Key takeaways

  • Sallie Mae offers private student loans and banking
  • Refinancing a Sallie Mae loan with another lender could result in a lower interest rate and monthly payment
  • You may want to hold off on refinancing if interest rates are higher or you have a lower credit score

Sallie Mae is the common name for the SLM corporation, a private bank best known for handling student loans. Previously, Sallie Mae used to service federal loans. But it split into two independent companies in 2014 — with one company becoming Navient.

Sallie Mae now exclusively offers private student loans to help college students pay for school. It has variable and fixed rates on loans. You may have applied for this loan after exhausting federal student loan options by filling out the FAFSA.

But can you refinance private student loans that are handled by Sallie Mae? Once you’ve graduated, you may have the chance to refinance Sallie Mae loans with another lender. Refinancing student loans can come with several benefits, but it’s not for everyone. Here’s what you should consider before you refinance your Sallie Mae loans.

How can I refinance Sallie Mae student loans?

If you have Sallie Mae student loans, you can refinance with another private student loan company, like a bank, credit union or online lender, that offers refinance loans. Here is how to refinance your Sallie Mae student loan:

  1. Start the refinance process by shopping around and comparing student loan refinance interest rates and other terms.
  2. Many lenders allow you to get prequalified before you apply. Prequalification doesn’t require a hard credit check, so it can give you an idea of what you qualify for and what your loan terms might look like — without impacting your credit.
  3. Once you find a lender you like, submit an application.
  4. If you’re approved, and you accept the loan offer, the lender will pay off your Sallie Mae student loans, and you’ll start making payments to the new lender.

Should you refinance your Sallie Mae student loan?

Here are some reasons why you might want to refinance your private student loans from Sallie Mae:

  • You qualify for a lower interest rate than what you’re paying right now.
  • You want to shorten your repayment term and pay off your loans faster.
  • You’re experiencing financial hardship and want to switch to a longer repayment term.
  • You’ve had a bad experience with Sallie Mae and want to refinance with a lender with good customer service.
  • You’re a parent who borrowed money on behalf of your child, and you want to transfer the debt to them.

Carefully consider your situation and why you’re thinking about refinancing. It’s best to wait to refinance until you have a solid credit score and income. While the minimum credit score requirements for refinancing can be in the mid-600s, for instance, having a higher credit score will give you the lowest rates.

The prequalification process can give you a good idea of what you qualify for based on your current credit and income situation.

What are the benefits of refinancing?

Refinancing your Sallie Mae student loans can have a positive impact on your student loan repayment plan. Here are some of the top benefits you may enjoy:

  • Lower interest rates: You may qualify for a lower interest rate, which can save you hundreds or even thousands of dollars on your loan. Refinancing is a particularly good idea if you have a variable rate but want to lock in a fixed rate when interest rates are low.
  • Payment flexibility: If you want to accelerate your repayment or reduce your payment with a longer term, you can’t shorten or extend your repayment term with your existing lender. With student loan refinancing, you could choose a repayment term from five to 20 years, depending on the lender. Whether you want to pay off your debt early or extend your term to lower your payment, refinancing allows you to make that choice.
  • Different features: Each lender has its own set of features that borrowers can take advantage of. If you find a lender that offers a benefit that you don’t get with Sallie Mae, refinancing and moving your debt to the new lender can give you access to what you’re looking for.
  • Offload debt: If you’re a parent who borrowed to help your child get through school, some refinance lenders allow you to transfer that debt to your child. Both parties will need to agree, and your child will need to be able to qualify to take on the debt on their own. If they don’t, you may need to co-sign the loan application, but it can still be a good way to offload that payment responsibility.

When should you not refinance your student loans?

There are also other situations when refinancing a private student loan would not pay off:

  • You have a poor credit score. If you have a lower credit score than when you applied or do not have a stable source of income, it could result in the application being denied or higher interest rates. If you’re behind on payments, that can also affect your ability to secure better loan conditions.
  • High interest rates. Interest rates can fluctuate, so if rates are much higher than the rate you are currently paying, it might not make sense to refinance.
  • Need a co-signer. If you need a co-signer and can’t find a reliable one, that might be another reason to avoid refinancing at this time.

As a general note, you should also avoid refinancing a federal student loan, as you may lose federal protections like deferment and forbearance.

Bottom line

Refinancing Sallie Mae loans can make it possible for you to save money, enjoy a little more control over your repayment plan and take advantage of features that you might not currently have. To determine if refinancing your loans is a good idea, start by looking at current student loan refinance interest rates and compare Sallie Mae’s features with those of other lenders.