Payments On Interest Only loans...

When making your monthly payments on interest only loans, i know you are only obligated to pay the interest, but we all try and pay more each month. Do you pay the fully amoritzed amount to cover both interest and principal or do you just put a small amt towards principle each month? Is there a formula to figure out how much should be applies towards principal?

Re: Payments On Interest Only loans...

We just add an extra 1k each month and indicate that the 1k should go to the principal

Re: Payments On Interest Only loans...

We dont pay additional principal every month. Instead, we make large lump sum payments when we get things like our bonus....

Re: Payments On Interest Only loans...

Thanks girls...i guess we have options. I just want to try and pay something towards principal each year.

Re: Payments On Interest Only loans...

if you search for a mortgage calculator on google - there is one that shows the amount of interest break down and principal. Interest will go down after that (since you are paying down the principal and therefore less interest is charged) - so make sure you keep paying the same total sum (more and more will go to the principal then too)

Re: Payments On Interest Only loans...

Good point, thanks!