If you have a student loan, there are 2 main things you need to know about it:
1. Principal Amount
This is the amount you borrowed for your education, your car, your home, etc. This number will (hopefully!) be decreased by the payments you make on it and will increase due to…
2. Interest
This is how you’re charged for the money you’ve borrowed. In other words, interest is a fee paid for the use of another party’s money. You borrowed their money to pay for your education, and now you’re being charged accordingly.
Interest is likely being added to your principal daily, monthly or annually and can easily increase your principal by an astronomical amount.
If you don’t know your principal amount, you don’t know how much you owe. And if you don’t know your interest rate, you don’t know the rate at which you’re being charged for borrowing all that money.
If you have a student loan but don’t know your principal and your interest rate, you should really look into that soon. Paying off your student loans quickly and effectively will be tough if you don’t know much about them.
Other posts you might like:
- How I Paid Off $60k of Student Loan Debt in 4.5 Years: A Timeline
- 17 Creative Strategies to Pay Off Your Debt
- 3 Major Life Changes I Made on My Debt Free Journey
- 6 Debt Freedom Influencers You Should Already Be Following
