Use this calculator to estimate your monthly student loan interest payments and how much they could save you in the long run. There is never any penalty for prepaying a student loan, and you should consider making interest-only payments any time your loans are accruing interest and payments aren't required. This can include:. While you, or your child for parent PLUS loans, are enrolled in school. During the six-month student loan grace period. During these periods, making extra payments directly on your principal balance can help minimize the amount you repay overall.
You'll make interest-only payments directly with your student loan servicer. Visit its website or contact your servicer to confirm how much your interest-only payments should be and to set up these payments.
Keep in mind that no portion of the payment can be treated as excess until the delinquency and the current monthly payment have been satisfied.
If you have multiple loans in an account and the amount of interest owed is more than the amount of the payment, the payment will be applied proportionately based on the amount of accrued interest on each loan.
Payments must be applied first to interest, then to principal. This means all outstanding interest must be paid before any portion of your payment can be applied to principal.
Below are common situations in which all, or most, of your payments will be applied to interest. In the early years of repayment, more of your payment will go to pay interest because the payments are lower than they will be later on. Most, if not all, of that payment will be used to pay the accrued interest. And in some cases, it may not cover all of the accrued interest due. Because you have lower than normal payments, more, or all, of the payment will be used to pay accrued interest.
You can make recurring student loan payments through Auto Pay , or make a one-time payment using Pay Online. Both options are easily available after you log in to your account. Other ways to pay include our mobile app , by phone, or by mail with a check. Have a social account and have a question? Send us a message. We're here to help. You can chat with us a few ways:. You can also log in or visit our Contact Us page to contact a representative.
Great Lakes is a Servicer to Federal Student Aid You have a network of support to help you succeed with your federal student loan repayment. How Payments Are Applied. Tweet on Twitter. Share on Facebook. We automatically apply excess amounts to: Accrued interest Principal of the loan with the highest interest rate. Note: If you're in school, grace, or deferment, after outstanding interest for all loans has been paid, it will be applied to the unsubsidized loan with the highest interest rate.
What is an Account? If you have four loans of the same type, you'll have a single account with four loans and one payment. Remember, the interest rates can be different. Or, if you have four loans of two different types, you'll have two accounts with loans in each. An account can also have a single loan in it. Your Situation Show information about situation: I want to make a payment while I'm still in school, in my grace period, in a deferment, or in forbearance.
Auto Pay or Pay Online When you make the payment on mygreatlakes. Many lenders and servicers have online portals where you can make monthly payments. These tend to have options for setting up monthly autopay, making a minimum payment and paying the statement balance. You might also be able to set up standing instructions to pay a larger monthly payment and send the remainder of your payment towards the principal.
When you select this amount, you can then choose if this payment counts towards your monthly payment or an extra payment. Then you can select where that money gets applied, such as to the interest only, the interest and principal, or just the principal. Some lenders might not have these options. Depending on your loan servicer, you might need to call to make a prepayment.
Ask for a confirmation email or number so that you have a record of your request. Be as clear as possible with your lender about how you want your money handled.
Set up email alerts for any change to your account, such as when a payment was made or you have a due date coming up. Dori Zinn has been a personal finance journalist for more than a decade. She loves helping people learn about money, specializing in topics like investing, real estate, borrowing money and financial literacy.
Most recently, she was a staff writer and spokesperson at NerdWallet, where she wrote "Ask Brianna," a financial advice column syndicated by the Associated Press.
Select Region. United States. United Kingdom. Dori Zinn, Brianna McGurran. Contributor, Editor. Principal Payments It is important to pay off both the interest and principal on student loans in your name. Federal direct subsidized loans: These loans are structured to help undergraduate students with significant financial need. Interest accrued on the loan while you are in college will be paid for by the Department of Education.
You will receive a six-month grace period after graduation to let you search for a job. If you received a subsidized loan between and , accrued interest during your six-month grace period will be added to your principal if you do not pay it in monthly installments. Subsidized loans have a fixed interest rate. You can adjust your payment plan in several ways after you graduate, based on your income.
Federal direct unsubsidized loans: Like subsidized loans, these loans have a fixed interest rate and a six-month grace period after you graduate. Unlike subsidized loans, the principal will begin accruing interest as soon as the loan has been disbursed. That means the principal on your loan will be higher than what you borrowed when you graduate, and more interest will accrue on the loan faster.
Unlike both subsidized and unsubsidized loans, there is no post-graduation grace period, so you must begin making monthly payments on this loan or ask for a deferment. As with an unsubsidized loan, if you defer your loan, the interest will be added to the principal, and you will end up paying much more than you borrowed. Interest begins accruing after the loan is disbursed, and you will be expected to make monthly payments on at least the interest while you are in school, or you will need to ask for a deferment.
When you defer your loans, the interest will continue to accrue, and this will be capitalized to your principal. If you defer regular student loan payments, you may be expected to pay interest each month, but not the principal. To help you pay down your loan faster, here are some recommendations: Start paying sooner than required.
If you can make monthly interest payments while you are in school, do so. If you are financially able, pay some of the interest and principal during the six-month grace period, as well. Getting a head start and making consistent, extra payments means you will pay less interest and pay down your principal faster.
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