How to Hack Sallie Mae Student Loan Payments

Note that the situation for student loans has changed due to the impact of the coronavirus outbreak and relief efforts from the government and many lenders. Check out our Student Loan Hero Coronavirus Information Center for additional news and details.

* * *

Your loan servicer plays a major role in your repayment. And if you happen to have Sallie Mae student loans, the good news is you have a wide selection of options to make those payments easier on your budget and save money over the long term.

Whether you’re seeking help via Salle Mae’s rate reduction program or attempting to hack Sallie Mae student loans to pay them off faster, here are some topics to consider:

How to check which Sallie Mae student loans you have How to lower Sallie Mae payments How to set your Sallie Mae student loans for an early payoff What kind of Sallie Mae student loan do you have?

If you decided to apply for private student loans to help pay for college, you might have selected Sallie Mae as your lender and loan servicer. It’s a popular choice, as the company currently manages over $22.9 billion in private loans.

The first step in repaying your loans is identifying what kind you have, as well as the length of your repayment terms. Sallie Mae offers various types of loans; see the table below for more details.

You might have also borrowed residency and bar study loans available to future healthcare and law professionals, respectively. If that’s the case, review the terms of your loan to understand your repayment options.

How to lower Sallie Mae payments

Once you graduate and start making payments, it’s important to understand all your repayment options so that you don’t fall behind. If you’re struggling to keep up with your loans, here’s what you need to know about repaying your Sallie Mae student loans.

Automatic payment discount Graduated Repayment Period Forbearance Deferment Modified loan terms for delinquent borrowers Automatic payment discount

Sallie Mae recommends borrowers sign up for automatic debit payments. If you follow its guidance and enroll, you might qualify for a 0.25 percentage point discount on your eligible loans’ interest rate.

If an interest rate reduction doesn’t sound significant, know that the savings can add up. If you had a $35,000 loan at 8.00% interest, you’d pay $15,958 in interest charges over 10 years. But if you signed up for automatic debit and got a 7.75% interest rate, you’d pay $15,404 in interest. Taking a few minutes to sign up for automatic payments would help you save over $550.

Making automatic payments will also ensure you never have to fend off Sallie Mae’s late fee, which could go as high as $25.

Graduated Repayment Period

If you’re fresh out of school, or outside your student loan grace period, you could make interest-only payments on your Sallie Mae loans for up to one year. You’d just need to apply for the federal-like graduated repayment plan before your 12th postgraduate loan payment.

Be aware, however, that once the graduated period ends and you resume principal-and-interest monthly payments, your amount due will be larger than before. Your overall loan cost will also increase, as interest would have accrued at a faster clip while you were making interest-only payments.

Forbearance

If you’re wondering what happens if you can’t pay your Sallie Mae loans, thankfully, it has a forbearance policy.

If you’re facing an emergency, like a job loss, you might be able to postpone making payments for up to 12 months — three months at a time — while you get back on your feet.

You should also know that interest continues to accrue while you’re in forbearance, but it can be worthwhile as you get your finances back in order.

To discuss your options, contact Sallie Mae at 800-472-5543.

Deferment

If you’re going back to school, you might worry about how to keep up with your loan payments.

Luckily, Sallie Mae offers deferments, meaning you can reduce or postpone your payments if you’re returning to college, going to graduate school or entering an internship or residency. You can receive a deferment for up to 48 months.

When you defer your loans, interest continues to accrue on the balance. Without payments toward the accrued interest or principal, your balance can grow by a significant amount.

Still, a deferment can be a useful tool, giving you breathing room in your budget while you complete your education.

To request a deferment, complete Sallie Mae’s request form:

For an in-school deferment For an internship, clerkship, fellowship or residency deferment

You could also request a deferment or forbearance during military service by calling 855-534-2668.

Modified loan terms for delinquent borrowers

If you fall behind and miss a student loan payment, you could try to work your way out of delinquency employing one of these options, including the Salle Mae rate reduction program:

Temporarily reduce your interest rate (and, as a result, monthly payment) Reduce your rate and monthly payment as part of extending your loan term Rehabilitate your loan by making three straight, on-time monthly payments

How much will Sallie Mae reduce your interest rate? Some borrowers have reported a temporary rate of as little as 2.00% to 3.00%. With no one-size-fits-all policy made public, however, rate reductions are determined on an individual borrower basis.

By being delinquent or in default on your Sallie Mae student loan, however, you could lose access to some of these support programs. For greater detail, contact the lender’s customer service.

How to hack Sallie Mae student loans for an early payoff

Maybe you don’t need deferment or forbearance, but you are ready to get rid of your student loans as quickly as possible. If so, use these tips to pay them off ahead of schedule.

Pay something while in school Make strategic extra payments Consider student loan refinancing Pay something while in school

You can cut down on interest charges and save money by making even small in-school payments. Besides deferment, Sallie Mae has two in-school repayment options, including:

Fixed repayment: Submit a set amount each month Interest repayment: Cover the accrued interest each month Make strategic extra payments

When you make an additional payment, Sallie Mae first applies it to unpaid fees, then to unpaid interest. Next, any remaining amount is applied to the current balance. Unless directed otherwise, the extra payment will go toward your next payment due. To speed up your repayment, contact the company and ask it to count it as an extra payment, rather than reducing your next payment.

Measure the effect of this move using our lump sum extra payment calculator.

And you don’t have to worry about a Sallie Mae prepayment penalty: The lender doesn’t charge one.

Consider student loan refinancing

If your Sallie Mae loan has a high interest rate, you could save a substantial amount of money by refinancing your student loans.

With refinancing, you take out a new loan for some or all of your current ones. This way, you can get a better interest rate, a longer term with smaller payments or a shorter term to get you out of debt faster.

Find out how much you can save by using our refinancing calculator. And if you think this might be the right move for you, compare offers from multiple refinancing lenders to ensure you get your best rate.

Andrew Pentis contributed to this report.

The post How to Hack Sallie Mae Student Loan Payments appeared first on Student Loan Hero.