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Author Topic: Sallie Mae Advice
mlux22
Administrator
Posts: 3
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Post Sallie Mae Advice
on: September 5, 2013, 23:35

Reader Mike has a question regarding Sallie Mae:

Due to the high interest rate on his loan, his payments will be counting 75% towards interest. Over the life of the loan he will pay over triple the value of the original loan. He has asked SM for help, but the best they will do is lower his payments by .25% (which is essentially nothing). His full question can be found here: http://studentloansherpa.com/rate-sallie-mae/#comment-1996

I know that this is a very common question/issue... does anybody have any suggestions for Mike?

stephen
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Posts: 1
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Post Re: Sallie Mae Advice
on: October 11, 2013, 01:20

Hi Mike,

Just had an idea that worked for me in a similar scenario. My loan was about $6000 through Citi initially that eventually was bought by Discover. The interest rate is something like 9.5%, but at the time, I had to have the loan because it was my second to last quarter of school.

Anyways, I also set up auto bill pay to knock out the quarter percent. However, the biggest thing I did was change the minimum payment from like $58/month to $150/month. I know this may not be a realistic option in your situation, but just sucking up the ridiculousness that is that loan and committing to paying 3 times what they recommended as a minimum payment will knock out that loan exponentially faster.

The ironic part was the lady on the phone seemingly encouraged me to up my payment. She also calculated the difference in what I pay and, while I don't remember the actual numbers, it was nothing short of outrageous. If my memory serves, it literally knocked 16 years of payments (20 years to 4 years) and saved approximately $8000.

Granted, I have other school loans, but fortunately they are generally reasonable interest rates so I haven't done this with my other loans. However, I definitely think this is something worth considering.

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