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How is my student loan payment applied to my account?

Generally, payments go first to fees that are owed (late fees, phone payment fees, etc.), then to interest (including past due interest), then to the principal balance of your loan.

If you plan to pay more than your minimum monthly payment, you can instruct your lender or servicer to apply the excess payment directly to the principal balance. This will lower the total cost of your loan and get you out of debt faster.

Warning: Sometimes, when you pay more than your monthly payment, your lender or servicer will “credit” the amount against a future payment rather than apply it toward your principal balance. This is called “paid ahead status” and is most common with federal loans; however, you can request that your servicer not put your loans in paid ahead status. For example, say you have a loan with a monthly payment of $115, and in January you decide to pay $300. If your lender is crediting your payments forward, in February you would get a statement that showed no payment due; in March, you would get your next actual bill, for $65. This allows you to skip a payment in February, but you won’t get ahead in paying off your loan. Removing paid ahead status and making a principal-only payment may help you pay off your loan quicker.