COVID-19 pandemic has suspended student loan interest.
So I don’t know if you heard, but I was reading USA Today about the Corona Virus and I read that 45 (Trump) is allowing everyone with suspend their student loan payments for 60 days without interest. WHAT!?!?!?! Yea, that’s what I said. If you want to read more about this, check it out here>> Trump: Student loan borrowers can suspend payments for 60 days without interest
What’s the benefit’s to this:
- If you’re looking to pay off your loan sooner, this will help you tremendously.
Before the suspension, your student loan payment was being applied to the principal and the interest, but mostly the interest, so it takes you so much longer to pay off your actual balance.
Let me show you an example:
Here is a payment of $537.22 I made on 3/29/2019. Only $16.28 went to my actual balance and the $520.94 was sent to interest.Ummmm yea, crazy right? Now had the interest suspension been in place for this payment, the entire $537.22 would have went to my balance and I’d be that much closer to paying it off.
- You can use the payments for something else.
Every company isn’t waiving payments. So if you absolutely have to, you can use these payments to go towards something you really have to pay now or even catch up on a payment.
I would recommend continuing to pay your student loans and get the balance down as far as you can before the interest starts kicking back in. However, I know everyone’s situation may not warrant that, and that’s okay. I need you to do what’s best for you and your situation. I’m just here to give you the options.
- You can use the payments to build your emergency fund or start your side hustle.
If you don’t have to catch up on any bills, you can use this money to get started on your emergency fund or even side hustle. There are no penalties to not paying your loans, so now is the best time.
Now before you just stop paying, be sure to call your loan company and ask how you can get the payments postponed. No where in the article did it say that this was automatic. So please do not stop paying your loan until you have confirmation from your loan company that you do not have to pay.