<prompt> Human: Sorry if this has been asked before, I tried searching for this question but could not find it. I will try to keep this as simple and straightforward as I can.I am repaying my student loans. This month I owe 95 as my minimum payment. I want to pay an extra 105 towards the loan with the highest interest rate. I applied the extra 105 towards that loan and Navient gave me two options for my billing direction. Heres what it asks me:You made a payment that is equal to or more than the amount of future monthly payments - do you want to be billed for your full Monthly Payment Amount? Note: Well always apply your Overpayment toward your Current Balance.Option 1: No, Advance my due date by the number of payments I cover. Even if you have zero amount due on your billing statement, continuing to make payments will reduce your total cost of borrowing.Option 2: Yes, Bill me for my full monthly payment. You will be required to make a full monthly payment with your next billing statement.I read that I should be paying towards my principal, Im not sure which of these two options does that. I need a ELI5 on this. Thank you in advance.Assistant: Navient services one of my loans as well. Youre correct in making overpaymentsas you should ie: avalanche to minimize interest accrual and lessen principal each month for the loan with the highest interest rate.Navient allows for Custom Pay, which has these options Direct an Overpayment This option allows you to pay more than your amount due and choose how to allocate the extra amount. Specify for Each Loan Choose this option if you would like to input a custom amount for each loan.I always use Direct an Overpayment, and place my whole payment into the loan. That way I pay the minimum monthly balance, and the excess also is funneled to that loan to chip away at the principal too.And dont advance your due date, especially if you want to be minimizing interest and depleting principal. I would only if you foresee yourself being tight on money. But you should definitely keep up the debt avalanche monthly, if you can afford.Human: I pay all of my bills manually, to keep an eye on any price changes so would I have to first pay the minimum balance like I normally would and then proceed to Direct an Overpayment? Or does the Direct an Overpayment feature pay the minimum balance first and then use the rest as an overpayment?  <response>: You need to sign up for auto payment - all of the interest on your loans will go down .25.This does not stop you from making extra payments manually either. When you manually pay additional send the money to the loan with the highest interest rate.unless you are on an income contingent repayment plan and currently have some loans in negative amortization. You do not pay interest on outstanding interest due and with the interest subsidies you may only be increasing your effective interest rate.For example If you have a number of loans at 3 and some at 6 - and the monthly payment covers all the interest for those at 3 and half the accrued interest from those at 6.Paying extra to the 3 loans reduces the overall interest you are responsible for paying while directing it towards those with 6 interest will first go to paying down outstanding interest which itself is not subject to interest and then to reducing the princie which lowers your accrued interest but which intern reduces the amount of interest subsidies from the government and thus not reducing the amount of interest youre responsible for - basically resulting in an increase on the effective interest rate youre paying. 