When I started college almost 7 years ago, a portion of my student loans came from Sallie Mae. For the first year, my grandfather co-signed to get me a nice interest rate of 4.75%. For my second term, I was on my own with an interest rate of over 13% – a significant difference when it comes time for repayment.
I always overpay my loans by a few dollars per month. I was surprised to see how they handle any overpayments when I do not directly contact them and request that the extra money be applied to the principal of my loan “1-02”.
By default, they were applying the extra money to the lower interest loan “1-01”. The result? Last month the balance of my 4% interest loan went down by an amazing $56! The balance of my 13% interest loan went down by a mere $2. … Very frustrating when I worked hard for my money and it should be so obvious that anyone who is overpaying is trying to save money in the long-run. I did not expect them to put all the extra money on loand 1-02, but I would have expected them to put at least a third of the extra on it. (since loan 1-02 makes up a third of my debt to them)
This month I was happy to see the option to tell them where to apply my extra $6.73 right there on my screen as I submitted the payment.
Sallie Mae. I am still frustrated at how you handled my past payments. But I truly do appreciate the change you have made.