Beware of SallieMae fine print regarding interest rates. If you use this company for financing your education BYER BEWARE! This is what is happening to my "CAREERTRAINING LOAN" (Private loan).
Original Loan Amount: $7,839.00
Outstanding Principal $7,649.13
at 8.25% interest rate.
But if you read further into the letter they (Sallie Mae) sent to me letter dated 01/10/06 received on 1/14/06 including detailed information as follows:
Unpaid Pricipal Balance: $7,649.13
Accrued Inerest to be Capitalized: 0.00
Total Principal to be paid: $7,649.13
Estimated Amount of Ineterest
to be paid during repayment: $5,407.72
Estimated Total Amount to be Paid: $13,056.85
I have quoted exactly what the letter has stated to me. In my promisary note with this private loan they cannot go beyond 8.25% interest it is capped.
The thing I cannot figure out is for what reason all the changes. The letter continues to state the following,
"We have changed the payment terms for your loans starred(*) below. Please note this change and make your future payments accordingly. Usually, terms change for one of the folowing reasons:
1. the period for which you postponed making your monthly payments (a deferment of forebearnce) is about to end,
2. you requested different payment amounts (which I never did).
3. Your repayment option has changed (never authorized them to make any changes to my account).
4. Your school separation date was updated to a date earlier than previously reported, or...
5. Your interest rate changed.
This payment schedule replaces all previous schedules for these loans. All the terms of your promissory notes remain in effect. We will send new invoices. Please note that the interest rate listed at the bottom of this letter is the current rate on your loan(s). If you have automatic debit (which I do not), we will debit your bank account for the new payment amount next month. Your payment schedule follows: this does not include any past due amounts."
number of payments Payment Amount Due Date
1 70.93 01/09/20
I have quoted the letter exactly.
IS THIS LEGAL FOR SALLIEMAE. THEY HAVE INFORMED ME IN WRITING, BUT HOW ARE YOU EVER SUPPOSE TO PAY THIS OFF IF THEY KEEP CHANGING THE TERMS FROM THE ORIGINAL CONTRACT? HOW DO I KNOW IF THEY HAVE BROKEN THE ORINIAL CONTRACT (PROMISORY NOTE) AGREEMENTS?
PLEASE HELP ME!
I want to pay off the debt, how can it be legal for a financial institution to turn a $7,000 loan into a $13,000 loan?
TO ALL STUDENTS FUTURE, PAST AND PRESENT.
READ ALL OF THE FINANCIAL AID PAPER WORK BEFORE YOU SIGN.
ASK FOR THE DISCLOSURE NOTE UP FRONT, DO NOT SIGN ANYTHING UNTIL YOU HAVE READ THE DISCLOSURE NOTE AND HAVE A LAWYER OR ACCOUNTANT READ IT OVER BEFORE YOU SIGN.
Learn from my experience.
Note, the consolidation process with Sallie Mae turned out fine, it is the private loan that has turned into the nightmare!
Buyer beware of private loans!
Someone please give me advice on this situation!