How to Refinance Sallie Mae Student Loans

Kat Tretina

Sallie Mae is one of the largest private student loan lenders in the country, originating over $5.3 billion in private student loans in 2020. If you have Sallie Mae undergraduate, graduate, or career loans, you may be wondering if you should take advantage of low rates and refinance Sallie Mae student loans.

Unfortunately, Sallie Mae doesn’t allow its borrowers to refinance their loans, but you could qualify for a refinance loan from another lender.

Here’s what you need to know to refinance Sallie Mae loans.

What Is Sallie Mae?

Previously, Sallie Mae — formally known as SLM Corporation — was part of Navient, a loan servicer that services both federal and private student loans. In 2014, Sallie Mae legally separated from Navient, and became an independent private student loan lender.

Sallie Mae is one of the biggest private lenders in the nation. In just 2020, over 420,000 families used Sallie Mae to finance higher education. Sallie Mae loans make up 1.4% of education loans issued.

Unlike federal student loans, which usually don’t require credit checks, Sallie Mae student loans are credit-based and underwritten. To qualify for a loan, you typically need good to excellent credit and have enough income to comfortably afford your monthly loan payments.

Sallie Mae is based in Newark, Delaware, and it employs over 1,800 people. Sallie Mae is a publicly traded company; it trades on the NASDAQ with ticker symbol SLM.

What Student Loans Does Sallie Mae Offer?

Sallie Mae offers a wide variety of private student loans:

  • Undergraduate loans: Undergraduate students can borrow up to the total cost of attendance.
  • Graduate loans: Graduate and professional degree students can borrow up to the total cost of attendance.
  • MBA loans: If you are pursuing a master’s of business administration, Sallie Mae allows you to borrow up to 100% of the cost of attendance.
  • Law school loans:
  • Medical school loans: Students enrolled in eligible medical school programs can borrow up to 100% of the cost of attendance, and get up to 48 months of deferment during your residency and fellowship.
  • Dental school loans: Eligible dental school students can borrow up to the total cost of attendance and get up to 48 months of deferment during your residency and fellowship.
  • Bar study loans: If you are studying to take the bar exam, you can borrow up to $15,000 to cover bar exam costs and study materials.
  • Residency loans: You can borrow up to $30,000 to pay for board examination fees, travel, and moving expenses.
  • Parent loans: Parents who want to help their children pay for school can use parent loans to borrow up to 100% of their child’s cost of attendance.
  • Career training loans: If you are pursuing a trade certificate, you can borrow up to the total cost of attendance, including housing and meal expenses.

Can You Refinance Sallie Mae Private Student Loans?

Depending on when you took out Sallie Mae student loans and your credit score at the time, you may have high interest rates on your loans. If that’s the case, you may be interested in refinancing your private student loans.

Previously, Sallie Mae loan consolidation was offered for Federal Family Education Loans and other student loans. However, the Sallie Mae student loan consolidation program was discontinued in 2008 because it wasn’t profitable. 

While Sallie Mae refinancing is not an option, you can still refinance Sallie Mae student loans with another lender.

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5 Benefits of Refinancing Sallie Mae Student Loans

To refinance your student loans, you apply for a loan from a student loan refinancing lender. The new loan is designed to cover the amount of your existing debt, and it will have different terms than your current loans. Depending on your credit and which loan term you choose, you could qualify for a lower rate, longer repayment term, and a smaller monthly payment.

If you have other student loans, such as federal loan or private loans from another lender, you can consolidate them together when you refinance so you only have one loan to manage.

There are many advantages to refinancing Sallie Mae student loans:

1. Take Advantage of Today’s Low-Interest Rates

Some Sallie Mae borrowers may have very high interest rates on their loans. The company’s undergraduate loans can have interest rates as high as 12.59%. With such a high rate, interest can accrue quickly, causing your balance to grow.

By refinancing your loans, you can take advantage of today’s low rates. Now is an exceptionally good time to refinance since interest rates have reached historic lows. Fixed rates starting at 2.55% and variable rates starting at 1.99%.

