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01-01-2009, 10:39 PM #1
I am brand new to the world of loans and financing, and I've got a question. I've got 7 Sallie Mae student loans. They each have their own beginning balance and variable interest rate, but Sallie Mae clumps them all together and my payments get divided up evenly between the 7. Three of them are at 4.21%, and four are at 6.8%. Those don't seem that bad (though I wouldn't know), just looking at the numbers, but I always cringe when I look at my account and see $2-3 interest being added each day. In your opinion, would consolidating get me a lower interest rate?
I also have noticed that Sallie Mae gives me no option to pay straight to the principal. This month, DH got a bit of money from his company for profit sharing. On the 16th, I paid $39.xx. Of course, my last payment was on the first of December, and since then about $29 interest had been added, so only $9.xx of his profit sharing benefits actually got through to make a dent on our principal. I've always gotten advice to pay extra straight to the principal, but SM won't give me that option. Would consolidating change my situation? Do you switch loan companies when you consolidate?
I need some expert advice!
01-02-2009, 12:27 PM #2
- Rep Power
Doesn't looking at that daily interest just make your stomach hurt? I hate seeing it on my car loan but looking at it does make me want to pay it off faster.
I am not sure what the going rate on loans are now. It might be a good idea to reasearch to see if you can get anything lower then %6.8 at least for those 4 loans. I may be wrong but %4.21 sounds pretty good on the other 3. You may have trouble finding anything lower then the %4.21 and I definatly would not refinance them in any way if you are going to pay a high percentage.
I had a Sallie Mae loan when I went to college and I was able to send a check in with a note that said it should go towards principal. Have you called to see if you can do that?
01-02-2009, 01:35 PM #3
I have not actually talked to anyone at Sallie Mae to see if they'd do it for me - I pay online, usually. But I will call and see if there's that option! Thanks for the thoughts - 4.21 does sound good, but the 6.8 sounds icky. I've done a little looking around and it looks like a lot of places just average your current rates - which wouldn't really help me out very much.
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01-02-2009, 01:44 PM #4
I didn't have Sallie mae, but when I cosolidated, I made sure to keep the same payment schedule. I did NOT want to carry them out for 30 years. So, while it only saved me a few bucks a month, in the long run I still saved by having a lower payment in the same 10 years.
Does that make sense?
01-02-2009, 01:59 PM #5
Definitely - There is no way I'm going to take a LOWER monthly payment - my main goal is to get a lower interest rate. But I'm getting the feeling consolidation isn't for me - it seems like my best bet is to just keep plugging away and watching my daily interest drop as my principal drops.
01-02-2009, 03:12 PM #6
I was lucky, when I consolidated, it lowered my interest and therefore, my payment but only a bit (like $20 a month). If I would have extended my payments for 30 years, I would have lowered my monthly payment more....maybe like $50 (can't remember the exacts now). However, when I figured it out, it didn't make sense to me. I wasn't really going to save THAT much more money and I was going to have this HUGE debt lingering over my head until I was close to retirement. So, while it has sometimes been a struggle to have to write that check every month, I can see the light at the end of the tunnel.
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