My wife has a Student loan her payment is approx $30 per month. We have been paying $50 monthly since last November. This account was sold to Sallie Mae recently. We received our new payment book and it say's my next payment isn't due until October. There is a area on the payment slip that reads, "If you send extra funds (over your payment amount), We will advance your next payment due date by the number of whole payments satisfied by the extra funds unless you request otherwise.". The ? is do I need to tell them to apply the extra towards the principle or should I just keep sending my normal $50 a month as is. Does it make a difference?
I WOULD. You can continue to pay the extra amount but it will just advance you payments and you will eventually pay it off way ahead of time. However it seems like you will have still paid all the interest. I would ask for the extra amount to be applied to the principle loan amount so that you get some break on the interest. Better safe than sorry. I would write AND call.
If you only have the servicer,in this case Sallie Mae, apply over payment to future payments then you continue to pay interest at the normal rate and save absolutely zero money. You must have them apply all overpayment to principle only. Have your wife contact Sallie Mae and tell them that she wants all overages applied strictly to principle only. BTW, this is one way that most servicers make extra money, not only do they charge you all the interest, but they also have use of the overpayments for their own profit. Fla-tan
Thank you Judy & fla-tan for your reply you confirmed what I was afraid was happening I will have my wife send off a letter having them apply all overpayments to the principle. I may not make money off the computer like some people, but with people like you and this board at least I can save some of the money I do have.