How much could you save? Consider this example.

Henry had $30,000 in student loans at 12.59% interest and a 10-year repayment term. By the time he paid off his loans, he paid $22,885 in interest.

Henry decided to refinance his Sallie Mae loans and qualified for a 10-year loan at 7% interest. Over the life of his repayment term, he paid $11,799 in interest charges. By refinancing his loans, Henry saved $11,086.

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2. You Can Reduce Your Monthly Payments

If you’ve been stressed over your loan payments, refinancing can give some relief. When you refinance your loans, you can qualify for a lower interest rate. However, you can also extend your loan term; some lenders offer terms as long as 20 years. With either approach, you can reduce your monthly payment, freeing up money to pursue your other goals.

For example, Henry’s minimum payment on his original loan was $441 with a 10-year repayment term and 12.59% interest rate. By refinancing and securing a 7% rate and 10-year term, his monthly payment drops to $348, a savings of $92 per month.

If he opted for a longer repayment term, he could lower his Sallie Mae student loan payments even more. If Henry qualified for a 15-year loan at 9% interest, his new payment would be $304 per month — a $136 savings from his original payment.

With a longer term, you’ll likely pay more in interest charges. However, you may decide that the drawback is worth it to have lower Sallie Mae student loan payments and more cash flow. Having some extra financial wiggle room can give you more peace of mind.

  Original Loan Refinanced Example #1 Refinanced Example #2
Loan Amount $30,000 $30,000 $30,000
Loan Term 10 Years 10 Years 15 Years
Interest Rate 12.59% 7% 9%
Minimum Monthly Payment $441 $348 $304
Total Interest $22,885 $11,799 $24,770
Total Paid $52,885 $41,799 $54,770

3. You Can Accelerate Your Debt Repayment

If you refinance your Sallie Mae student loans and qualify for a lower interest rate, you can use that lower rate to accelerate your repayment and get out of debt faster.

For example, let’s say Henry refinanced his loans and qualified for a 10-year loan at 7% interest. With those terms, his minimum monthly payment is $348 per month. However, Henry wants to pay off his debt as quickly as possible, so he pays $50 extra every month.

With the lower interest rate and increased payments, Henry paid off his loans 20 months early, and saved over $2,000 in interest.

By eliminating your student loans ahead of schedule, you can free up money for your other financial priorities. Once your debt is gone, you can boost your retirement savings, save a down payment for a home, or enjoy that dream vacation to Europe.

4. You Could Get a Lender With Better Service

If you’ve had issues dealing with Sallie Mae as your loan servicer, you’re not alone.

According to the 2020 Consumer Finance Protection Bureau’s Student Loan Ombudsman Report, Sallie Mae received 145 complaints between September 2019 and October 2020, the second-highest number of any private student loan lender. In fact, the complaints submitted against Sallie Mae make up 9% of all complaints submitted about private lenders.

By refinancing your student loans, you can switch to another lender with a better reputation for customer service. A more responsive lender can help you understand your repayment options if you’re facing a financial hardship or have questions about your account.

5. You Can Remove a Cosigner from Your Loan

If you took out Sallie Mae student loans to pay for college, you likely had a cosigner apply for the loan with you. According to Sallie Mae, 88% of undergraduate borrowers have cosigners.

It’s easy to understand why; most college students don’t have much income, and their credit scores may be low. They typically need a parent, relative, or friend to cosign their application to qualify for a loan.

However, asking someone to be a cosigner is a huge request. If you fall behind on the payments, it can damage their credit score, and they could be on the hook for repaying the loan.

If having a cosigner is straining your relationship with a loved one, student loan refinancing can be a smart solution. You can refinance the loan solely in your name, eliminating the cosigner’s obligation for the loan. Going forward, it will only show up on your credit report, and you’re the only one that has to worry about payments.

