I noticed on a financial payment plan that it shows a minimum amount for the payment owed on the student loan for about $400 per month, and then under that, it has a line stating there's a "Minimum Monthly Payment" of $50.00.
What is the minimum payment, and how does it work?
Thanks
2007-02-20 06:36:59 · 10 answers · asked by Ariel G 1 in Education & Reference ➔ Financial Aid
Minimum payment varies depeding on how much has been borrowed and the interest rate signed for the loan. The minimum monthly payment is basically the interest charged for one month plus some amount on the principal which allows a payoff in certain periods. A simple example. Suppose you borrowed $1200 at 12% interest, and the payoff period is one year. So each month you would pay approximately $100 in principal and $10 in interest for a monthly minimum payment of $110.
Beware of fake "help" offers to refinance loans that may give you a lower monthly payment, but signficantly increase the interest rate and the length of time it takes to pay off such loans. And also watch out for "adjustable" rates which means your minimum payment can increase when rates adjust higher.
2007-02-20 06:47:58 · answer #1 · answered by justdennis 4 · 0⤊ 0⤋
The minimum payment is the least amount you can get away with paying and keep the account current and not past due. However, never pay only the minimum payment if you can possibly help it. The interest will keep piling up and it will take forever to pay off the balance. You want to make steady payments, though, because long-term accounts reflect well on your credit report and make it easier to get loans in the future. If the minimum is $50, you should pay at least 10% more than that per month to help cover accrued interest.
2007-02-20 06:55:35 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The minimum payment is what they require you to pay per month. You can pay more if you want. You can not pay less. If you pay less they can put an extra charge on your account for a late payment. Each month that you do not pay the loan off they can/will include an interest charge for you using their money.
In some cases you have a loan that is same as cash if paid off in a certain amount of months. Some student loans are like that.
So you have to pay the 50 per month but can pay more.
Hope this helps
2007-02-20 06:42:49 · answer #3 · answered by Anonymous · 0⤊ 0⤋
What's your student loan amount for? If it's only like 10,000 then it's probably 50$. If it's a couple hundred thousand then it's 400$. I'd call and ask to be sure though, that doesn't seem right that they listed 2 minimum payment amounts.
2007-02-20 08:43:08 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Minimum payment means the least amount you can pay is $50 a month...just get your doctor to write you a letter of disability and have the whole loan dropped
2007-02-20 06:39:57 · answer #5 · answered by Anonymous · 0⤊ 0⤋
you pay the minimum amount every month until the loan is paid off. this will take care of the principal amount($400) and interest. if you have any extra money, pay on the loan over the minimum and that amount will go towards just the principal and in the long run, will pay less interest
2007-02-20 06:45:44 · answer #6 · answered by Jen 4 · 0⤊ 0⤋
Pay the higher payment or as much as you can afford. I Owe a ridiculous amount of money. I'm sure that by the time I am done paying it off, I will of payed it off twice.
Good luck with it. Student loans suck.
2007-02-20 08:07:17 · answer #7 · answered by Anonymous · 0⤊ 0⤋
The $50 figure means that if your minimum monthyl amount when the loan goes into repayment is less than $50, you will have to pay at least $50 each month.
2007-02-20 06:40:31 · answer #8 · answered by Anonymous · 0⤊ 0⤋
the minium payment is the least you should pay
2007-02-20 06:40:10 · answer #9 · answered by charles h 4 · 0⤊ 0⤋
pay it, student loans are the only thing that don't go away, even if you declair bankrupcy
2007-02-20 06:41:10 · answer #10 · answered by Jason 2 · 0⤊ 0⤋