How Payments Are Applied

Making on-time payments is important. Review the examples below to better understand how your payments are applied and how your payments may affect your overall cost of borrowing. To get more details about each example, click the "View example" link.

The examples provided here are for loans serviced by Discover and are meant only as a guide. We do not guarantee they will apply to your specific circumstances. If you have questions about your loans, please call us at 1-800-STUDENT anytime 24/7. For loans originated by Discover, please visit Great Lakes to see how your payments are applied.

Single Loan Examples

These examples assume loans are in normal repayment (e.g. no loans in deferment or forbearance), with payments that are current, and that there are no outstanding late fees or past due balances.

We apply payments in the following order:

  1. Fees, if applicable
  2. Accrued interest, due through the day before your payment is received
  3. Current principal loan balance
Single Loan Example

If you are making your minimum payment due, your payment will be applied according to the above order and your account will be current until your next payment due date.

What if I pay less than the minimum payment?

Because you are paying less than your Minimum Payment Due:

  • You may incur a late fee, if applicable
  • The amount left unpaid will be added to your next month's minimum payment
  • View Example

If you are having difficulty making your monthly payments, we have options to help temporarily manage your student loan payments. Please call our Repayment Assistance Department at 1-877-321-5017 to determine if you qualify.

What if I pay more than the minimum payment?

If you are paying more than your Minimum Payment Due:

  • Your payment will pay your current statement in full
  • Your overpayment will be applied to your principal balance, which may include capitalized interest. You can choose whether or not to advance your next payment due date.
  1. If you take no action, your overpayment will be applied to your loan in repayment without advancing your due date. Interest will continue to accrue and you may pay less interest over the life of the loan.
  2. To choose to advance your next payment due date, check the box online or on the front and back of your payment coupon to apply your overpayment to advance your payment due date. This will advance your payment due date if the amount of the overpayment is large enough to cover the amount of the next payment. Interest will continue to accrue and you may pay more interest over the life of the loan.
  3. View Example

Multiple Loans Examples

These examples assume two loans in normal repayment (e.g. no loans in deferment or forbearance) with payments that are current, and no outstanding late fees or past due balances. These loans are based on the same product type with the same due date.

When you have multiple loans with the same due date, and you are making your full minimum monthly payment, your payment will be applied in the following order and your account will be current until your next payment due date:

  1. Fees, if applicable
  2. Accrued interest
  3. Current principal loan balance
Multiple Loan Example

What if I pay less than the minimum payment?

If you are paying less than your Minimum Payment Due:

  • You may incur a late fee, if applicable
  • Your payment will be applied first to the loan with the smallest minimum payment due.
  • The amount left unpaid will be added to your next month's minimum payment *
  • View Example

*NOTE: On your next payment due date, the payment you make will go first to pay off what was left unpaid from your previous bill. The remainder of your payment will then be applied as noted above.

If you are having difficulty making your monthly payments, we have options to help temporarily manage your student loan payments. Please call our Repayment Assistance Department at 1-877-321-5017 to determine if you qualify.

What if I pay more than the minimum payment?

If you are paying more than your Minimum Payment Due:

  • Your payment will pay your current statement in full
  • Your overpayment will be applied to your principal balance. You can choose how to allocate your overpayment between loans and whether or not to advance your next payment due date by either:
  1. Leaving the box online or on the front of your payment coupon unchecked. This will apply your overpayment to your loan(s) in repayment with the highest interest rate (or if all rates are equal, to the loan with the highest balance) and will not advance your payment due date. Interest will continue to accrue and you may pay less interest over the life of the loan.
  2. Checking the box on the front of your payment coupon or using the online option. This will allow you to select a different overpayment allocation. You can choose to apply the overpayment to a specific loan number or to the loan with the highest balance. You may also choose to apply the overpayment to advance your next payment due date, in which case the overpayment will be applied to advance your payment due date for all loans on the statement for the number of months your overpayment covers. Interest will continue to accrue and you may pay more interest over the life of the loan.
  3. View Example