Sallie Mae once allowed its borrowers to consolidate their student loans — however, it ended this service in 2008.
While you can no longer consolidate your student loans through Sallie Mae, you do have other refinancing options available. Here’s how to refinance Sallie Mae loans (and how to decide if you should).
How to refinance Sallie Mae 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. Because each lender will offer you different rates, terms, fees, and repayment plans, shopping around can help you find the best loan for your specific situation.
Many lenders also allow you to prequalify without affecting your credit score. Simply input a few pieces of personal information on the lender’s site to see estimated rates and terms that you might qualify for. While these are just estimates, it can give you a better sense of what each lender has to offer.
2. Submit an application
After comparing lenders, you’ve hopefully found the loan option that best fits your needs.
When you’re ready, complete a formal application on the lender’s site. At this point, most lenders will perform a hard credit check. You’ll also submit any required documentation, such as recent pay stubs and information about the loans you’re refinancing.
3. Manage your payments
If you’re approved, your new lender will pay off your old Sallie Mae loans directly. But make sure to keep making payments on your old loans until everything is processed with your new lender. Once you receive notice that your old loans are paid off, you can begin making payments to your new lender.
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 cosigner with good credit 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.
All APRs reflect autopay and loyalty discounts where available | LightStream disclosure | SoFi Disclosures | Read more about Rates and Terms
Should you refinance your Sallie Mae student loans?
Whether or not refinancing your Sallie Mae student loans is a good idea will ultimately depend on your individual circumstances. A student loan refinancing calculator can help you compare costs on your new and old loans.
Here are a few scenarios when refinancing could be a wise choice:
- You can get a lower interest rate: If you can secure a lower 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 never change, while a variable rate could fluctuate over time — and possibly go up in the future.
- You want a lower monthly payment: If you’re struggling with high 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 ratio (DTI). Just keep in mind that a longer repayment term likely means 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 debt into a single loan with only one monthly 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. You can also 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.
Learn More: Private Student Loan Forgiveness Alternatives
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. 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 were later transferred to Navient or elsewhere, 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. Doing so won’t save you money, as the interest rate on a Direct Consolidation Loan is the weighted average of your original loans. But depending on your circumstances, this process can extend your repayment term up to 30 years as well as qualify you for certain repayment plans.
- 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 or choose 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.
