Can you refinance Sallie Mae student loans?

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Sallie Mae is a private student loan servicer offering student loan options for parents, undergraduate students, graduate students, and those enrolled in career training programs or trade schools. Holding a Sallie Mae private student loan yields some benefits and drawbacks, though some borrowers choose to refinance their loan with another lender to secure a lower interest rate.

Let’s look at how Sallie Mae loans can be refinanced, why it might be a good idea, what borrowers should consider, and how to compare multiple loan options before refinancing your student loans.

  • Can you refinance student loans with Sallie Mae?
  • Should I refinance my Sallie Mae loans?
  • Things to consider before refinancing
  • How to refinance Sallie Mae loans
  • Should you refinance Sallie Mae loans?
  • Compare multiple options when refinancing

Can you refinance student loans with Sallie Mae?

You can refinance a student loan in two ways: through your current lender or through a different lender. Some lenders allow you to refinance your student loans with them; unfortunately, Sallie Mae does not allow borrowers to refinance their student loans.

Since Sallie Mae doesn’t offer student loan refinancing services, borrowers interested in refinancing need to look to another lender. Each lender will offer different interest rates, terms, and incentives for eligible borrowers, which is why it’s important to weigh all your options before refinancing.

Should I refinance my Sallie Mae loans?

Whether or not you should refinance your Sallie Mae loans depends on your circumstances.

But generally, you will find a few good reasons to refinance your student loans, particularly those held by private servicers like Sallie Mae, including:

  • Lowering your monthly payment to help you manage your finances better
  • Pay less over the lifetime of the loan depending on interest rate and payoff terms
  • Combine multiple loans into a single payment that’s easier to keep track of
  • Work with only one lender, as opposed to keeping in contact with multiple companies
  • The ability to have a cosigner, which could help you qualify for better terms or interest rates
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Another advantage of refinancing Sallie Mae student loans is that you won’t risk losing any federal student loan protections or benefits. Because Sallie Loans are already private loans, they aren’t eligible for any federal benefits.

Before taking the steps to refinance, make sure that your student loans are serviced by Sallie Mae, not Navient. This is a point of confusion for some borrowers because Navient is a company created by Sallie Mae. It’s technically a separate brand and used to have a government contract to service federal student loans.

To confirm who holds your loans, contact your student loan servicer directly.

Things to consider before refinancing Sallie Mae student loans

One of the biggest reasons why you may not want to refinance your Sallie Mae student loan is that you may lose any benefits tied to the existing loan. Although Sallie Mae loans aren’t eligible for any federal student loan forgiveness programs, the company may offer benefits to certain borrowers or loan types.

For example, Sallie Mae caps interest rates at 5% for full-time, active duty members of the United States Armed Forces. The Servicemembers Civil Relief Act is a federal law that caps interest rates at 6% – Sallie Mae extends a benefit that’s lower than federal requirements.

Here are a few other considerations to weigh before refinancing a Sallie Mae student loan:

You’ll have to work with another lender

Because Sallie Mae doesn’t provide refinancing services, you’ll have to work with another lender.

Pros:

  • You may get a lower fixed rate or better terms.
  • They may offer unique benefits to some borrowers, particularly those who refinance.
  • You still won’t risk losing any federal benefits because no private student loans are eligible.

Cons:

  • You may be given a variable interest rate that changes, and potentially increases, over time.
  • They may not offer any benefits or incentives for borrowers refinancing.
  • You may not qualify for certain refinance loans without a cosigner.

You may need a cosigner

A cosigner is someone who also agrees to be legally and financially responsible for your student loan. Cosigners are often required if the borrower has low or no credit history.

Pros:

  • A cosigner’s positive credit history could help you secure a lower refinance rate.
  • A cosigner like a parent or family member will likely help you remember to pay your monthly bill and keep up with any changes, as a missed or late payment negatively impacts them as well.

Cons:

  • Using a cosigner means you might harm their credit score if you accidentally forget to pay your monthly minimum payment on time.
  • Even with a cosigner, it doesn’t guarantee that you’ll get the lowest refinance rate, or even approval from all lenders.
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Are you trying to lower your student loan monthly payment?

Many people refinance specifically to lower their monthly student loan payment. This can be helpful for borrowers who are struggling to afford their monthly payments based on their current income.

Pro:

  • A lower monthly payment may make you more financially comfortable as you repay your loans.

