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
User error, people dont check the interest rate and adjust their payment accordingly or make minimum payments. They are the same thing other than the school loan doesn’t have collateral (which is one of the many reasons they cost more), if you default on your mortgage they will take your house they’re out very little or they profit. If you stop paying your school loans they dont have anything to take and they are SOL.
If you don’t insure that your payments are larger than your interest rates your loan just increases and you give the bank money for no reason.
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