Question

Looking for some advice.  I just got off the phone with student loan officer, and since I recently submitted my income repayment documents, I was approved for $0 monthly payment.Looking for some advice. I just got off the phone with student loan officer, and since I recently submitted my income repayment documents, I was approved for $0 monthly payment. They said I am not in deferment, but I literally owe nothing each month (with interest still accruing). I still have a goal of paying down my loans and my car ($10, 000 worth). Should I work toward paying down my car now that loans are not asking for a payment, or continue with my budget payment toward my loan of $206 monthly toward interest? Has anyone had this happen before?  

Answer 1

Is the interest on your car higher than your student loans? Honestly it would be a dream to have a paid off car.  

Comments

@entophyte well if you don’t pay on the loans just because they aren’t requiring you too they won’t go away. Maybe allocate a doable budget and over the pay car and and put a small payment towards the loans. Once the car is paid off direct the entire budget you set for yourself to the loans.  

Answer 2

If you’re not paying anything towards your student loans, but interest still accrues, that is deferment. I had my loans deferred before, and while it helped me out at the the time, the interest was a bitch. I ended up owing more than I took out. Call them back and ask for a lower payment. Just pay anything.  

Comments

@geoff what she said. My deferment killed me and I feel like I’ve been paying for forever with hardly any decrease in principal. The lender that has my student loans made it sound all gravy but it’s not. They just make more money off you that way

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@rosannrosanna Feel you! Sucks because interest accrues DAILY on student loans  

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@geoff it does suck! The day we pay these student loans off will be a good one!  

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@entophyte yes! Pay whatever you can. Even if your payment is $0, pay something. Even the interest.  

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Its not deferment it’s the income based repayment plan. If you have low income your payment is $0 but if you pass the threshold in income you payment can jump significantly and you are collecting interest the entire time. If you truly can’t afford a payment this can help for a time otherwise I would just stay on a standard plan.  

Answer 3

Still pay toward student loans or you will be accruing interest on interest.