I began repayment of my variable rate student loan in 1996 at the max rate of 8.25%. The rate decreased .5% for one year and then returned to 8.25%. During this time my monthly payment remained the same. When the rate increased BACK to the 8.25% the loan company increased my term past the max 120 months to 135 months. The loan company was then purchased by Sallie Mae. They know little or nothing about the details of this, but they will not adjust my loan. I have worked with the federal ombudsman to no avail. What are my legal options? Are there variable rate loan calculators where I can duplicate their numbers? How can I verify that I am not paying too much in interest?

*courtesy bump*

Sorry, I have no idea how to calculate the interest. I'm doing good to balance my checkbook... LOL. I'm sure someone will reply who does have a good answer, though.

Sorry, I'm with Cheech on the "no idea how to calculate interest" answer! But, I do know that with my loan, the payments don't change even when the interest rate changes; it just changes the amount of time it takes to pay off the loan. So, in my case, I have a consolidation loan, which is usually a fixed rate loan. The interest rate was fixed last year when I started the loan at 4.25% and that's what they used to calculate the payments. Then they reduced the interest rate to 4% because I opted into the auto-debit program. After 24 months of on-time payments, they will reduce the rate to 3%. All this time, my payment amount hasn't changed from the original one that they calculated with an interest rate of 4.25%. It's just reducing the term of the loan. Does that make sense?

Hope that helps at least a little!

Good luck!!

Yes, I understand that. With my original loan company my payments always stayed the same. When the loan rate decreased, the loan would be paid off earlier. But I began my payments when the rate was at it's max, so the term could not be extended past the max term of 120 months. This works as long my payments stayed the same, which they did. I still do not understand how the loan company could extend my term past the maximum, as stated in my loan papers. I just wanted to find some sort of calculator to verify their math. How do any of us with a variable rate loan know they are not paying too much?