How do I pay off large chunks of my school loan and avoid any interest trickery?
Call your lender and have them apply that to your principal loan balance. They are cheating you if they aren’t following your directions. Each payment has a hefty chunk dedicated to interest. If you send them a whole other payment amount to apply toward principal, that will save you paying interest on that amount for the life of the loan and that can really add up. Go to www.dinkytown.net to see their loan payoff calculators. There are over 250 free financial calculators on that site and it is worth it to play around with different scenarios to see how to get more bang for your buck. When you first start making accelerated payments toward prinicpal it doesn’t look like much, but it really will save you a lot. I have been making accelerated payments on my mortgage and I will save over $37,000 of interest on the loan and get it paid off 21 years early.
