How to refinance Sallie Mae loans

FAN Editor

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If you have Sallie Mae student loans and want to refinance to a better rate and repayment term, you’ll have to find another lender.  (Shutterstock)

Sallie Mae is a major player in higher education, providing private student loans, savings accounts, and credit cards, as well as financial tools and resources. At one time, Sallie Mae provided federal consolidation loans to borrowers in addition to private student loans and refinancing, but as of 2008, it no longer does. 

If you have Sallie Mae undergraduate, graduate, or parent loans, and want to refinance them, the good news is you can still refinance your student loans. You’ll just need to do so with a different lender. Here’s how to refinance your Sallie Mae loans and how to decide if it’s the right option for you.  

Credible can help you refinance your Sallie Mae loans. You can compare student loan refinance rates from various lenders, all in one place.

How to refinance Sallie Mae student loans

If you want to lower your interest rate or change your repayment terms, you can refinance your Sallie Mae student loans in several ways: 

  1. Compare lenders. Comparing multiple lenders will help you find the best repayment terms and interest rates. You can also find out if a lender has any fees or offers any discounts.
  2. Pick the best loan for your needs. If you want to pay off your loans faster and can afford higher monthly payments, you may look at lenders that offer short repayment terms with no prepayment penalty. If you want to lower your monthly payment, you can refinance to a loan with a longer repayment term. Just keep in mind that you’ll pay more in interest over the life of the loan this way.
  3. Apply for the loan. You’ll typically need to provide personal information and documents, such as pay stubs and tax returns, when you apply for student loan refinancing. 
  4. Make payments on your new loan. If a lender approves you for a new loan, it’ll pay off your old Sallie Mae loans. Continue to make payments on your old loans until everything goes through with your new lender. Once it’s time to start repaying your new loan, consider setting up autopay, which can make managing your payments easier and may qualify you for a discount with some lenders.

If you have less-than-ideal credit, you may want to think about adding a cosigner to your application when refinancing. This can help you get approved for a lower interest rate on your student loan refinance.

Is refinancing your Sallie Mae student loans right for you?

With inflation, the average U.S. household will spend $5,200 more this year — that’s $433 more per month — compared to 2021 for daily necessities, according to Bloomberg Economics. That alone can make it difficult for many people to repay their student loans.

If you’re looking for ways to lower your monthly expenses, refinancing could be right for you. Consider refinancing your loans if you want to:

  • Lower your interest rate. If the interest rates on your current loans are higher than the current interest rates offered by other lenders, it may be time to refinance your loans. You’ll not only have a lower monthly payment, but you’ll also pay less over the life of the loan.
  • Combine multiple loans into one. Right now, you may be making multiple monthly payments on several loans. When you refinance, you combine multiple loans into one loan with a single monthly payment that’s easier to manage.
  • Get better repayment terms. If your monthly payments are too high, you may choose to refinance and lengthen the repayment term on your loan. If you can afford higher monthly payments and want to pay off your loan faster, you can refinance to a loan with a shorter repayment term.

With Credible, you can compare student loan refinance rates from multiple lenders in minutes.

Why did Sallie Mae stop offering student loan consolidation?

Sallie Mae used to be a loan servicer for both private student loans and federal consolidation loans, but stopped offering federal consolidation loans in 2008. 

In the past, student loan borrowers used Sallie Mae’s consolidation service to combine several federal loans into one Sallie Mae loan. By doing so, they could take advantage of a fixed interest rate and a single monthly payment. 

But when Sallie Mae split into two separate companies in 2014 — Sallie Mae and the Navient Corporation — it became a financial services company that specializes in originating private student loans. Meanwhile, Navient continued to focus on servicing federal government loans. 

Consolidation vs. refinancing

Since Sallie Mae no longer offers refinancing or consolidation, federal student loan borrowers can turn to Direct Consolidation Loans from the Department of Education. These loans let you consolidate multiple federal loans into one loan with a fixed interest rate and a single monthly payment. It’s important to note that you can’t consolidate private student loans with a Direct Consolidation Loan. 

If you have private student loans or a combination of private and federal loans, you may want to consider refinancing your loans into one private loan for a lower interest rate and better repayment terms. But keep in mind that if you refinance federal loans with a private loan, you lose out on federal benefits like Public Service Loan Forgiveness (PSLF) and income-driven repayment (IDR) plans

What to know about the Navient student loan settlement

As of Jan.13, 2022, if you’re one of the more than 400,000 borrowers who took out Navient student loans, you might qualify for some relief from your student loan debt. 

Multiple state attorneys general brought litigation against Navient alleging the company steered federal student loan borrowers who might qualify for an income-driven repayment plan into costlier forbearance. The suit also alleged that Navient knowingly made subprime private student loans to borrowers who had a high risk of default, according to the settlement statement

Under the settlement, around 350,000 federal loan borrowers will receive approximately $260 each, and Navient is required to cancel any remaining private student loan balances for roughly 66,000 students. 

You don’t have to take any action if you’re eligible for relief. On April 22, 2022, the administrator for the settlement mailed a postcard to all federal loan borrowers who qualify for a restitution payment. If you’re eligible for private student loan debt cancellation, Navient will send you a notice by July 2022, in addition to a refund of any payments made on the canceled loans after June 30, 2021. 

You can find out more about the details of the lawsuit and debt relief eligibility requirements on the Navient Multi-State Settlement website

The importance of comparing multiple lenders when refinancing

When refinancing your Sallie Mae student loans, compare multiple lenders to find the best choice to meet your individual needs. Consider interest rates, repayment terms, any discounts, and fees to get the ideal loan for your situation. Keep in mind, if you refinance federal and private loans with a new private loan, you lose out on federal benefits. 

Credible makes it easy to compare student loan refinance rates from various lenders and find the right loan for you.

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