FAQ: How Does Charlie Calculate Student Loan Payments?

Q: How Are Student Loan Payments Calculated in Charlie When No Payment Is Listed?

A: When a student loan shows a balance but no monthly payment on the credit report, Charlie uses industry-standard rules to calculate a qualifying payment. These rules vary based on the loan program and automated underwriting system (AUS) selected. Here’s how it works:

General Rule: 

If the loan is identified as educational and shows a balance but no payment, Charlie uses these calculations:

• Unknown or Unspecified Mortgage Type
  A default payment of 1% of the balance is used.

• Conventional Loans

  • If AUS is Desktop Underwriter (DU) or Desktop Originator (DO) (or AUS is blank):
    → 1% of the loan balance

  • If AUS is Loan Product Advisor (LPA) or Loan Prospector:
    → 0.5% of the loan balance

• FHA and USDA Loans
  → 0.5% of the loan balance 

• VA Loans
  → 0.4167% of the loan balance (equivalent to 5% ÷ 12)

Notes

• All payments are rounded to two decimal places.

• These calculations only apply if no monthly payment is reported.

• If a valid monthly payment exists on the credit report, that value is used instead.