Michael's Loan Repayment

[American Eagle Michael]

Here's the slice of financial reality that I was waiting to hear about from Great Lakes Educational Loan Services:

Principal balance of amount borrowed: $48,907.86
Unpaid interest accumulated: $ 2,784.20

Total principle amount to be repaid: $51,692.06

Interest to be paid during repayment period: $43,895.28

Total amount that will be repaid: $95,587.34

Interest rate: 9.270% (currently)
Number of payments: 179
Amount of payment: $534.01

While I was in training and instructing I paid off the interest that accrued each month in an attempt to keep the overall amount down to a minimum. Those payments were between $250 to $300 per month depending on how much funds had been released to me. Once I started with American Eagle I got a little lazy with that, so that's where the interest accrued is from.

In the coming years I plan to send a little extra each month towards paying down the principle. Less principle means less interest that can be calculated on top of it. That's the plan anyway.

Regards,

Michael

My interest rate is calculated as follows:

"The Variable Rate on this loan may increase or decrease and is equal to the 'Current Index' plus a margin as defined below."

The 'Current Index' is the three-month London Interbank Offered Rate (LIBOR) published in the "Money Rates" section of the Wall Street Journal on the 20th day of the month preceding the applicable "Change Date" (e.g., December, March, June and September).

The Variable Rate is equal to the 'Current Index' plus a margin of 3.85% per annum. The Variable Rate will change quarterly on the first day of each January, April, July and October.

At the time of me signing for the loan that was the deal they were offering.