I have a stupid loan question

I am super confused. If paying it earlier wouldn't have solved it and the principal was still growing, then the only possible problem left is that the payment was not high enough to even cover the interest. The thought of an interest only payment scares the sh!t out of me. At that point you're just lighting money on fire and gaining no ground. Unless Im missing some intricacy of a student loan, the only way principal can grow is if unpaid interest accrues to the principal or if you borrow more money and I assumed you were not voluntarily adding to the principal.

 
Last edited by a moderator:
The principal wasn't growing. My payment was going through later than when I thought it was. So on my account the principal looked bigger than the information I had kept track of, but my info was wrong:

Let's say I have a loan for $1000 with 10% interest.

And let's say I have:

Principal = $1000

Interest = $20

If I schedule a payment of $30 for April 3, I expect that my principal on April 3 will be $990.

Well, Nelnet was applying it a day later, every time. They would apply my payment on April 4. So, while I thought I was paying $20 in interest and $10 in principal, I was actually paying $20.27 toward interest and $9.73 toward principal, because the payment didn't get applied until 1 more day worth of interest (27 cents) was added. Basically my bookkeeping was wrong because I didn't realize they weren't applying it on the day I had my payment scheduled. I'm assuming what Nelnet is doing is totally normal, but I didn't realize what was happening.

 
Last edited by a moderator:
So the difference was being caused by a day's worth of interest. I'd say that makes me 100% right but I'll settle for 90% since the difference was not that the payment was being applied late but rather just a day later than you thought it was.

 
Pretty important to call the loan company for any payment than the standard one. They're are too many ways for things to get screwed up, or misunderstood.

 
Back
Top