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What are benefits for paying off double the student loan monthly?
Say I am supposed to pay $50 a month for a student loan and instead of $50 I am paying $100. Will that reduce my interest rate? Are there any other benefits?
3 Answers
- Anonymous1 decade agoFavorite Answer
You will pay it off quicker. By being in good standing, and even paying off double, that will pay off more of the principle balance, and therefore will reduce your interest rate over time. Also, depending on who you borrowed with, you may qualify for benefits like reduced rates or percentage of loan reduced because you are paying off more than you need to. On my brothers loans he was able to reduce his interest rate 2% after 3 years of paying on time (in .25% increments on each loan he was paying on).
Good Luck!
- 1 decade ago
Your rate will stay the same but the amount of interest that you end up paying will be less over the term of the loan. If you owe $2000 and you pay off $1000 instead of $500 then the interest rate would be calculated off of $1000 instead of $1500 making the accrued interest much less.