Ok, so I am starting my payments after graduation and have a general question concerning a disparity in the info on the salliemae.com website.
According to the salliemae website, if I overpay a payment then that amount is applied to the principal of the loan. This information follows from the following web page:
http://www.salliemae.com/after_graduation/manage_your_loans/making_payment/prepaying/prepaying.htm
Any extra payments you make are applied to the principal of the loan, after the accrued interest and any outstanding fees (if applicable) are satisfied. If you reduce your principal—even by a little—you reduce the amount of interest you have to pay over the life of your loan.
If I log into my accounts and go to the FAQ page, salliemae now states that any extra payment amounts are applied to future payments.
What if I want to send larger payments to pay down my principal balance?
If you send an amount greater than your monthly installment, we will automatically apply those funds toward your next monthly payment?unless you tell us otherwise.
The payment is first applied to unpaid late fees and charges, then to the accrued interest due on the loan, and the remaining amount is applied to the principal balance. Payments cannot be applied to future interest because interest accrues under the simple daily interest formula (see How does my interest accrue?).
Of course these two paragraphs don’t’ make sense to me as the first states that it’s applied to future payments. The second states that it’s applied to principal.
So, which is correct? It seems sort of a bait and switch to me. Advertise that you don’t apply overpayments to future payments and then do exactly that once they have the loan.
I plan on overpaying, so I would like to hear anyone’s experience with this. Thanks in advance!
Full Version: Overpay / Prepayment of SL for Salliemae Question
I am paying on a citi loan, small amount. Monthly is $16. I pay $30 and check the box that states "apply overpayment to principal".
Do they have a box like that or something that identifies HOW YOU want your payments to be applied?
Do they have a box like that or something that identifies HOW YOU want your payments to be applied?
The trick is to send in an overpayment that is less than one full payment with Sallie Mae.
For instance, my monthly payment is $51. I send in an additional $50 per month. That $50 then gets applied to accrued interest to date first, then principal.
You can also change your payment amount once you are logged in to your account. So if I wanted to regularly make a $200 per month payment, I would change it there.
I think you can also mail in a check with a note to apply to principal.
HTH
And yes, I think that's a bit of bait and switch, but it can be done if you know how to do it.
For instance, my monthly payment is $51. I send in an additional $50 per month. That $50 then gets applied to accrued interest to date first, then principal.
You can also change your payment amount once you are logged in to your account. So if I wanted to regularly make a $200 per month payment, I would change it there.
I think you can also mail in a check with a note to apply to principal.
HTH
And yes, I think that's a bit of bait and switch, but it can be done if you know how to do it.
QUOTE(Daizzybee @ Jul 14 2007, 01:24 AM) 
I am paying on a citi loan, small amount. Monthly is $16. I pay $30 and check the box that states "apply overpayment to principal".
Do they have a box like that or something that identifies HOW YOU want your payments to be applied?
Do they have a box like that or something that identifies HOW YOU want your payments to be applied?
I have only received my first payment stub from them and it does not have anything about overpayment on it. Thanks for checking though.
QUOTE(SCgurl @ Jul 15 2007, 05:43 PM)
The trick is to send in an overpayment that is less than one full payment with Sallie Mae.
For instance, my monthly payment is $51. I send in an additional $50 per month. That $50 then gets applied to accrued interest to date first, then principal.
You can also change your payment amount once you are logged in to your account. So if I wanted to regularly make a $200 per month payment, I would change it there.
I think you can also mail in a check with a note to apply to principal.
HTH
And yes, I think that's a bit of bait and switch, but it can be done if you know how to do it.
For instance, my monthly payment is $51. I send in an additional $50 per month. That $50 then gets applied to accrued interest to date first, then principal.
You can also change your payment amount once you are logged in to your account. So if I wanted to regularly make a $200 per month payment, I would change it there.
I think you can also mail in a check with a note to apply to principal.
HTH
And yes, I think that's a bit of bait and switch, but it can be done if you know how to do it.
Ok, thanks for the input. I am just starting my payment process and I just didn't look forward to always having to argue with them about applying to principal. Good to know that they will in fact apply to principal. I'll keep my eye on them and see how it goes the first few payments.
As far as changing the payment amount: Is that in reference to automatic payment amounts? I have not set up auto-pay yet.
In the past I have received papers stating discounts you can get for setting that up. I wanted to check and make sure I get any discounts I can before just setting up auto-pay on my own. Anyone still know if they have those discounts for auto-pay?
Thanks again!
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