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The RePAYE can be kept by you Interest Subsidy if You Prepay Your Loan?

The RePAYE can be kept by you Interest Subsidy if You Prepay Your Loan?

My Prepayment Test

Now all of this information would not fall into line in what other people from the WCI Forum did actually think about prepaying loans under RePAYE. Therefore, we place prepaying to your test:

  • Present Principal: $149,734
  • Interest at Starting of Test: $1,864
  • Daily Interest Accrual at 5.5%: $22.56
  • Monthly Interest Accrual at 5.5per cent: $676.88 (1 month)
  • Monthly Interest Accrual at 2.75percent: $338.44 (thirty days)

Centered on my day-to-day interest accrual and also the information supplied by the FedLoan Servicing worker, I paid $30 (to ensure I had been over the interest accrual on any given day) at three various points within the loan cycle that is monthly.

We paid $30 on a random time to see if the complete $30 would get towards the key, if $22 would get to the interest from that time and $8 would go directly to the principal, or if all $30 would get toward the attention.

All of it went toward the attention.

We paid $30 in the time that the attention subsidy ended up being awarded, the day that is first of thirty days. The logic right here had been then perhaps my account would be at $0 of interest accrued that month and all of my payment would go towards the principal if FedLoan Servicing was applying the interest subsidy the first of every month.

All of it went towards the attention

I paid $30 regarding the time just after my real scheduled re re payment date that is due. Keep in mind that my required monthly payments every month are $0, therefore my way of thinking had been that possibly FedLoan Servicing would process my $0 re re payment and that is the date once the month-to-month accrual of interest reset to $0 enabling me personally to spend from the principal.

All of it went towards the attention.

Just How Did These Prepayments Affect My 50% Interest Subsidy?

Well on Day 1 of the test I’d $149,734 of Principal and $1,864 of great interest.