Con:

  • A lower monthly payment might mean a longer repayment term, which means you might ultimately pay more than necessary in interest over the lifespan of the loan.

Are you trying to lower your interest rate?

Securing a lower interest rate is another reason borrowers opt to refinance their loans. A lower interest rate could help you spend less overall.

Pros:

  • A lower interest rate could create a lower monthly payment.
  • A good or excellent credit score could give you the best rate available.
  • A variable interest rate may decrease over time, saving you money.

Cons:

  • A poor or fair credit history might not make you eligible for the lowest rate.
  • Making only the minimum monthly payment, even with a lower interest rate, will still cause you to pay more for the overall loan by the time it’s paid in full.
  • A variable interest rate may increase over time, costing you more money.

You may lose some benefits

Sallie Mae offers borrowers benefits, some of which other lenders may not. Refinancing with another lender may cause you to lose these benefits.

Pros:

  • It might be a nonissue because the benefits available from Sallie Mae may not be applicable to you from the start.

Cons:

  • Although benefits may be minimal, any money saved is helpful. Foregoing benefits may raise your overall expenses.

How to refinance Sallie Mae student loans

Technically, you can refinance all types of student loans, but that doesn’t mean the process for each is exactly the same. For instance, federal student loans cannot be refinanced through the federal government, but they can be consolidated with other federal loans.

Private student loans can be refinanced with other private lenders. Federal student loans can also be refinanced through private lenders, which turns them into a private loan. They can also be combined with private student loans, like Sallie Mae loans, in a single refinance option.

Keep in mind:

Here are the steps to take to refinance your Sallie Mae student loans.

Collect your current loan information

First, you need to collect information related to all your student loans that you want to refinance. You can access this information online through your servicer’s website, or you can contact your lender by phone. You’ll want all information associated with the loans, including interest rate, current balance, your payoff term, and if you have any cosigners.

Research and compare lenders

Next, you should research and compare lenders. Comparing rates from multiple lenders, including those online and at any banks or credit unions you might belong to, improves your chances of finding the best rates, terms, or incentives to refinance.

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Another reason to compare lenders is that you can learn about helpful information, such as what credit scores they typically prefer. You can then wait to refinance until you improve your credit score and try to get the best rate possible.

Get prequalified

When you complete and submit a refinance application, a hard credit check occurs. These inquiries can negatively impact your credit score; applying for multiple refinance loans can damage your credit, which is why prequalifying is a good idea.

Many lenders allow you to explore and compare student loan refinancing rates without affecting your credit score.

Consider a cosigner

If you’re having trouble prequalifying for a low rate, or if you think your credit history will make it difficult for you to secure a refinance loan, you may want to consider a cosigner. Your cosigner will be legally and financially responsible for your loan, so consider this option very carefully.

Get rate quotes and loan terms

If you’ve secured a cosigner, it’s time to investigate your loan options again. See what rate quotes and loan terms you’re eligible for with a cosigner.

Complete an application

Choose the lender that best fits your financial needs and fill out the application as soon as possible. Some applications may take a few business days to be approved.

Continue to make payments while you wait for the transfer

Even though you’ve been approved for the refinance loan, it might not transfer over immediately. Make sure you’re continuing to make your monthly payments, or more, as you wait for your new loan. Always err on the side of caution: it’s better to accidentally pay your monthly minimum twice than miss a single payment.

Should you refinance Sallie Mae student loans?

If you’re unsure if you should refinance your Sallie Mae student loans, there’s a lot to consider. This decision can be determined by acknowledging how refinancing will impact you both now and in the long run.

Yes, you could benefit from refinancing your Sallie Mae student loans if:

  • You’re eligible for a lower interest rate
  • If you’re interested in shortening your loan term
  • If another servicer is offering benefits that can save you money

No, you may want to reconsider refinancing your Sallie Mae student loans if:

  • You’re unable to secure a lower interest rate with your credit score
  • You only qualify for a variable interest rate
  • You’re unable to secure a cosigner to help you qualify

Ultimately, each borrower needs to do what is best for their financial future. Just be sure to weigh all your options and see if you can save by comparing multiple options.

Compare multiple options when refinancing student loans

Each student loan refinance lender will base your rates and terms on your specific financial background. These lenders also have their own parameters for assessing who is eligible for certain benefits. By comparing multiple loan options, you can evaluate which companies may offer the rates, terms, and benefits that are most useful to you.