Hello All, Thanks in advance for any advice you may be able to offer. In November 2007 I entered into a loan agreement with SallieMae to fund my studies. Repayments were started last year but they're so unclear about how much I need to pay back each month. I don't have a scanner, so I've typed out the agreement (ouch) and wonder if anyone could offer advice as to its enforceability on the basis of lack of clarity (granted I'm no legal-eagle); I've underlined the bits that are confusing. This could just be my own ignorance but: -It's a fixed sum but the amount I pay varies based on LIBOR -No set amount for monthly repayments is included - only an obscure sentence about calculating interest and principal In their defence I do get a statement from SallieMae each month, but the amount they're asking for each time varies upwards and downwards - this is confusing because some of the payments are really outrageous; I work to a strict budget; and someone else is a guarantor for the loan. I've highlighted the bits below that seem confusing in the initial agreement and hopes this helps anyone who's got the patience to advise me. So please see below and many thanks for any advice you may be able to offer. Regards, Jonny 'Fixed Sum Loan Agreement Regulated by the Consumer Credit Act 1974 This agreement is made under the terms set out below between: US/WE/OUR: SALLIE MAE UK LIMITED, THE CORN EXCHANGE, FIFTH FLOOR, FENWICK STREET, LIVERPOOL, L2 7QL; AND YOU/YOUR: (my name) (my address) Key Financial Information The amount of credit (loan principal) is £14700 which will be advanced to you in one or more disbursements as set out in the disbursement schedule below. APR 13.4% (variable). The minimum term of this agreement is: 153 months (but you can settle this agreement without penalty at any time; see clause 5 of the Sallie Mae UK terms and Conditions). You must repay your loan in 144 consecutive monthly instalments of principal and interest. Your first repayment instalment is due 1 month after the completion of your 9 month payment holiday. Your payment holiday will end 9 months after you ave graduated from your programme of study, or your programme of study has otherwise come to an end, whichever is the earliest to occur. If your loan is made six (6) months or longer after you graduate/are awarded a dergree in your programme of study, drop below half-time enrolment, complete your programme of study, or your programme of study otherwise comes to an end, your first instalment will be due one month after the date of your first disbursement. Will will remind you of the frist instalment date and tell you the amount of your instalments approximately 45 days before your repayments are due to start. The amount of your instalments (which includes both principal and interest) will be calculated to equal the amount necessary to repay the unpaid principal and interest at the applicable Variable Rate (see Other Financial Information below) then in effect over the remaining number of months subject to a minimum monthly payment of £50. We will also send a monthly payment notice to you which will reflect any changes in the monthly payment amount due to changes in the Variable Rate. OTHER FINANCIAL INFORMATION The total charge for credit is: £19583.24 based on the loan principal being repaid in 144 instalments starting 10 months after your expected graduation date and includes interest of £19583.24 You must pay interest calculated on a day to day basis from the Disbursement Date on the outstanding balance until repaid in full at the rate of 6.5% per annum (the "Margin") over the 1-month Pound Sterling LIBOR Rate in effect on the second to last London business day before the end of the prior month (the "Current Index"), fixed at or about 11:00am London time and printed int eh Financial Times (listed under "Currencies, Interest Rates & Bonds" in the print edition) or in any other newspaper in general circulation and roudned up to the nearest one eighth of one percent (0.125%). The Disbursement Date is the date shown on the loan cheque(s). "London business day" is defined as any day that is not a Saturday, Sunday, public or bank holiday or other day on which banking institutions in London are authorised or ordered to close by law law or executive order. For example, the Current Index for January will be determined by the highest 1-month Pound Sterling LIBOR rate in effect on the preceding 30 December if both 30th and 31st are London business days. On that basis, your current interest rate ("Variable Rate") is 12.75% per annum (based on 1-month Pound Sterling LIBOR of 6.25% per annum). The Variable Rate will vary in line with changes to 1-month Pound Sterling LIBOR and will change monthly on the frist day of each month if the Current Index changes. Interest will (to the extent not paid) be added to the principal amount of the laon ("Capitalised Interest") semil annually beginning 5 months after the Disbursement Date (or 6 months after the earliest Disbursement Date if there is more than one disbursement) until your loan repayments begin, at which point any outstanding accrued interest will be capitalised again. The outstanding balance includes and Capitalised Interest and any fees, charges and costs due and not yet paid ("Other Amounts") which may be added, without notice, to the principal amount of the loan. This addition is called "capitalising". Since interest accrues on the outstanding balance, capitalising increases the total const of the loan. If you do not pay any interest during th eyear, the ffective annual interest rate of your loan, (taking into account capitalisation of interest) will be 13.4% per annum based on the current Variable Rate. If the 1-month Pound Sterling LIBOR Rate is not published, then the Current Index will be detrmined by using the immediately preceding published 1-month Pound Sterling LIBOR Rate. If the Current Index ceases to be available, we will choose a comparable substitute. In calculating the APR, no account has been taken of any variation of the 1-month Pound Sterling LIBOR Rate which may occur under this agreement. KEY INFORMATION If you reak the terms of this agreement and default on payment, we may charge you fo rany reasonable out-of-pocket fees, legal or other costs we incur inrecovering the debt (see clause 5 of the terms and conditions). We will also charge you: -an administration fee of £10.00, which will be chargeed on the fifteenth (15th) day after you fail to make any payment when due under this agreement or you otherwise break this agreement. -£10.00 for every direct debit ro cheque which is not paid when presented for payment. Please note that other charges applyy for additional services under clause 7 of the terms and conditions. Examples of the amount that would be payable if you chose to repay the outstanding balance at the following times are as follows (based on the loan amount and on loan principal being repaid in 144 instalments starting 10 months after your expected course completion date of Jul 31, 2008, and assuming that all payments are made on the due date for payment): Quarter of term: £15251.46 Half of term: £11938.26 Three Quarters of term: £7091.07 In calculating these amounts, no account has been taken of any variation which might occur under this agrerment and the amounts are, accordingly, only illustrative. MISSING PAYMENTS Missing payments could have severe consequences and make obtaining credit more difficult. IMPORTANT - READ THIS CAREFULLY OT FIND OUT MORE ABOUT YOUR RIGHTS The Consumer Credit Act 1974 lays down certain requirements for your protection which should have been complied with when this agreement was made. If they were not, we cannot enforce this agreement without getting a court order. This Act also gives you a number of rights. You can settle this agreement at any time by giving notice in writing and paying off the amount you owe under the agreement. Examples of indicating the amount you might have to pay appear in the agreement. If you would like to know more about your rights under this Act, contact either your local Trading Standards Department or your nearest Citizens' Advice Bureau. SIGNATURES ETC'