Sallie Mae offers private student loans to undergraduates, graduate students, and parents. If you’ve taken out Sallie Mae loans to pay for your education, you can – and probably should – refinance if it saves you money.
Borrowers can no longer refinance their loans directly with Sallie Mae. But you may be able to refinance with Navient, a student loan manager who was once part of Sallie Mae, if you’re already her client.
No matter who your repairman is, your best bet is to refinance student loans with the company that offers you the best deal.
Should You Refinance Sallie Mae Loans?
When you refinance student loans, you lose all the benefits of your existing loan. Sallie Mae student loans offer some features that refinance lenders cannot, including:
Deferments of payment. Sallie Mae allows you to defer payments if you are returning to school or starting an eligible internship, residency or scholarship. Sallie Mae is also offering a military stay.
Temporarily reduced payments. Sallie Mae has a phased repayment period that allows you to make interest-only payments for 12 months. This option is not available after your first year of repayment.
Co-signer press release. If your Sallie Mae loan has a co-signer, you can release them from their obligation after making 12 payments on time. This time frame is shorter than that offered by many refinance lenders.
If you plan to take advantage of any of these features, wait to refinance your loans or make sure your new lender offers a similar program. Otherwise, there is little downside if you refinance Sallie Mae loans or refinance private loans from any other lender.
While Sallie Mae only offers private student loans, she managed federal student loans until 2014 when Navient was founded. If you want to refinance pre-2014 Sallie Mae loans, check to see if they are federal or private before proceeding.
How Much Sallie Mae Loan Refinancing Could Save You
Sallie Mae offers both fixed and variable rate private student loans. Currently, its fixed rates are 4.25% – 12.59% and its variable rates are 1.13% – 11.23%.
Suppose you have an interest rate of 8.44% and owe $ 4,300, the average private undergraduate student loan debt according to data from the Institute of College Access & Success. You would pay $ 6,382 in total on a 10-year repayment plan. A 5% refinance would drop that total to $ 5,473, saving you about $ 900.
You would save more if you qualify for less than 5% or refinance Sallie Mae loans with balances greater than $ 4,300, like those of faculty of Law or medicine School, for example. Borrowers generally need a credit score of at least 600 and a stable source of income to refinance, or a co-signer who meets these criteria.