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What is the best way to pay off my Sallie Mae loan?

[ Edited ]

I took out a $4000 student loan for the summer. However, I only used $1430.68 and was refunded $2,569.32, which I put into a savings account.

 

I wanted to know should I continue with the minimum payments of $25--which isn't much, this month for example the interest was $18.94 so I'm guessing only $6.06 off the principal was paid--until I have saved the whole $4000 to pay the loan off all at once--? Also what would be the best procedure to pay it off all at once without Sallie Mae doing something sneaky that would still keep me in their clutches..lol?

 

Or should I also pay the amount I currently have saved in my account (which is now at $2749.36), along with the $25 I already paid? Would this lower the principal amount I have left (the way how sallie mae works confuses me) and/or lower my interest rate?

 

All I want to know is what is the best way/procedure to pay off this loan without incurring too much hassle in doing so and getting this off my back as soon as possible?

 

Thanks

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Re: What is the best way to pay off my Sallie Mae loan?

Welcome to the forums!  :smileyhappy:

 

It's up to you.  Is it more important to you to have that money in savings, or to have your loan paid off?  Installment accounts are a very small portion of your overall credit score, so it's not going to make a drastic difference either way.  Personally, I would just keep making my small payments.

 

If you paid a big chunk, you would reduce the principal owed, not your interest rate.  It should not affect your interest rate at all.

 

I have yet to pay off any of my student loans, so I can't tell you what the most "hassle-free" way to pay one off would be :smileyhappy:

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Re: What is the best way to pay off my Sallie Mae loan?


laz98 wrote:

Welcome to the forums!  :smileyhappy:

 

It's up to you.  Is it more important to you to have that money in savings, or to have your loan paid off?  Installment accounts are a very small portion of your overall credit score, so it's not going to make a drastic difference either way.  Personally, I would just keep making my small payments.

 

If you paid a big chunk, you would reduce the principal owed, not your interest rate.  It should not affect your interest rate at all.

 

I have yet to pay off any of my student loans, so I can't tell you what the most "hassle-free" way to pay one off would be :smileyhappy:


It's definitely more important for me to have the loan paid off, I only created the savings so that I can save up the full amount, while earning interest on it to help me out a little. I just don't get how sallie mae works since I've read so many different things in which people had a hard time with them particularily when they wanted to pay more than the minimum amount to decrease their principal and there was a complex process involved--I guess that's my real question..

 

Thanks for answering my other question and the addtional information: I didn't realize what it would do to my credit score but it's nice to know not much would happen :smileyhappy:.

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Re: What is the best way to pay off my Sallie Mae loan?


FIM16 wrote:

 I just don't get how sallie mae works since I've read so many different things in which people had a hard time with them particularily when they wanted to pay more than the minimum amount to decrease their principal and there was a complex process involved--I guess that's my real question..


I understand.  It does seem like a lot of people have trouble.  I personally have been fortunate & have not had to deal with any shenanigans from Sallie Mae, but there's always a first time.  I would probably call to pay it off (when you're ready), if you are really worried it will not go smoothly.

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Re: What is the best way to pay off my Sallie Mae loan?

Here's what you do:

 

1. Send them a seperate check that has account number, loan group, and "Apply to princple" in the memo area.

 

2. They'll ignore all instructions and  apply it to future interest and make it so there are no payments for a while, LOL!

 

3. Call and have them apply your payment to principle over the phone.

 

Sallie-Mae may loses money when paid early and will always make it difficult. :smileyhappy:


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Re: What is the best way to pay off my Sallie Mae loan?


drkaje wrote:

Here's what you do:

 

1. Send them a seperate check that has account number, loan group, and "Apply to princple" in the memo area.

 

2. They'll ignore all instructions and  apply it to future interest and make it so there are no payments for a while, LOL!

 

3. Call and have them apply your payment to principle over the phone.

 

Sallie-Mae may loses money when paid early and will always make it difficult. :smileyhappy:


So basically without calling them the first two steps you suggested won't do anything? Sigh..such a process. Sallie mae sucks. But thanks for explaning it makes the process or procedure and what I need to do clearer :smileyhappy:.

Last question: Do you think I should save up my money until I have the total principal I borrowed before sending them a check or should I send them what I have right now and then pay the rest off in time?

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Re: What is the best way to pay off my Sallie Mae loan?



I understand.  It does seem like a lot of people have trouble.  I personally have been fortunate & have not had to deal with any shenanigans from Sallie Mae, but there's always a first time.  I would probably call to pay it off (when you're ready), if you are really worried it will not go smoothly.

 

Thanks for the help. According the person below your post, calling them is probably what I'm going to have to do :smileyfrustrated:

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Re: What is the best way to pay off my Sallie Mae loan?

That's the only way. Basically, any extra is automatically applied to future payments. Unless there's something specifically in the memo they'll play stupid. The checks are electronically scanned/deposited.

 

I did the pay/call dance with them for a year. Thought payments were bringing down principle and Sallie-Mae kept pushing mack my due date. Called every month to have the account adjusted and took great pleasure in feeling their annoyance.


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Re: What is the best way to pay off my Sallie Mae loan?

I have my loans set up for automatic debit, so my checking account is linked to my Sallie Mae account. When I want to pay extra, I just go to pay now; select the loan, amount, and payment date; then it asks if I want to apply the payment to principal or future payments. Choose principal and it will apply the payment to accrued interest first, then the principal amount. I don't know if $25 is the lowest minimum payment, but they may lower your minimum payment when they review the account balance, which happens about every 3 months for me.

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Re: What is the best way to pay off my Sallie Mae loan?

Thanks everyone!

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