Sallie Mae Loan Consolidation: All Your Loans In One Place?

Sallie Mae is a major player in the higher education sector, providing private student loans, savings accounts, credit cards, and financial tools and resources. While Sallie Mae does not refinance its own loans, it is possible to consolidate Sallie Mae loans with a private lender. Borrowers can refinance Sallie Mae loans with another lender, but it is important to note that refinancing comes with the loss of certain benefits.

Sallie Mae loans can be consolidated with a private lender

If you have Sallie Mae loans and are unsatisfied with the customer service or repayment terms, you can refinance with other lenders. While Sallie Mae does not refinance its own loans, you can refinance Sallie Mae loans with other lenders. Private student loans from Sallie Mae can be consolidated through a private lender, but the process is the same as refinancing.

Sallie Mae student loans offer some features that refinance lenders may not, so it is important to consider the benefits of refinancing. Sallie Mae lets you defer payments if you return to school or start an eligible internship, residency, or fellowship. It also offers a military deferment. Additionally, Sallie Mae has a Graduated Repayment Period that lets you make interest-only payments for 12 months. This option is not available after your first year of repayment. If your Sallie Mae loan has a co-signer, you can release them from their obligation after making 12 on-time payments.

If you plan to take advantage of any of these features, wait to refinance your loans or make sure your new lender offers similar benefits. Otherwise, there is little downside to refinancing Sallie Mae loans or refinancing private loans from any other lender. You can refinance your Sallie Mae loans with another lender, but you will need to be approved for a new student refinance loan first. In general, most lenders look for a credit score of 650 or higher to get approved, although the higher your credit score, the better your chances of getting the best rate.

If you are looking to refinance your Sallie Mae loans, you can consider lenders like SoFi, Credible, ELFI, and Earnest.

Federal and private loans cannot be combined in a federal program

Federal and private loans are fundamentally different. Federal student loans are generally the best starting point for most college students and their parents. They come with protections and benefits — like fixed interest rates, subsidies, and repayment programs — that can’t be matched by private lenders. Private student loans are educational loans offered by private lenders, like banks, credit unions, and online companies. They require a credit check, and your approval and loan terms are dependent on your creditworthiness.

Federal student loans are likely cheaper than private student loans, especially for undergraduate students who don’t have a stable source of income or a long credit history. Federal student loans also offer access to different loan forgiveness programs, such as Teacher Loan Forgiveness. Private lenders don’t offer student loan forgiveness programs, and most don’t offer income-driven repayment plans.

Sallie Mae offers fixed- and variable-rate private student loans. Borrowers cannot refinance loans directly with Sallie Mae, but there are other lenders that will allow you to pre-qualify without affecting your credit score.

If you are considering consolidating your federal student loans, there are a few things to keep in mind. Consolidation combines your loans and may result in a lower monthly payment. However, consolidation could also extend your repayment period, which would increase the total interest you would pay over the life of the loan. Additionally, if you are participating in an income-driven repayment (IDR) plan or seeking Public Service Loan Forgiveness (PSLF), consolidating your loans would cause you to lose credit for qualifying payments you’ve already made toward IDR forgiveness or PSLF.

Refinancing can lead to a lower interest rate

While Sallie Mae does not refinance its own loans, you can refinance Sallie Mae loans with other lenders. Borrowers cannot refinance loans directly with Sallie Mae, but there are other lenders that will allow you to pre-qualify without affecting your credit score.

The primary goal of most student loan refinancing is to lower your interest rate and monthly payment. For example, if you have an interest rate of 8.44% and owe $4,300, you'd pay $6,382 overall on a 10-year repayment plan. Refinancing at 5% would drop that total to $5,473, saving you roughly $900. You'd save more if you qualify for a rate lower than 5% or refinance Sallie Mae loans with balances larger than $4,300.

Refinancing student loans can reduce your monthly payment, giving you more room in your budget. The Federal Reserve cut interest rates three times in 2024, which could lead to lower refinance rates this year. Combining multiple loans into a single loan also simplifies your budget. You can also save thousands of dollars in interest over the life of the loan. For example, if you have $50,000 of remaining student loan debt with an interest rate of 7% and a monthly payment of $580, and 10 years remaining on your loan term, if you refinance for a 5.83% interest rate without changing your repayment term, you could decrease your payment by $29 per month and save $3,593 over the life of your loan.

However, when you refinance student loans, you lose any benefits tied to your existing loan. Sallie Mae student loans offer some features that refinance lenders may not, including payment postponements, temporarily reduced payments, and co-signer release. If you plan to take advantage of any of these features, wait to refinance your loans or make sure your new lender offers similar benefits.

Sallie Mae offers forbearance, deferment, and interest rate reduction plans

If you're experiencing financial difficulties, Sallie Mae offers forbearance, deferment, and interest rate reduction plans to help you manage your loan repayments. Here are the details:

Forbearance

Sallie Mae may be able to offer forbearance to postpone your payments during military service. To find out more about eligibility requirements, you can contact them via chat or phone.

Deferment

Sallie Mae offers deferment options that allow you to reduce or postpone payments under certain circumstances. These include returning to school, starting an eligible internship, residency, fellowship, or law clerkship, and military service. Smart Option Student Loan customers can apply for up to five 12-month deferment periods, while graduate loan customers can receive up to four 12-month periods. Interest is charged during deferment, which can increase the total loan cost.

Interest Rate Reduction Plans

Sallie Mae provides the Graduated Repayment Period (GRP), which lets you make interest-only payments for 12 months after your separation from school. This option is not available after the first year of repayment. Additionally, they offer a Reduced Payment Plan, which allows for six months of interest-only payments.

It's important to note that refinancing your Sallie Mae loans with another lender may result in losing any interest rate reduction programs you were eligible for. Therefore, consider your options carefully and consult with Sallie Mae to discuss your specific circumstances and explore the available solutions.

Borrowers can refinance with another lender

Borrowers can refinance their Sallie Mae loans with another lender, but Sallie Mae does not offer student loan refinancing. This means that if you have Sallie Mae student loans and want to refinance to a better rate and repayment term, you will have to find another lender.

Sallie Mae offers fixed- and variable-rate private student loans. The company 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.

If you want to refinance your Sallie Mae loans, you can 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 that if you refinance federal and private loans with a new private loan, you may lose out on federal benefits such as deferment, forbearance, and income-driven repayment plans. You may also lose payment flexibility and special benefits that were available through the individual lenders or the government.

Frequently asked questions