You Can Refinance Sallie Mae Student Loans — Here’s How

How to refinance Sallie Mae loans (student loan refi)
How to refinance Sallie Mae loans (student loan refi)

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This article first appeared on the Credible blog.

Sallie Mae once allowed its borrowers to consolidate their student loans — however, it ended this service in 2008 after loan consolidation was no longer profitable for the company.

While you can’t consolidate your Sallie Mae student loans anymore, you do have other refinancing options available. Credible makes it easy to compare your prequalified rates from our partner lenders in two minutes.

How to refinance Sallie Mae student loans

If you want to refinance your Sallie Mae loans, you’ll need to consider another lender that offers refinancing. Here’s how to refinance student loans with a different lender:

  1. Shop around and compare lenders. Be sure to do your research and compare as many refinancing lenders as possible to find the right loan for you. Consider not only interest rates but also repayment terms and any fees charged by the lender.

  2. Pick your loan option. After comparing lenders, choose the loan option that best fits your needs.

  3. Fill out the application. You’ll need to complete an application and submit any required documentation, such as pay stubs or tax returns.

  4. Manage your payments. If you’re approved, your old Sallie Mae loans will be paid off with your new loan. Make sure to keep making payments on your old loans until everything is processed with your new lender. After this, you might also consider signing up for autopay — this will help you keep track of your payments and might even qualify you for a rate discount, depending on the lender.

Tip: If you want to refinance student loans with bad credit, you might have a hard time qualifying. In this case, you might consider adding a creditworthy cosigner to your application to help you get approved. Even if you don’t need a cosigner to qualify, having one could get you a lower interest rate than you’d get on your own.

If you’re ready to refinance student loans, remember to consider as many lenders as you can to find the right loan for you.

Should you refinance your Sallie Mae student loans?

Whether or not refinancing your Sallie Mae student loans is right for you will ultimately depend on your individual circumstances.

Here are a few scenarios when refinancing could be a wise choice:

  • You’ll get a lower interest rate. If you can lower your interest rate, you’ll likely save money on interest charges over time. This could also help you pay off your loan faster. If you choose to refinance, you’ll need to decide between a fixed- or variable-rate student loan — a fixed rate will stay the same while a variable rate could fluctuate over time and possibly go up in the future. Also keep in mind that you can refinance more than once if you can get a better interest rate in the future.

  • You want a lower monthly payment. If you’re struggling with your payments, refinancing to a longer term could reduce how much you owe each month. Refinancing for a lower monthly payment could also help reduce your debt-to-income (DTI) ratio. Just keep in mind that a longer repayment term will mean paying more in interest over the life of your loan.

  • You want to combine multiple loans into one. If you’re like most borrowers, you’ll probably have several loans to manage by the time you leave school. Refinancing can help you simplify your repayment by combining all of your loans into a single loan with only one payment to worry about.

Keep in mind: Because Sallie Mae student loans are private, you won’t be losing any protections by refinancing with another lender. However, make sure your loans aren’t actually Navient student loans. While Navient took on some of Sallie Mae’s private student loan portfolio in their split, it also began servicing the federal student loans that Sallie Mae once managed. So if you have Navient student loans, they might actually be federal and not private. You can refinance federal student loans, but you’ll lose your federal benefits and protections, such as access to income-driven repayment plans and student loan forgiveness programs.

Credible makes refinancing your student loans easy — you can compare rates from Credible’s partner lenders in just a few minutes.

Sallie Mae no longer offers student loan consolidation

Sallie Mae used to offer student loan consolidation for its federal student loan borrowers, making it easier for borrowers to manage their loans.

However, Sallie Mae ended this program in 2008, claiming the service was no longer making the company money. Sallie Mae also doesn’t offer private student loan refinancing.

However, keep in mind that if you had federal student loans with Sallie Mae that are now serviced by Navient, you still have the option of consolidating through a federal Direct Consolidation Loan.

What’s the difference between consolidating and refinancing student loans? While consolidation and refinancing are both ways to combine your student loans, they mean something different for federal and private student loans. Here’s how it breaks down:

  • Federal student loan consolidation: The only option for combining federal student loans is through a Direct Consolidation Loan. The interest rate on a Direct Consolidation Loan is the weighted average of the loans you consolidated. You also have the choice to extend your repayment term up to 30 years.

  • Private student loan refinancing: When it comes to private student loans, consolidation is simply another word for refinancing. If you refinance private student loans, you might get a lower interest rate and also have the option to shorten or extend your repayment term. Remember that you can refinance federal student loans, too, but this means you’ll give up your federal benefits and protections.

Compare multiple options when refinancing your loans

If you decide to refinance your Sallie Mae student loans, be sure to shop around and compare as many lenders as you can.

Remember to consider interest rates as well as repayment terms and any fees charged by the lender to find a loan that works for you. Depending on whether you’re approved for refinancing and the terms you get, you might be able to save money on interest and potentially pay off your loans faster.

You can use Credible’s student loan refinancing calculator to see how much you can save by refinancing your student loans.

About the author: Lindsay VanSomeren specializes in credit and loans. Her work has appeared on Credit Karma, Forbes Advisor, LendingTree, and more.

The post You Can Refinance Sallie Mae Student Loans — Here’s How appeared first on Credible.