What to Know About Principal-Only Student Loan Payments – US News & World Report
- January 7, 2021
- By: Greenpath Financial Wellness
GreenPath shares with U.S. News and World Report Student Loan Ranger some considerations about paying principal only on student loan balances.
For those managing student loan debt and considering payment options, there’s a lot to know about making principal-only student loan payments.
While paying down student loan balances is a priority for those balancing student loan debt against other financial obligations, it can be challenging to identify the most effective strategies.
Paying principal only on student loans is a way you can free up funds to apply to other financial goals – such as saving up for a down payment on a house, a car loan or other financial goals.
What to Consider
In the article, we describe the full considerations of principal-only payment options.
Making extra payments helps reduce the principal, and accelerates your ability to pay off the balance. Since the amount of interest you pay is based on your principal, you will pay less interest and enjoy significant cost savings.
This approach will improve your credit profile and credit history – which helps lower the cost of borrowing in other areas such as securing a car loan.
Although it can be stressful managing student loan debt, working with a nonprofit counselor can be helpful.
As a free service, GreenPath’s experts can walk you through your options when managing your student loan debt. 91% of people served by GreenPath feel better prepared to handle their finances. Together let’s make a plan for managing your full financial picture to support your goals.