Sallie Mae & finance charges, OMG!!

TheCommuter, BSN, RN · Dec 4, 2007

Sallie Mae loans have terms that are normally based upon the applicant's credit history.

When I applied for the Sallie Mae private student loan back in 2004, I was approved for the entire $20,000 that was requested by me. At 7 percent interest over 10 years, the entire amount owed came up to slightly over $28,000. In other words, it would have cost me $8,000 to borrow $20,000. My credit scores from the 3 major reporting bureaus were all excellent (greater than 720), so they issued me a loan with terms that I could live with. Thank goodness that my loan was paid off within 2 years of its origination date.

My suggestion is to seek another lender that will work with you. Good luck! :)

angstudentnurse · Dec 4, 2007

Don't let that get to you.

I got a chase loan for 10,000 and total it will be 27000 to pay back. O_O

I almost cried too. But I took it anyway. That 10,000 will get me through my first year of school...and the LPN portion of the program. So at least I will have made it that far.

Did they break down the payments for you? Mine are like 114 a month. Which is doable.

ChargeNurseAmy74 · Dec 4, 2007

I'm thinking since I have deferred payments until Jan 2009, that I could use that years income tax return (which I usually get alot, $5000 if not more)..on the loan to just cut it down in half. Then I'll have to finance only the second half. I'm trying not to stress, but gosh, I am. Thanks for all the advice & comments.

Asherah, BSN, RN · Dec 4, 2007

Ok. I just applied for a loan thro Sallie Mae, first off they only awarded me $12,000 of the $24,000 I asked for. Yesterday I got my documents to sign and review and after reading it I don't know if I want to do it. It says, $12,000 for the loan, $700 loan fees, $22,000 finance charges for a grand total of $34,000 to be paid back. OMG, $34,000 on a $12,000 loan. I feel so shot down right now, there are only 5 weeks until school now. I just want to cry! Has anyone else experienced such a thing?
thanks for reading.

You don't mention the annual percentage rate they've granted you or how long of a loan repayment term they've based those finance charges on (10 yrs, 20+?) Loan companies (public and private) will often suggest the longest payment terms so they can keep your payments attractively low and also make more money off of those finance charges. As long as there is no pre-payment penalty in the loan terms, you will have the flexibility of paying the loan off more quickly than they have suggested, thus saving you a ton in finance charges.

When you get done with school, get a job and make a budget, you can then decide how much extra you would like to pay the lender, and you can determine how much time and interest you will save on paying down the principal balance.

Also, if you find that you have extra money from the loan disbursement, and you are sure that you will not need it while you are in school, you can always begin paying the loan early (e.g. while you're in school), even though you are in deferment.

Good luck!

jemommyRN · Dec 5, 2007

I got a 15k loan from them and if it goes the entire length (10 yrs) it'll be 40k. I plan to get it paid immediately.

miss rochelle · Dec 5, 2007

i just took out an $8500 loan; the finance charge is in the $13k range, so overall debt would be $21k plus a few hundred. but that's if i take the 20 years to pay it off... i'm so not doing that. my goal is to pay it off ASAP after graduating and what not. i live with my parents (very thankful that they are willing to help me as far as living arrangements and food goes ) and will probably live with them an extra year or two so i can pay off my debt and build up my credit.

angstudentnurse · Dec 5, 2007

I've just trying to think of it as a necessary evil.

RainDreamer, BSN, RN · Dec 5, 2007

It's an evil thing called interest!

My Sallie Mae loans were up as high as 10% interest. I consolidated and got them down a bit more, but it's still high. If you can, try to get as many government loans as possible, as the interest rate is incredibly lower.

Diary/Dairy, RN · Dec 5, 2007

You should see the amount of money borrowed for my house versus what I will pay the mortgage company back.......... :(

Reno1978, BSN, RN · Dec 5, 2007

It's an evil thing called interest!
My Sallie Mae loans were up as high as 10% interest. I consolidated and got them down a bit more, but it's still high. If you can, try to get as many government loans as possible, as the interest rate is incredibly lower.

Even gov't loans went up - I think they're 6.8% now, whereas they were 2.7% when I started college 3.5 years ago.

Remember that you can usually pay off loans early or overpay your loans to reduce the amount of time it takes to pay them off, reducing the amount of interest you pay, etc.

RainDreamer, BSN, RN · Dec 5, 2007

Even gov't loans went up - I think they're 6.8% now, whereas they were 2.7% when I started college 3.5 years ago.
Remember that you can usually pay off loans early or overpay your loans to reduce the amount of time it takes to pay them off, reducing the amount of interest you pay, etc.

Yeah, thankfully when I graduated 2.5 years ago, I got my government loan rate locked in at 2.9%. So I lucked out there.

But even a 6.8% fixed government loan is a lot better than a 10% variable private loan.