Understanding Your Loan Payment Options

Whether you're making your regular monthly payment or paying extra toward your loan, knowing how payments are applied can help you reach your financial goals. 

Standard Payment

Your standard payment is the total amount you must pay in each cycle; how payments are calculated and when they are due can vary per contract, but most payments are due monthly. Standard payments are usually applied in the following order:

• Any interest that has accrued since your last payment
• Any applicable fees, if owed
• The remaining amount toward your loan principal

Making at least the standard payment by the due date helps keep your account in good standing.

Minimum Payment

Payments can be made in partial amounts. When the minimum payment is displayed the same as the standard payment, this means there are no partial amounts that have been credited; the full payment is due.

When the minimum payment displays less than the standard, partial amounts have been credited and only the minimum amount must be paid by the due date to fulfill the requirement.

In Online Banking, either Minimum Payment or Standard Payment can be selected to apply the payment towards your current due date. 

How Daily Interest Works

Many GreenState Credit Union loans, excluding 1st Mortgages and Credit Cards, are daily simple interest loans. This means that interest on your loan accrues daily, and interest is calculated each day based on your outstanding principal balance.

Because interest builds every day, if you wait longer between payments, more interest will accrue before your next payment is applied.

For this reason, making payments on or before your due date — and making additional principal payments when possible — can help reduce the total interest you pay over the life of your loan and ensure you pay off the loan as planned.

Paying More Than the Minimum

You can always pay more than your minimum payment; most auto, personal, and home equity loans do not have an early payoff penalty. Extra payments can help reduce the amount you owe and may lower the total interest you pay over the life of your loan.

If extra payments are applied, these amounts may count towards the next payment cycle. Only the minimum payment is due on each loan due date, but loans must still be paid as scheduled. Extra payments are intended to reduce principal/interest paid over time, but do not override the standard payment cycle.

Principal-Only Payments

You can apply principal-only payments to select loan types. A principal-only payment is an additional payment made directly toward your loan's principal balance. 

It's important to know that principal-only payments do not change or advance your loan's due date. You are still responsible for making your regularly scheduled monthly payment by its due date.

In Online Banking, select the Principal-Only Payment option to apply your payment from your GreenState account. If you are making a payment from an external account, you will need to transfer funds from the external account to your GreenState savings or checking first and then initiate the payment from your GreenState account to your loan.