3 Things to Consider Before Refinancing Sallie Mae Student Loans

While it can make sense to refinance Sallie Mae private loans, there are some drawbacks to keep in mind:

1. You’ll Have to Work With Another Lender

Since Sallie Mae doesn’t offer student loan refinancing, you’ll have to refinance your loans with another lender. That means getting used to a new servicer’s website, terms, and customer service. If you’ve had Sallie Mae as a lender for a while, the transition to a new lender might be intimidating.

2. You May Lose Some Benefits

When it comes to private student loan lenders, their policies and benefits can vary a great deal. Not all lenders offer perks like student loan forbearance or deferments if you return to school.

When you refinance your loans, you may not be able to take advantage of the type of benefits that Sallie Mae offers, including:

  • Disability discharge: If you become totally and permanently disabled, Sallie Mae will discharge your remaining loan balance. Not all refinancing lenders offer discharges in the cases of disability.
  • Student loan forbearance: If you lose your job or become ill, Sallie Mae allows you to postpone your payments for up to three months at a time, for a maximum of 12 months over the life of your loan. For a private lender, that’s a fairly generous forbearance policy, and not all lenders will be able to match it.
  • Deferments for returning to school: If you decide to go back to school, enroll in a graduate program, or begin an internship, you can defer your Sallie Mae loan payments until after the program ends. Refinancing lenders may not offer the same deferment policy, so check with the lender before submitting your loan application.

3. You May Need a Cosigner

Unless you are earning a solid income and have good to excellent credit, you may not qualify for student loan refinancing on your own. To qualify for a loan, you may need a cosigner on your application.

Adding a cosigner increases your chances of getting approved, and also can help you get a lower interest rate than you’d get on your own.

Asking someone to be a cosigner doesn’t have to be a permanent decision. Some refinancing lenders offer cosigner releases. After you’ve made a certain number of payments on time — it typically ranges from 12 to 48 on-time monthly payments — you can apply for a cosigner release. If you meet the lender’s underwriting criteria at that time, your cosigner can be removed from the loan.

Refinancing Sallie Mae student loans to a lower rate is often a no-brainer!

If you can qualify for a lower interest rate by refinancing Sallie Mae student loans, you can save big without any major drawbacks.

Takes 2 minutes • No impact on credit

How to Refinance Sallie Mae Student Loans in 5 Steps

If you decide to refinance your Sallie Mae private loans, you should know that the process is fairly simple. You can typically submit a student loan refinance application in just a few minutes, and receive a decision the same day.

To get started, follow these five steps:

1. Collect Your Current Loan Information

To refinance Sallie Mae loans, you’ll need to provide the refinancing lender with information about your existing accounts. To streamline the process, collect your loan information ahead of time. You typically need the name of your loan servicer, your existing balance, and your loan account numbers. If you’re not sure where to look, download your most recent loan statement; that will have all the information you need.

2. Gather Supporting Documentation

When completing the application, lenders will typically ask you for your Social Security number, driver’s license or other government-issued identification, contact information, employer contact information, and income. You may also have to provide proof of income, such as your pay stubs, a W-2 form, or past tax returns if you’re self-employed. You can save time by gathering those documents ahead of time.

3. Get Rate Quotes

Interest rates, loan terms, and lender policies vary by lender, so it’s a good idea to get multiple quotes for student loan refinancing. Many lenders allow you to get a quote with just a soft credit check, which doesn’t impact your credit score.

When you get loan quotes, here are some key things to consider:

  • Interest rate types: Some lenders offer both fixed and variable-rate loans. Variable-rate loans can be appealing because they are usually lower than fixed interest rates, but they can fluctuate over time and cause your payment to change. If you prefer a reliable monthly payment that never changes, you may be better off with a fixed-rate loan.
  • Monthly payment: When looking at loan offers, make sure you can comfortably afford the minimum monthly payment. Missing payments can damage your credit, and the lender may charge hefty late fees, so avoid falling behind as much as possible.
  • Total repayment cost: Look for how much you’ll repay over the loan repayment term. Since loan offers can vary in length and rate, the total repayment amount will help you compare how much each loan option will cost you.

