As Low As One Percent

Manage Cash Flow

Having up to four payment options allows you to manage your cash flow and overall financial picture on a monthly basis.

If rates increase, you can pay the minimum amount (Option 1), in which case some of your interest would be deferred. Deferred interest, also known as negative amortization, occurs when the monthly payment is not sufficient to cover the interest accrued during the prior month. The unpaid interest is added to the balance of the loan, rather than increasing the current monthly payment.

You can avoid deferred interest and take advantage of the maximum tax benefit in the current year by paying Option 2 or 3.

Rate decreases may result in accelerated amortization, reducing principal or any unpaid interest more rapidly.

Increase Flexibility

After considering your monthly financial objectives, choose the available option that best suits your needs. Just enter the amount of the option selected in the payment coupon section of the loan statement. In addition to the four payment options, your monthly statement will show, if applicable, the total amount of unpaid deferred interest on your loan. You may pay all or part of this deferred interest at any time.

No options will be offered if the loan is delinquent; then the total amount due will be required.