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Intern making loan payments through private lender. Help!

Home Personal Finance and Budgeting Intern making loan payments through private lender. Help!

  • Avatar osteoson56 
    Participant
    Status: Student
    Posts: 21
    Joined: 12/04/2018

    Hello,

     

    Briefly, I refinanced my med school loans at 4.5% and am making payments during residency because we’re living off my wife’s income and want to attack aggressively. Is it smart to make all of my payments go toward the principle of the loan, or should I pay the interest every month and let the extra go toward the principle? Thank you!

     

     

    #231283 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 1860
    Joined: 02/11/2019

    How can you not pay the interest?  Usually the first thing that comes off is the interest due.  If you pay extra then all the extra goes to principle.

    “Never let your sense of morals prevent you from doing what is right.”

    #231486 Reply
    Liked by CordMcNally
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2846
    Joined: 01/03/2017

    Your regular monthly payments will go towards the interest and principle. Make sure that any and all of your extra payments go towards the principle.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #231491 Reply
    Avatar osteoson56 
    Participant
    Status: Student
    Posts: 21
    Joined: 12/04/2018

    Your regular monthly payments will go towards the interest and principle. Make sure that any and all of your extra payments go towards the principle.

    Click to expand…

    They allow me to make payments strictly toward the principle if I choose to — which lowers the amount that’s growing in interest on my loans each month.

    How can you not pay the interest?  Usually the first thing that comes off is the interest due.  If you pay extra then all the extra goes to principle.

    Click to expand…

    There is an option to set my monthly payments to go directly to principle. That was my overall principle is decreasing with each payment and the money accruing in interest is lower than if I were to just make interest payments. The interest that does accrue is then added to the principle after residency but my buddy and I figures overall it may save me a few thousand dollars over the next 3 years so I took the option.

    #231821 Reply

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