topic Sallie Mae questio in Student Loans

Sallie Mae questio

Anonymous — Thu, 22 Jul 2010 22:58:31 GMT

I have a Sallie Mae currently with $40k. It was $44k and I've made $500/month payments for three years. I think it's supposed to be paid off in 2020 but in that case I need to see some serious principal reduction. Talking to the CSRs from India is not exactly a confidence-building exercise. Does anyone know for sure whether the interest is all front loaded and then after 5-6 years of paying almost all of each month's payment goes to principal? Or will I be paying beyonf 2020?

Re: Sallie Mae questio

IOBA — Fri, 23 Jul 2010 00:46:22 GMT

1. When you call and reach a rep in another country, ask for one in the US. If they insist they are in the same country (been there!) then ask them what time it is. If they hesitate, you probably have caught them in a lie. Insist on a US rep.

2. Usually when you pay the loan, anything extra goes towards the future payments. Interest is charged and added daily on the loan. (That was my experience.)

To pay it off sooner, send in extra payments and specify that they are for principal only! Then follow up and make sure it's applied properly.

Re: Sallie Mae questio

Tazman81 — Fri, 23 Jul 2010 14:57:28 GMT

@Anonymous wrote:
I have a Sallie Mae currently with $40k. It was $44k and I've made $500/month payments for three years. I think it's supposed to be paid off in 2020 but in that case I need to see some serious principal reduction. Talking to the CSRs from India is not exactly a confidence-building exercise. Does anyone know for sure whether the interest is all front loaded and then after 5-6 years of paying almost all of each month's payment goes to principal? Or will I be paying beyonf 2020?

The entire length of your loan, your payments will be going to both principal and interest. In the beginning, large amounts of your payment go toward interest beause your balance is so high. Once your principal balance starts to decrease, you will see more of your monthly payments being applied toward principal and less toward interest.

What type of loans are these? Are they federal loans or is this a private student loan? Here is the reason I ask....

Normally when you get federal loans through Sallie Mae then it is broken down into multiple different loans. Sallie Mae just makes it easy for you by allowing you to send in 1 payment and they dispurse it through your loans. If Federal, normally the loans are numbered, -01, -02, -03, -04... etc. Well, within those loans, some of them may be subsidized (interest paid by the government) or unsubsidized (interest paid by you).

If these are federal, you need to first list out the loans and see which ones are subsidized and which ones are not. Now, when you make extra principal payments, you need to request that those principal payments be applied to your unsubsidized loan. You do this by sending the principal payment with your account number and the -## of the unsubsidized loan.

This will allow you to pay less out of pocket in the long run because you will be paying off the loans that you are paying the interest on first.

Re: Sallie Mae question

Anonymous — Fri, 23 Jul 2010 15:15:11 GMT

Tazman,

You are right, there are a series of separate loans for both my wife and I which are all GSL loans (originally through a bank but now paid to Sallie Mae directly) and they are consolidated into one loan. My interest rate is 8%. I had several periods of forebearance years ago where regrettably I did not pay at least the annual interest for those periods.

I tried an amortization approach to determine payoff progress to the loan based on the current balance and interest rate on a ten year schedule (when the loan is paid off) and it seems to work, though Sallie Mae doesn't have any such tables on their site. I wish they did. That would be 120 monthly payments of approximately $500 each for a current balance of $40K.

Re: Sallie Mae question

laz98 — Fri, 23 Jul 2010 19:08:17 GMT

i read on the sallie mae website that they don't provide amortization tables because your payments are expected to remain the same throughout the life of your loan???

"Why haven't I received an amortization schedule?
We do not automatically provide amortization schedules. If your payment amount changes we will notify you."