Private College Student Loan

Understanding interest vs. principal w/ Sallie Mae student loans?

I took four private student loans w/ Sallie Mae, the total of which came to around $50,000. I have been paying money on them for 4+ years now. My capitalized interest is (was?) around $5,500. My interest rate is at 3.25% and I was paying about $400/mo. for the first two years, $300/mo. for the previous two years. I have barely even dented my principal balance, so I don't know where the money has gone. Sallie Mae doesn't say anything about how much capitalized interest has been paid off... it just says how much goes toward the principal balance vs. interest each month. I also don't quite understand how Sallie Mae calculates the interest you owe on each loan each month. Do they calculate how much you owe in interest for the year and then spread it out over 12 months? If you can link me to some information (or simply answer) I would really appreciate it. Thank you.

Public Comments

1. It seems like you deferred payments on the loan, meaning you did not pay it back while you were in school. When you choose this option the interest continues to add up because you have to pay for that during college, just you deferred paying the loan amount. So it seems you had 5.500 worth of interest when it came time to start repaying the loan. So because you did not pay that interest seperately before it was time to start repaying the loan the interest got capitalized meaning that they took that large amount of interest and they added it to your loan amount which now gives you this way higher balance, so now as you start paying off the loan monthly your interest rate of 3.25% on that higher balance which really increased the amount you will repay over the life of your loan. So it seems to me your interest was added already to your loan amount (principle) and became part of that loan and now you are paying the interest on that higher principal which is why you seem to be getting nowhere. on.