I see this from time to time on social media about people saying they graduated college a long time ago with X-amount of school loans, and they’ve been paying it but then still owe more then the original loan amount. How is this even possible? Don’t all loans calculate the monthly bill for interests and enough principle for it to not increase?
In: 2
Well… No. Predatory loans often come with terms where the minimum payment is insufficient to cover interest and thus the debt keeps growing.
Credit cards are the most common form of this but also things like payday loans and, yes, some student loans.
After all, they keep paying so where’s the loss for the lender?
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