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Manage & Pay Loans
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Loan Payment Allocation

It’s important to understand how your loan payments are allocated and applied. Every time you make a student loan payment, it helps pay down various portions of your loan. It typically is applied first to Unpaid Fees, then to outstanding Unpaid Interest, then to Current Principal.

Your payment may be allocated and applied differently, depending on the status of your loan and if you have multiple loans that are combined into one loan group. At this time Sallie Mae does not originate or service any federal student loans.


What kind of loans do you have?

Federal Loans

If you applied for financing using the Free Application for Federal Student Aid (FAFSA), you may have been offered a federal loan.

For information on how your federal loan payments are allocated and applied contact your loan servicer.

To find out more about which loans you have, log in to the National Student Loan Data System.

Private Loans

If you received a credit-based loan from a bank or other private lender like Sallie Mae, then you have a private student loan. Your payment allocation and application may be different based on how your loan is serviced.


Payment Allocations for Private Loans serviced by Sallie Mae

Learn how payments are allocated and applied to Unpaid Interest, Current Principal, Unpaid Fees, if applicable.


How a payment is applied to a single loan that is current

  • First, any Unpaid Fees are paid.
  • Second, any Unpaid Interest is paid.
  • Third, the remaining payment amount is applied to the Current Principal.
  • Unless you make your payments through automatic debit or instruct us otherwise, the overpayment amount will reduce the Current Amount Due on your next billing statement(s).

View a payment example

View a payment example


How a payment is applied to a single loan that is past due

  • First, any Unpaid Fees are paid.
  • Second, any Unpaid Interest is paid.
  • Third, the remaining payment amount is applied to the Current Principal.
  • Unless you make your payments through automatic debit or instruct us otherwise, the overpayment amount will reduce the Current Amount Due on your next billing statement(s).

View a payment example

View a payment example

Remember: If the payment doesn’t satisfy the Current Amount Due and Past Due Amount, a late fee may be assessed, and the Total Loan Cost will increase. Refer to the front of the billing statement for the dates to avoid late fees. If the loan is delinquent, it may be reported to the consumer reporting agencies.


How a payment is applied to grouped loans that are current

If you have multiple loans, we may automatically put them in a loan group. Each loan group has its own billing statement that shows all of the loans within that group. The borrower may request to have loans ungrouped at any time during the life of the loan. If you prefer a separate billing statement for each loan, please call us at 800-4-SALLIE (800-472-5543800-472-5543). Cosigners receive a separate billing statement for each cosigned loan.

  • The payment is allocated based on the Current Amount Due for each loan in a loan group — unless your payment is mailed with a separate piece of paper instructing us to do otherwise.
  • Once a portion of the payment is allocated to each loan, we apply it in the following manner:
    • First, any Unpaid Fees are paid.
    • Second, any Unpaid Interest is paid.
    • Third, the remaining payment amount is applied to the Current Principal.
    • If you make an overpayment, the remaining payment amount will be prorated based on each loan's Current Balance as of the date the payment is received less the Current Amount Due paid.
    • Unless you make your payments through automatic debit or instruct us otherwise, the overpayment amount will reduce the Current Amount Due on your next billing statement(s).

View a payment example

View a payment example


How a payment is applied to grouped loans that are past due1

If your payment is less than the Past Due Amount, loans at the oldest delinquency level will be paid first. Once all of the loans are at the same delinquency level, the remaining payment amount will be prorated according to each loan’s remaining Past Due Amount within that group delinquency level. This results in the delinquency level being the same for each loan in the group.

Once a portion of the payment is allocated to each loan, we apply it in the following manner:

  • First, any Unpaid Fees are paid.
  • Second, any Unpaid Interest is paid.
  • Third, the remaining payment amount is applied to the Current Principal.
  • If you make an overpayment, the remaining payment amount will be prorated based on each loan's Current Balance as of the date the payment is received less the Past Due Amount and Current Amount Due paid.
  • Unless you make your payments through automatic debit or instruct us otherwise, the overpayment amount will reduce the Current Amount Due on your next billing statement(s).

View a payment example

View a payment example

Remember: If the payment doesn’t satisfy the Current Amount Due and Past Due Amount, a late fee may be assessed, and the Total Loan Cost will increase. Refer to the front of the billing statement for the dates to avoid late fees. If the loan is delinquent, it may be reported to the consumer reporting agencies.


Request special payment allocation instructions for multiple loans

You can instruct us to allocate payments differently. Clearly write your instructions on a separate piece of paper included with your check. Once we allocate a payment to a specific loan or loans, payments are applied based on the terms of each loan's Promissory Note, usually first to Unpaid Fees, then to Unpaid Interest, and then to Current Principal. You may not designate a different method for applying payments. We cannot process instructions written on the check or remittance slip. Please note, third-party bill-pay services do not allow you to provide instructions. If you are using a third-party bill-pay service and would like to allocate your payment differently, please call customer service at 800-4-SALLIE (800-472-5543800-472-5543) to have your loans ungrouped.

View a payment example

View a payment example

 
 

1 When you have multiple payments for similar loan types, we may group them together in a "loan group," so you receive one consolidated statement and can make one payment to cover them all. You may request that your loans are ungrouped so that you receive separate statements by calling us at 800-4-SALLIE (800-472-5543).