Sallie Mae - APR reduction and GW possibility

[PayYouNever]

DW has a Sallie Mae student loan that we're looking to zero out asap. But she has had some late payments on this, not to mention I want to get the APR reduced.

I didn't take out student loans when I went to school, so dealing with Sallie Mae is new to me. Has anyone had any luck GWing?

Also, how would one go about reducing the APR? Contacting one of those consolidation companies?

[ngerasimatos]

They are the devil. Good luck.

[treschic]

as far as getting the apr reduced, they aren't like a credit card company, where you can threaten to take your business elsewhere and they will reduce your apr.  For the most part, depending on how long ago they got the loan, the apr that it is currently at is going to be the lowest, since every year the interest rate increases.  it also depends on if they have sallie mae as the lender on a federal or private loan.  if it is federal, i don't really think you can negotiate interest rates.  if it is private, i believe they base your interst rate on your credit score.  so, i think it depends on how low you want it to be.  i think 8% is the lowest i've seen on private loans.  i've seen some people with as high as 16-17%. you can't(edit) negotiate down to 1-2% interest rate.  the best thing to do, to avoid paying soo much interest, is to pay more than the minimum payment over the life of the loan.  hope this helps.

Message Edited by angiepharm on 03-06-2008 01:57 PM

[PayYouNever]

What I'm considering doing is getting a debt consolidation loan, and they paying off Sallie Mae (and a few other stubborn bills that she has) and then create a new TL that we can safely make continuous on-time payments.

Her APR is 12%, but if I could get it down to about 10 or 10.5%, then that would be better. It's only just under $7k, so it's not a huge amount or anything, but I want to get DW in the position where she's only making one or two payments a month (or we'll just use BillPay on our Charles Schwab bank account, which I recommend - no minimums, no ATM fees, no monthly fee, and 3% interest on your money).

[treschic]

i'm not an expert, but i wouldn't use a debt consolidation loan to consolidate her student loans.  you can get a student loan consolidation loan.  they don't base the apr off of the amount, its based on your credit score.  you can call them to determine what the current apr's are for the loans.  again, it depends on if it is private or federal.  current federal student loan rates are 7.22% and i'm not sure about the privates rates as of now, mine are 8.5% from january 2007.  so, you should contact sallie mae or whoever you choose to consolidate the loans. there are alot of companies that offer private consolidation loans, i know the department of education and nellnet offer private student consolidation loans.  so, you may want to compare and contrast.

[PayYouNever]

The student loan consolidation sounds like a good bet, although she only has one loan I'll have to see what Sallie Mae is interested in doing... hopefully, I can get the APR reduced.

I'll be pulling her scores first though, to see if it's even worth a phone call if they're basing it off of scores. As she's had some issues of late.

[Anonymous]

Keep in mind that student loan interest payments are tax deductible. Since her APR is 12%, that winds up around 9% or so after-tax. If you consolidate to a private loan, you would not get any tax savings.

[Nectarine]

I would normally recommend consolidating via the gov student loan program, but SM listed mine as "Account transferred or sold" on EQ CR. Arg.

More info: http://www.loanconsolidation.ed.gov/borrower/bconsol.shtml

Maybe it's worth doing a PFD arrangement, then consolidate. Technically it does pay off the loan -- SM even sent me a record of paid interest for 2007 to use on my taxes. It just might not show up that way on your CR unless you push it. I'm currently writing a GW letter to SM for two neg accounts that are paid off.

(SM bought all of my loans except one, I was already actively avoiding them before I even got the loans). Had I known about DV, I would have done it before I consolidated -- SM is sooo shady and bugged me even when I had an in-school deferment about repayment, had deferment papers 'mysteriously' disappear etc).

I think I'm doing a good job of pretending I like them in the letter though.

(PS: I am doing great with the consolidation loan, I'm not trying to dodge my responsibility or anything).

Message Edited by Nectarine on 03-07-2008 02:56 AM

[Roodog2k]

Plus, SL interest rates will reset in July.  Waiting until July to consolidate may get you a lower interest rate than if you consolidated now, depending on when she was in school. You'll have to do the research on that. Those interest rates are set by law, so you're not necessarily bound to Sallie Mae (for instance).

I think SL interest is somehow pegged to the fed funds rate, which has been lowered significantly in the past few months, so I would look into that if I were you.

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SanFranMatt wrote:
Keep in mind that student loan interest payments are tax deductible. Since her APR is 12%, that winds up around 9% or so after-tax. If you consolidate to a private loan, you would not get any tax savings.

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Message Edited by Roodog2k on 03-07-2008 06:48 AM

Message Edited by Roodog2k on 03-07-2008 06:49 AM

[Roodog2k]

OH, I almost forgot!!!

By consolidating, it "locks-in" the current rate, which typically floats yearly, changing in July.

So, yet another reason to wait until July to consolidate.  To take advantage of the lower rates once they reset for the duration of the loan.

I was lucky and was able to lock in at 4.22%

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PayYouNever wrote:

The student loan consolidation sounds like a good bet, although she only has one loan I'll have to see what Sallie Mae is interested in doing... hopefully, I can get the APR reduced.

I'll be pulling her scores first though, to see if it's even worth a phone call if they're basing it off of scores. As she's had some issues of late.

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