Interest rates on Private Student Loans too High?!?! What do I do?!?
Asked by JsI have two private student loans and the interest rate in my opinion is outrageous. One is 12.25% and the 2nd is 18.125%. I pay $200 over the min. monthly payment amount. I am going to be calling the lender (Sallie Mae) in a day to get this straightened out. I feel I need to know if these interest rates are crazy, or am I?! I have heard that private student loans interest is based on your credit score (is that true?) I have a pretty good one . !! Any help?! Thanks. ;)
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Answered by Sallie Mae
Interest rates on your private loans are based on your credit history or that of your cosigner’s, if you have a cosigner. Your private loans’ interest rates are calculated using the Prime Rate, a short-term market interest rate, plus a margin. The Prime Rate is a variable rate, meaning it changes over time, and it is a market rate, meaning we do not set it. The Prime Rate is covered in most major newspapers, such as the Wall Street Journal, and is currently at 7.75 percent. Your loan's margin is fixed and would have been disclosed to you when you received your Sallie Mae loans. When you add the Prime Rate and your margin, you have your private loan's interest rate. If you are interested in trying to lower your private loan's interest rate, you may want to consider refinancing your private loans with a Private Consolidation Loan (PCL). In fact, 75 percent of our Private Consolidation Loan customers lower their interest rates when they refinance and obtain a Private Consolidation Loan. Sallie Mae advises customers to apply with a credit-worthy cosigner to lower their interest rate even further. You are welcome to contact our customer service team to see whether Private Consolidation is for you. The toll-free number is 866-380-5005. Customer representatives are ready to assist you Monday to Friday, 8 a.m.-11 p.m. Good luck!
Interest rates on your private loans are based on your credit history or that of your cosigner’s, if you have a cosigner. Your private loans’ interest rates are calculated using the Prime Rate, a short-term market interest rate, plus a margin. The Prime Rate is a variable rate, meaning it changes over time, and it is a market rate, meaning we do not set it. The Prime Rate is covered in most major newspapers, such as the Wall Street Journal, and is currently at 7.75 percent. Your loan's margin is fixed and would have been disclosed to you when you received your Sallie Mae loans. When you add the Prime Rate and your margin, you have your private loan's interest rate. If you are interested in trying to lower your private loan's interest rate, you may want to consider refinancing your private loans with a Private Consolidation Loan (PCL). In fact, 75 percent of our Private Consolidation Loan customers lower their interest rates when they refinance and obtain a Private Consolidation Loan. Sallie Mae advises customers to apply with a credit-worthy cosigner to lower their interest rate even further. You are welcome to contact our customer service team to see whether Private Consolidation is for you. The toll-free number is 866-380-5005. Customer representatives are ready to assist you Monday to Friday, 8 a.m.-11 p.m. Good luck!