4. Choose Your Loan Terms

When you get a rate quote, you can usually adjust the loan term to meet your needs. A longer loan term can be tempting because it will give you lower Sallie Mae student loan payments. However, think twice before opting for a loan of 12 to 20 years.

Lenders typically charge higher interest rates on longer loans. Even though you’ll have a smaller monthly payment, the higher rate and longer term can make you pay much more in interest charges than you would with a shorter loan term.

In general, lenders save the lowest interest rates for borrowers who choose shorter loan terms. To get the lowest possible interest rate, choose a term of five to eight years in length. Your monthly payment will be higher, but you’ll get a better interest rate and save more money — and get out of debt faster.

5. Submit Your Application

Once you’ve found a lender, interest rate, and loan term that works for you, you can move forward with the application. The lender will ask you for your personal information, employment and income, and details about your existing student loans.

If you plan on applying with a cosigner, most refinancing lenders have cosigners fill out and submit their own applications.

When you submit your application, the lender will perform a hard credit check. A hard credit inquiry can affect your credit score, but the impact should be nominal.

After you submit your application, you should receive a decision relatively quickly. Some lenders will issue you a response within minutes, while others may take a day or two to verify your information.

If you’re approved, continue making payments on your existing student loans until the refinancing lender notifies you that the loans have been paid off. It can take several weeks for the refinancing loan to be disbursed, so keep making your minimum payments to avoid late fees or damage to your credit.

If you’re denied for student loan refinancing at this time, don’t get discouraged. The lender will send you a letter notifying you of the reason you were denied, such as having too much debt or too low of a credit score. If that’s the case, you can work on improving your finances and boosting your credit to make yourself a more attractive refinancing candidate later on.

And That’s How You Lower Sallie Mae Student Loan Payments!

The process to refinance Sallie Mae student loans may seem daunting at first, but Purefy’s Compare Rates tool makes refinancing easy. Now that you have a better idea of the steps required and what to look for when refinancing, you can begin to explore options. 

Managing Your Student Loan Debt

If you have Sallie Mae student loans, refinancing your debt can be an excellent way to secure a lower interest rate, reduce your monthly payment, or pay off your loans ahead of schedule. If you’re looking for the best way to refinance Sallie Mae loans, you should shop around and get quotes from multiple lenders first.

While you could manually shop for a lender on your own, Purefy has a simpler solution: you can use our quick and easy Compare Rates tool.

With this tool, you can enter some basic information about yourself and your current loans. Purefy will show you rate quotes from top student loan refinancing companies, allowing you to compare rates at one time without affecting your credit. The tool will also help you calculate your student loan refinancing savings with each option, helping you make an informed decision when you pick a lender.

Still need help? Consult with a Purefy Student Loan Advisor. You can schedule a free one-on-one consultation and get detailed information about refinancing, personalized assistance through every step of the application, and have a real person answer all of your questions.

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Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. Interest rates current as of 01/01/2023. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

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3 SoFi Rate Disclosure:

Fixed rates range from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Variable rates from 5.09% APR to 8.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

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Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.72% APR to 9.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 4.39% APR to 9.19% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

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Fixed Rate Loan Terms: 5 years/60 monthly payments, 7 years/84 monthly payments, 10 years/120 monthly payments, 15 years/180 monthly payments, or 20 years/240 monthly payments. Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. This rate is expressed as an APR. Fixed APRs range from 6.94% to 11.58% APR [low to high range with 0.25% auto-debit rate reduction]. Rates are subject to change without notice. Fixed rates will not change during the term. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan including a 0.25% auto-debit rate reduction. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. All estimates are based on information provided by you and are for informational purposes only, accuracy is not guaranteed and may not reflect actual rates or savings and do not constitute an offer of credit. Your actual rate, payment and savings may be different based on credit history, actual interest rate, loan amount, and term, including your cosigner [if applicable]. If applying with a cosigner, we use the higher credit score between the borrower and the cosigner for approval purposes. All loans are subject to credit approval.

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