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 loan payments are current and 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. You can choose whether or not to advance your next payment due date:
  1. Choose to advance your next payment due date by leaving the box on the front of your payment coupon unchecked. 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.
  2. Apply your overpayment to your loan in repayment without advancing your due date by checking the box on the front of your payment coupon. Interest will continue to accrue and you will pay less interest over the life of the loan.
  3. View Example

Multiple Loans Examples

These examples assume two loans in repayment with payments that are current, and no outstanding late fees or past due balances. These examples are based on two loans for the same product type with the same due date.

When you have multiple loans with the same due dates, your payment is applied to your loans in the order of their loan number (i.e. loan 21, then loan 22), in the following order:

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

If you are making your full minimum monthly payment, 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?

If you are paying less than your Minimum Payment Due:

  • You may incur a late fee, if applicable
  • Your payment will be applied to your loans in order of their loan number
  • 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 whether or not to advance your next payment due date by:
  1. Leaving the box on the front of your payment coupon unchecked. This will apply your overpayment proportionately to each of your loans and will advance your next payment due date if the amount of the overpayment is large enough to cover the amount of your next minimum payment.
  2. Checking the box on the front of your payment coupon. This will apply your overpayment proportionately to the principal balance(s) of each of your loans and will not advance your due date.
  • You can choose how to allocate your overpayment among loans by:
  1. Checking the box on the front of your payment coupon and providing instructions on the back of your payment coupon.
  2. Not providing instructions on the back of your payment coupon, which results in your overpayment being applied proportionately to the principal balance(s) of each of your loans.
  3. View Example