How to Refinance a Sallie Mae Student Loan

Last updated 03/28/2024 by

If you have a private student loan with Sallie Mae and are struggling to make your payments, refinancing and lowering the interest rate may be the answer. We cover how you can refinance a Sallie Mae student loan.

Figuring out how to refinance a Sallie Mae student loan can be daunting, but don’t worry. The following guide will walk you through various options to make your payments possible.

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Interest rate reduction

Sallie Mae doesn’t refinance its own loans, but they may grant you an interest rate reduction to as low as 3%. If your current rate is substantially higher, this could significantly lower your monthly payments, without having to dig into refinancing.

To attempt for a rate reduction with Sallie Mae

Call and ask to speak with the collections department.
If you are behind on payments, explain why you are delinquent. Tell them that an interest rate reduction will help you become current.
If you are still current, explain that you fear you’ll soon become delinquent.
The rate reduction may only last 12 months, at which point you’ll have to renew it.

If Sallie Mae rejects your request, or if this interest reduction will not be enough, it is time to find other means to refinance your loan.

What is refinancing?

Let’s start with the basics: what is refinancing, and why would you pursue it? Refinancing is an option you should consider when you find yourself unable to make your monthly payments on a loan. When you refinance, you replace that loan with a new (ideally better) loan — one with better terms which make for more manageable payments. You then pay off your remaining balance with your new, more affordable loan payments.

How to refinance

If you can’t get Sallie Mae to give you an interest rate reduction, finding another private student loan lender may be your best option. Refinancing a Sallie Mae loan with another lender is easiest if you only have one student loan with Sallie Mae.

Private student loan lenders offer the options of fixed and variable interest rates. Variable interest rates may save you money upfront if the rate is lower than your existing loan. Fixed interest rates will stay the same for the length of the loan, which gives you more budget security.

Unlike federal student loans, which can take several weeks or even months to fund, private student loans usually fund very quickly. Get a loan with Upstart, for example, and you’ll have the money in your account within 24 hours of approval.

Applying for an online student loan is easy and can generally be completed in 15 to 20 minutes. Before logging on and refinancing your student loan, gather all of the necessary information and documents. Also take the time to make decisions about your refinancing goals.

Here are some of the top student loan private lenders to consider while refinancing your Sallie Mae loan.

Preparing to refinance your loan

To prepare for the loan application process, do the following

Ensure that your credit score is the best it can be.
A credit score of 670+ will qualify you for refinancing, and will make it easier to get a low interest rate. For instance, while SoFi offers low interest rates on student loans, they require that you have excellent credit.

Get proof of income.
Most student loan providers want to see that you have some sort of income. SoFi requires that you have a job or a verifiable job offer, and LendKey wants to see proof that you are paid at least $24,000 a year.

Gather your monthly expenses.
Be ready to tell the loan officer exactly how much you spend each month to live, including rent, food, utilities, credit cards, and student loans.

Have proof of graduation.
Some lenders will require a copy of your diploma.

Decide your refinancing goals.
Knowing exactly what you want before you begin negotiating a refinance is the best way to ensure that you end up with the best loan possible. Discover what you want by asking yourself the following questions.

Refinance a Sallie Mae Student Loan: Frequently Asked Questions

Do you want to lower your monthly payment?

Consider that doing this may lengthen your loan, which could mean you end up paying more in the long run. If your payments are truly impossible to make at the present, though, this may be your best immediate option.

When working to lower your monthly payment, should you opt for fixed or variable interest rates?

Fixed rates are generally safer. A variable interest rate can result in a lowered interest rate now, but it could mean a drastic increase later.

Do you want to lower your interest rate and decrease the length of repayment?

This is your best option if you want to pay the loan off more quickly. It will also mean paying less overall.

Do you just want to lower your interest rate?

You can keep the length of the loan the same but start paying less interest. This won’t get the loan paid off any faster, but you will reduce the overall cost of the loan.

Refinance a Sallie Mae Student Loan: The Bottom Line

When looking at a student loan lender, consider more than interest rate and length of the loan. Choose a lender that offers a grace period for repayment that starts after graduation. Also look for a lender that offers a relief plan should you find yourself in financial trouble and unable to make your payments. Some lenders have payment pause, while others allow you to make interest-only payments for an extended period.

If you get a student loan with Common Bond, for instance, you don’t need to start repayment until six months after you graduate. They will also pause payments if you lose your job.

Refinancing a Sallie Mae student loan takes some legwork. If you decide that refinancing is necessary, make sure to check out the best student loan refinancing companies out there.

Julie Bawden-Davis

Julie Bawden-Davis is a widely published journalist specializing in personal finance and small business. She has written 10 books and more than 2,500 articles for a wide variety of national and international publications, including Parade.com, where she has a weekly column. In addition to contributing to SuperMoney, her work has appeared in publications such as American Express OPEN Forum, The Hartford and Forbes.

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