Vlog: Student Loans, Part Tres
Good afternoon, Queercents readers.
This is the final installment in a series on student loan debt. Seemingly the most fundamental part of student lending, making payments is actually the most difficult. Not only are there misconceptions, but there are just plain bad practices a lot of people have when paying down their debts. Join me as we explore these together.
Parts one and two are linked for your viewing pleasure, in case you happened to have missed them.
Leave me questions and concerns in the comments below. If there’s a topic on Gen Y finances you’d like me to cover, please let me know!
Good advice, Clint. Thanks for the hat tip. :^)
You made a good point about contacting your lender before you’re unable to make payments. I was surprised that Sallie Mae will only allow you to apply for economic forbearance 30 days before your first payment is due. You would think that they would want to reward responsible debtors, but their thinking is “how do you know you won’t have a job over a month from now?” But that doesn’t mean you shouldn’t call and get the paperwork ball rolling.
I thought you also made a good point about paying off the higher interest loan first. This is exactly what you would do if you were eliminating credit card debt, so it makes perfect sense.
Clint: Another great vlog, thanks! I agree with Serena about your suggestion to pay off the high interest loan first. It’s also a good idea to keep a spreadsheet that tracks your student loan balances over time. This allows you to keep track of how much you owe to whom and what the annual interest is on each loan. Being organized is key! Melissa wrote a fun article called Welcome to Your Student Debt that some readers might be able to appreciate.
Thanks for the vlog! You mention that any extra payment you are able to make each month does not necessarily get applied to your principal balance. This is what I’m worried about in regards to my payment strategy.
My SallieMae loans are fast approaching repayment and I still cannot tell if I will be able to make extra payments on my principal balance through their online system. Do you have any experience with this? I’d prefer not to have to mail in payment checks and/or call them every time I want to pay off some principal- though I have heard horror stories of them applying extra payments to “future payments”- which one certainly does not want to happen because then SallieMae essentially gets to hold your money for free while interest is still accruing.
Maybe it would be cool to do a vlog about this? The difference between paying off extra principal and making payments early.
I have several stafford loans with Sallie Mae and though they are all at the same interest rate, I would like to be able to preferentially pay off the unsubsidized ones as I am considering going back to school in the next few years and want as little interest to accrue as possible while I’m a student. Do you know if sallie mae lets you apply extra principal payments preferentially? As far as I can tell with their online system, they seem to be lumping all my stafford loans together.
Thanks for your help!
I also have alot of Sallie Mae loans both federal and private. Is it better to consolidate or to pay each loan accordingly? Your thoughts? Thanks.