If I can pay off most of my principle balance, will monthly charges based on interest rate be the same?

Question

I am a student who took out a 20000 Private loan. I now realize I no longer need it but I barely miss the refund period. Now I owe about 21,000. Now the interest rate makes it so that If I were to keep this balance, I owe 300 something dollars each month or then it will be capitalized. If I paid most of it and only had a balance of 1700 left, will I still owe 300 something dollars every month or will it be lowered significantly?

The reason for the question is based on my lack of understanding interest rates.

Answer 1

Paying extra on the principal will significantly lower you interest payment. Think 10% of 20,000 is a lot more than 10% on 200. Keep paying on that principal.

Answer 2

It all depends on the terms of the loan.

Paying the $19,300 now will at least make it so that you won't have to pay the interest on that amount monthly. You may have to pay a penalty for paying off early. Best discuss this with your loan agent.

Even if they make you pay the $300 after lowering the debt, it'll pay off the loan in a year. (not counting penalties)

Answer 3

since you say a private loan and i do not know what it entails and how it was written but if the loan was writ en so it is amortized and everything is in order and there are no prepayment penalties then absolutely it is worth paying down the principle good luck only a lawyer can help you because none of us out here can see how the loan was written i hopes this helps have a great day

Answer 4

Hi my friend, first of all you need to carefully read the contract you signed and from there you should know and understand the terms stated and if it was by contract what will happen if you void the contract. I recomment strongly to reviev what you signed because a lot of persons accept thew loans withour really understanding the terms and conditions on the loan. Good luck.