I'm trying to make an extra payment on my student loans; however, I cannot find where on the Sallie Mae website I can specify to which loan I want my payment applied. I also cannot find where I specify "principal payment only."

Is anyone familiar with the Sallie Mae website and can assist?

It's a little weird answering my own post (LOL), but I finally got thru to a real, live person at Sallie Mae. Apparently the only way I can specify which loan the payment is applied to is to mail my payment in via check along with a note. Or I can un-enroll in auto-debit, which would allow me to specify which loan on the website; however, I would lose the 0.5% interest rate deduction for signing up for auto debit. They also told me that I cannot make a principal-only payment, that any payments received automatically go towards the interest accrued first and then the principal.

Seems really fishy to me, and I'm more determined than ever to pay these things off and get Sallie Mae out of my life. This sucks.

What in the world??? That doesn't seem right. I thought they had to allow you to make principal only payments. It also seems unfair that you can't specify which loan online without losing that auto payment incentive. I'm glad I never had to deal with them on my student loans! Sorry!

As I am sure you already know, you're student loan accumulates interest daily, but compounds monthly. So, the agent is technically correct, you must clear all interest for the term before you get to eat at your principal.

If you want to make an extra payment, send in a check and on the memo line write, "Acct # xxxxxxx, apply excess to principal" I also write a note and send it with the check. You must always clear the interest before you get to eat at the principal, and when you are accumulating interest daily, it's highly unlikely you are always able to make your extra payment hit on the same day your auto withdrawal is.

Thanks for the sympathy, LeRainDrop. Like I said, just one more motivator to get these student loans paid off and be done with it!

BF, it sounds like you've done this before. I knew that student loan interest accumulates daily; I suppose I just didn't understand the practical implications when it came to paying down the principal. It still doesn't seem right that I can't specify which loan I want the extra payment to apply to online, but if snail mail is what I need to do to get these paid off, then so be it.

Hi alohabear. I know first-hand that student loan servicers can be extremely frustrating, but it sounds like you are doing all the right things. I know people in a similar situations who set up a recurring monthly billpay to make these extra payments. It could be helpful if you have a general idea of how much you plan to put towards it each month, and if your bank has a "memo" field for the billpay where you can specify the loan acct # and the instruction about how to apply the funds.

One other potential resource is SimpleTuition's SmarterBucks website. I spoke with them recently and they say that you can link almost any student loan and make payments to it electronically through their portal (technically, the site allows you to earn rewards which automatically pay down your student loan balance, but you can also make a "personal contribution" towards your loan each month if you wanted to). I haven't checked it out myself, but please post back here if you investigate and it turns out to be a useful tool.

Good luck!

It doesn't actually make a noticable difference that they apply extra payments towards the interest first. As Bichon noted, the interest is accumulating daily. If you pay extra, you pay the same total interest (or a tiny bit less), it's just split over two transactions. Sending in an extra payment doesn't cause you to get charged extra interest.

I had the same problem with choosing which loan to apply my extra payments to. It didn't make a huge difference for me - the interest rates of both (IIRC) of my loans were relatively close. It's been a while, but I recall that they didn't offer me any way to specify, snail mail payment or otherwise. So I just paid it off as quickly as I could.

I haven't dealt with Sallie Mae but I have with nelnet... It sounds pretty similar... it is some major crookery and definitely frustrating! They have to apply the payment to interest and penalties first... yada yada yada it feels like they are trying to set up people for failure.

Thanks, all, for the feedback. I finally decided that it isn't worth the hassle of snail mail, etc, to pay off the higher interest rate one first. Either way, my goal is to have these paid off by Dec '14, and paying the one first will - at most - shave a month or two off of that goal. I made my first early payment online earlier in the week, and I'm pretty happy watching the total go down. I plan on tracking this goal in my fiscal fitness journal this year, so we'll get to watch the balance shrink together.

What surprises me, is that all you brainiacs, despite undergoing exit counseling before graduation, still don't know how to calculate the interest on your loan. I will add, it is explained pretty simply a few posts above this one as well. But, in one last hail mary attempt, THE LOAN ACCRUES INTEREST DAILY.

I hope my initial comments were not misconstrued. Yes, interest absolutely accrues daily. When I said I thought they had to let you make principal only payments, I meant that once your current interest is fully paid, they need to let you pay down the principal. This is as opposed to applying the extra amount paid to future interest. For example, if today my loan balance is $1,000 principal plus $10 interest, then I should be able to pay $110 to be applied first to the $10 interest then to $100 of principal, leaving a balance of $900 principal, rather than the extra $100 going towards the next ten months' interest payments. However, if I pay $10 today, and then $100 in a week, that would not bring the principal down to precisely $900 because in that week, a little bit of interest would have accrued so say $2 goes to interest and $98 to principal. You should be able to principal only ONCE THE CURRENT INTEREST DUE IS AT $0. I have heard of servicers applying extra payments towards future interest due, and you should be able to tell them no, that you want any extra payment to go towards principal. Thus, in a situation where you are mailing in the payments, they need to be in the same envelope; otherwise if they are received on different days, they can't apply to principal only because some interest will have accrued.

This is exactly how payments are applied at Nelnet. Interest on student loans does accrue daily, therefore there is no way to pay "future interest." Anytime you make a payment at Nelnet, any outstanding interest that is on the account will be satisfied as well as any fees you may have, and the remainder will go to principal. For example, your outstanding interest is $125.00 and you send $200.00, then $125.00 will go to interest and the additional $75.00 will go to principal. At this point, interest begins accruing again based on the new principal balance, and when you make your next payment you will need to satisfy the amount of interest that has accrued since your last payment, and the remainder will go to principal. Hope this helps!

Um, what "exit counseling?" There certainly was none offered at my university before I graduated. And, the "counseling" they provided when applying for student loans was simply how to fill out the forms. Honestly, given the sorry state of financial education in the US, I'm surprised that you're surprised. Anyway, most of us are on this forum because we recognize we have some things to learn.

If you have a federal student loan, you need to go through an exit counseling process. Schools/Universities are pretty clear that if you don't complete your exit counseling, no graduation. In fact, there are forms you must sign, you have to give them your driver's license, a relative's contact info etc. It may be a blur to some, but it did happen in some form if you have a federal student loan.

I remember my entrance counseling quite clearly, so I can't imagine why I wouldn't remember receiving exit counseling even vaguely. It's possible since I graduated after the fall semester (vs. in the spring with everyone else) that I either fell thru the cracks or they simply provided me a website to view. It's also quite possible that my memory of the exit counseling is lost in a blur. Either way, I still stand by my statement that financial education is lacking in our country, and it doesn't come as a surprise to me that not everyone understands how to calculate the interest on their loans.