few hundred in interest. This has not been the case. Last year's $1465 in total payments against a $5500 student loan as resulted in only a reduction of $551 in principal. (Keep in mind, my actual annual obligation is like $478.80 if I paid the minimum as agreed)

 

What the hell is going on? This is a federal direct loan. Anyone with insight, please help.

 

**** ALSO, I include a statement with EVERY money order I send to direct each payment to PRINCIPAL where interest payments have been satisfied)

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Quick sidenote: When going over the payments, I noted a few things .... 1)I began to make $25/mo payments 9 months before the loan officially entered "repayment". While interest did accrue, I think this would have covered a consequential amount of interest early on. 2) Interest currently accrues at about $1 per day. This is why I'm really upset that so little of my $160/mo payments recently have mostly gone straight to interest. I've paid enough "interest" under this scheme for 7 years of having this student loan... even though I have only had this loan for 5 years. No late payments, thankfully. Current balance $5264

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Was your loan past due at all when you started making the payments?  If it was, your payments could be going to back interest.  

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