Sallie Mae Offers Tips, Tools for Successful Student Loan Repayment

(BUSINESS WIRE)--Another important milestone is approaching for last spring’s college graduates – at least those who took out student loans. As the end of the six-month, post-school student loan grace period approaches, Sallie Mae offers tips and tools to help newly minted alumni begin student loan repayment and build a healthy credit history.

“I was able to pay down part of the principal balance of my loans every month, and at one point, I even increased my monthly payment,” said Sallie Mae customer, Coelise Martin Taleb, now a registered nurse. “I also want to buy a house one day and realize that good credit is the way to accomplish this goal.”

In addition to a standard repayment plan that allows federal student loan customers to make level payments of principal and interest over a 10-year repayment term, Sallie Mae offers graduated repayment, extended repayment and income-sensitive repayment options to allow consumers to customize their federal student loan payments to suit their financial situation. To help make repayment even simpler, Sallie Mae gives customers the convenience of one bill for all of their Sallie Mae-serviced loans, including their private loans, so they can make a single monthly payment.

Sallie Mae offers these 5 tips to help customers get off on the right path for student loan repayment:

Automatic debit: Set up monthly loan payments with automatic debit as an easy way to make on-time payments. Your monthly student loan payments are electronically deducted from your checking or savings account, saving you time and stamps.

Run the numbers: Sallie Mae's Loan Repayment Calculator estimates the monthly payments and total interest costs under the different repayment plans available. Before selecting a repayment plan, run the numbers and see which repayment plan gives you a monthly payment that fits into your budget.

Link your loan to Upromise: Join Upromise, then link your Sallie Mae loan account to your Upromise account and use your Upromise rewards to transfer savings automatically to help pay down your eligible Sallie Mae student loans. Upromise helps students and families save money for education expenses by earning rewards on everyday purchases from participating companies. Visit www.SallieMae.com/upromise to learn more.

Stay in touch: Immediately notify your student loan servicer(s) of any change to your name, address, telephone number, employer, or Social Security number. This will ensure that you receive all communication from your loan provider and that you are aware of your payment amount, payment due date and repayment options.

Prepay or pay extra when possible: You may prepay your loans in part or in full at any time without penalty. This will lower the overall cost of the loan. Adding a little extra to each monthly payment can help.

“I was so proud of the fact that I had paid off my student loan, I placed a copy of the ‘Congratulations’ letter from Sallie Mae on the wall of my cubicle,” said Angelique Tellis from Lafayette, La., a Sallie Mae customer who recently paid off her student loan. “For me, the key to paying off my loan faster was to add a little extra to the payment each month.”

A recent study by Sallie Mae and Gallup on “How America Pays for College” found that the median monthly payment that students with loans expected to pay once they began repayment was $200. Respondents, however, offered a wide variance of estimates, especially for similar loan values.

Sallie Mae’s new Education Investment Planner can help students and families more accurately forecast their monthly student loan payments. The free tool, available online at www.SallieMae.com/plan, enables families to estimate the total cost of a college degree, build a customized plan to pay for college, forecast monthly student loan payments, and even estimate the salary a graduate would need to keep repayment of student loans manageable.

In addition, the Education Investment Planner educates users on debt-to-income ratios and offers debt management guidance as part of Sallie Mae’s commitment to helping families understand the total cost of college and how to pay for it without going beyond their means. A general rule of thumb is that total monthly debt payments (including payments for student loans, credit cards, car, and housing, whether renting or buying) should be no more than 36% to 40% of one’s monthly gross income.

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