Thanks for writing.
We'd love to help you out, but we're going to need a little more information. If you'd like us to drill a little deeper, we need: your original balance; the interest rate (or fee formula); fees paid; whether the feeds were added to the principal or deducted from it; number of months the loan was in an in-school deferment or grace period; the number of payments made so far; the repayment plan; the monthly payment; and the current loan balance.
You might also enter your original loan stats into this calculator
and see if your current loan balance roughly matches the payment schedule.
We had Mark Kantrowitz of FinAid.org run some numbers for us, just to give you a rough idea of how it might work: On a 20-year, $90,000 loan with 10% interest, the monthly payment would be $868.52. Of the first payment, only $118.52 would go to principal. At the end of the third year the balance would be $85,048.02, down about $5,000 from the original loan amount. However, if you had a 5% fee (Education Finance Partners usually charges fees of up to 5%) added to your principal instead of deducted from the disbursement check, that would have increased the loan to $94,737 and the remaining balance at month 36 would be $89,524. So a lot depends on the details, Kantrowitz explained.
Keep in mind that, for the first few years, a very small portion of your monthly payment goes towards reducing principal. "Generally, this is the same sort of situation one sees with a mortgage, where, at the beginning of the repayment history, very little of the monthly payment (typically less than 15% of the monthly payment) goes to reduce the principal, yielding what feels like a slow repayment trajectory," Kantrowitz said.
I hope this was clear. Feel free to write us back for clarification!
