DH's loan just came out of forebearance and over 1000 in interest accrued during that time.
When we make the payment this month will it all go towards part of that interest? Or will it just be like normal and only part of the payment goes towards interest?
Full Version: Interest and Forebearance Question
QUOTE(ammorgan @ May 2 2007, 08:52 PM) 
DH's loan just came out of forebearance and over 1000 in interest accrued during that time.
When we make the payment this month will it all go towards part of that interest? Or will it just be like normal and only part of the payment goes towards interest?
When we make the payment this month will it all go towards part of that interest? Or will it just be like normal and only part of the payment goes towards interest?
Payments will go to pay the interest first, unless the interest capitalized before then.
In most loan cases, student loan or not, payment always goes to interest first, principal second.
Just got a letter from them today says if we don't pay the interest now it will be capitalized.
QUOTE(ammorgan @ May 3 2007, 12:02 AM)
Just got a letter from them today says if we don't pay the interest now it will be capitalized.
In most cases interest capitalizes quarterly during the forbearance and at the end of the forbearance regardless of the terms of the promissory note.
QUOTE(Nitro @ May 19 2007, 02:54 AM)
QUOTE(ammorgan @ May 3 2007, 12:02 AM)
Just got a letter from them today says if we don't pay the interest now it will be capitalized.
In most cases interest capitalizes quarterly during the forbearance and at the end of the forbearance regardless of the terms of the promissory note.
That's old-school. No longer legal. It can now usually be capitalized only at the end of a deferment or forbearance. See the common manual for the specifics.
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