Paying More Than Minimum

[SyntheticMemories]

I have three private loans held by Sallie Mae, one by Wells Fargo, and two by AES. I will begin making payments on Wells Fargo next month, then AES in Sept. and Sallie Mae either in Dec or January. 

My question is this, my Sallie Mae loans are the one's with the lowest balance, but the highest inrest rate...around 9.25%. I want to pay those off first and in Sept. I would like to start putting $150 or so to one of those three. I hear a lot of people saying to make sure you have it applied directly to the principle. But, when I log into the website and go to the pay option, it doesn't say anything about where it's going. So how can I make sure these payments from Sept-till I start paying in Dec or January (and the small extra I have then) goes towards the principle instead of intrest.

Thanks for any & all help!

PS: If you know how it works for the other companys, please inform me of that too, as I will eventually get to making extra towards those companies. 

[laz98]

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@SyntheticMemories wrote:

 My question is this, my Sallie Mae loans are the one's with the lowest balance, but the highest inrest rate...around 9.25%. I want to pay those off first and in Sept. I would like to start putting $150 or so to one of those three. I hear a lot of people saying to make sure you have it applied directly to the principle. But, when I log into the website and go to the pay option, it doesn't say anything about where it's going. So how can I make sure these payments from Sept-till I start paying in Dec or January (and the small extra I have then) goes towards the principle instead of intrest.

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When I go to pay my Sallie Mae student loans, it will tell me my payment is $150 (for example).  I can then put in $200 as my payment amount.  On the next screen, it will list my student loans & ask me how I would like to apply the extra amount.

[SyntheticMemories]

I just got payments set up. Now, my three loans at Sallie Mae are already in seperate billing groups. So, I can already pick which LOAN I want to pay. But, I went through the steps to pay...and right before I submit the payment (the verify stage)...it still did not give me an option of, intrest or principle with that payment. 

[laz98]

I believe it's Sallie Mae's policy to put any extra money towards principal, & not the next month's payment.  So far, I haven't had any problems (knock on wood!).

How are my payments applied:  When we receive a payment, we usually apply it first to late fees (if any), followed by unpaid accrued interest, and then to the loan principal balance. (The order of the application may vary depending on the requirements of your Promissory Note.) Interest on your loan(s) accrues daily, so the total amount of interest you'll pay during repayment can vary depending on when your payments are received. It's to your advantage to send your payments on time, or early, to avoid paying additional interest and late fees.

[SyntheticMemories]

I think I understand now, I was thinking you pay the minium and that goes towardsany accured  intrest, and anything over that (even if you have say $1,000 in intrest goes to principle) BUT, your saying that until you get your current intrest to 0, or just the monthly amt. accured. your going to be paying on that intrest and theres no way to dictate (nor does it matter) how it's applied?

Sorry, I guess I understood it wrong when I was reading other posts! 

[laz98]

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@SyntheticMemories wrote:

I think I understand now, I was thinking you pay the minium and that goes towardsany accured  intrest, and anything over that (even if you have say $1,000 in intrest goes to principle) BUT, your saying that until you get your current intrest to 0, or just the monthly amt. accured. your going to be paying on that intrest and theres no way to dictate (nor does it matter) how it's applied?

Sorry, I guess I understood it wrong when I was reading other posts! 

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The bolded part, that is my understanding with Sallie Mae, yes.  You said your loans are listed individually, so I don't know if you would be able to do it differently.  Mine are all listed under one billing group.

[SyntheticMemories]

Yeah, last month I called and asked them to list them individually for me.  

Thanks for your help! It makes sense now. 

[IOBA]

SyntheticMemories - you should still follow up (on the website, on the phone) to make sure the payments are applied correctly.   I had to call after EVERY single payment I made on my multiple student loans with Sallie Mae.  It didn't matter what I said when I made the payment, the payment was applied towards future payments or future interest.  The customer service reps reading the script actually had the gall to tell me that I was NOT allowed to make extra payments ever on the loan!

I followed up after every single payment made.   

I paid off all the loans early.

[SyntheticMemories]

Thanks IOBA! Will do. Payments to Salle Mae don't start until Dec or Jan...but the small amout I will have after paying my other loans, I'm going to go ahead and apply towards the Sallie Mae ones, and pray I get that job that pays double what I make now (which isn't much!). 

[IOBA]

SyntheticMemories - when I was paying off my loans (and other debt), I made an excel spreadsheet that listed each creditor, the loan amount, the interest rate, the monthly minimum payment, and the goal date for payoff.   I updated it manually every time I made an extra payment.  Every payday, which was two weeks, I updated it on the computer and printed out a new sheet and put it on the fridge.  Yes, the fridge where everyone could see it.   And yes, it made me work harder to get things paid off.   And yes, people looked at it and asked questions.   Once they understood what the sheet was for, and my updates, they began to congratulate me for making an extra $20 payment, etc.

My total debt then was about 495k.  So $20 didn't look like a lot and the bottom line moved down slowly...but I kept at it!!

Don't give up.  Make extra payments when you can.  Follow up to make sure the extra payments are applied correctly.