Applying extra payments to principal (MOHELA)
Hi,
I have a little over $3000 left in my MOHELA federal government student loans (I am VERY lucky, but I also get paid very little, so it's difficult to pay off), and I'm trying to pay it off as soon as possible, minimizing the amount of interest that is getting paid and instead having any extra payment I'm making go to principal. I have turned off the "pay-ahead" feature, and somehow still don't have a payment due until August.
I'm making extra payments, trying to get everything extra to go to principal, and it still will take out money to go to interest, and I guess I'm confused. When I've called, they say that interest has to get paid first and once the interest is paid off, then all the rest will go to the principal. But, I'm confused about this because even in my extra payments, a range of between $10-$30 of each payment goes towards interest, and I don't know why.
Can anyone explain this to me and how to avoid it? I know you may be thinking "$10-$30 isn't a big deal, and with the amount you owe, it's not a big deal, so just don't worry about it", but I'm living VERY tightly trying to pay all of this off by the end of July, and seriously, every $ counts where I'm at financially, so I'm annoyed that money is still going to interest even though I'm making multiple payments in one month.
Last I called MOHELA, they said that once I pay off the required $19 a month that accrues in interest, then my extra payment will all go towards the principal, but my account history is saying otherwise.