How can people make payments for 20 years on school loans and barely make a dent in the principal? How are those loans different than a mortgage?
In: Economics
I don’t think it was mentioned here, but in student loans there are certain events that can trigger capitalization of interest. This means that accrued interest is added to the principle of the loan and now accrues interest. Then you wind up paying interest on your interest. Awesome, right?
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