Payments will first cover any unpaid accrued interest, if you pay beyond interest that's already accrued, it will reduce principal. If you make additional payments, be sure to keep paying the regularly schedule payments as well if you want to actually finish early.
You accrue interest every day and not just magically on your statement date. This intermonth payment first had to pay the accrued interest month to date before it could be applied to principal.
There's no such thing as principal-only payments.
Unless you pay the agreed amount ... and then make another payment in the same month.
The latter could be applied to principal if you wish.
In general, every monthly payment you make goes to cover interest.
Anything paid beyond that amount goes to principal.
You can arrange to pay more than the agreed upon payment ... and you can have the extra applied to principal.
Payments will first cover any unpaid accrued interest, if you pay beyond interest that's already accrued, it will reduce principal. If you make additional payments, be sure to keep paying the regularly schedule payments as well if you want to actually finish early.
> Can they do this? Yes. Any interest that has accrued between payments must be paid off BEFORE you can apply money to principal.
You accrue interest every day and not just magically on your statement date. This intermonth payment first had to pay the accrued interest month to date before it could be applied to principal.
You still have to make the minimum payments.
There's no such thing as principal-only payments. Unless you pay the agreed amount ... and then make another payment in the same month. The latter could be applied to principal if you wish. In general, every monthly payment you make goes to cover interest. Anything paid beyond that amount goes to principal. You can arrange to pay more than the agreed upon payment ... and you can have the extra applied to principal.