Considerations Before Consolidating Or Refinancing Student Loans
Whether or not you have Sallie Mae or other private loans, or are just considering applying for a Direct Consolidation Loan for your federal loans, its important to review your current payment plan and rates before consolidating loans. Ask yourself this: Will you save money overall, or will you wind up paying more over the life of the loan?
Late Student Loan Payments
You may be charged a late fee if you dont pay your loans Current Amount Due within 15;days after the Current Amount Due Date. The late fee amount is listed on your loans Disclosure and your billing statement.
If your student loan payments are late, you may also lose your eligibility for borrower benefits or repayment incentives. Late payments may also be reported to consumer reporting agencies, which could negatively impact your credit report.
Can You Negotiate With Sallie Mae
If you have been keeping up with your Sallie Mae student loan payments, then you need to be in default to negotiate. If you have student loan debts with Sallie Mae, I would not recommend settling them on your own. Instead, you should contact Navient to see if they can help you. Since student loan debts are private, those who seek Sallie Maes student loan relief cant rely on the advantages of federal programs.
When you default on a Sallie Mae loan, it can be very distressing. You might even face a lawsuit from the company. Thats where a debt lawyer can come in handy to help you settle the debt and help you come up with a plan to settle the debt or represent you in court.
You can also contact a certified student loan counselor, certified credit counselor or a professional debt negotiator with hands on experience. Some experienced counselors have negotiated with large private lenders such as Navient, KeyBank, Sallie Mae, Wells cargo among others.
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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, claiming the service was no longer making the company money. Sallie Mae also doesnt offer private student loan refinancing.
However, keep in mind that if you had federal student loans with Sallie Mae that are now serviced by Navient, you still have the option of consolidating through a federal Direct Consolidation Loan.
Whats the difference between consolidating and refinancing student loans?
- Federal student loan consolidation: The only option for combining federal student loans is through a Direct Consolidation Loan. The interest rate on a Direct Consolidation Loan is the weighted average of the loans you consolidated. You also have the choice to extend your repayment term up to 30 years.
- 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 and also have the option to shorten or extend your repayment term. Remember that you can refinance federal student loans, too, but this means youll give up your federal benefits and protections.
Our Student Loan Customers Benefit From
- Applying for a student loan only once to get the money needed for the entire school year
- Student loans that feature 100% coverage for all school-certified expenses like tuition, fees, books, housing, meals, travel, and even a laptop
- Multi-Year Advantage: Returning undergraduate and graduate school loan customers with cosigners have over a 90% approval rate, faster student loan applications, and the convenience of managing all private loans with one lender.
- No origination fee
- Competitive interest rates
- Multiple repayment options on loans for students
- 0.25 percentage point interest rate discount when enrolled in and making monthly payments by auto debit
- Free access to FICO® Scores, updated quarterly online
- 100% U.S.-based customer service teams
Public Service Loan Forgiveness
Called PSLF for short, this program allows you to get full forgiveness of your remaining balance after youve made 120 qualifying monthly payments. Youll also need to work full-time for a qualifying employer which can be a U.S. federal, state, local or, tribal government agency or an eligible not-for-profit organization.
If you qualify to have your federal student debt discharged, the amount is not considered income for tax purposes.
Best Student Loan Refinance Companies Of September 2021
- Best for No Fees: Discover Student Loans
- Best Repayment Options: CommonBond
- Best for Parent Loans: Laurel Road
RISLA offers competitive rates and borrower benefits including no application fees.;
Contact for minimum credit score requirements
Can only borrow $45,000 per year
The Rhode Island Student Loan Authority stands out from other student loan refinancing lenders because of its competitive rates and the substantial benefits it offers to borrowers.
Despite RISLA’s name, borrowers can refinance student loans that were used to attend colleges nationwide. You can refinance between $7,500 and $250,000. There are no application or origination fees. Term options include 5, 10, and 15 years. All refinancing loans have fixed interest rates, and the lender offers the following interest rates:
- Fixed rates: 3.29% to 5.84%
RISLA’s student loan refinancing program has a wide range of benefits that go beyond what you typically expect from private lenders. Its protections include:
Read the full review:RISLA Student Loans
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When Student Loan Refinancing Doesnt Make Sense
Im very cautious about recommending that folks refinance any federal loans to a private loan because of what youre giving up, Minsky says.;
There are a number of benefits and protections federal student loans may qualify for: death or disability discharge, default resolution, and deferment or forbearance options. Federal student loans can be eligible for repayment plans based on your income and loan forgiveness if you make qualifying monthly payments while working full-time for an eligible employer.
Thats a lot to give up and going that route would make sense only if you can drastically reduce your interest rate or pay off the loans quickly. Even then, Minsky recommends mitigating some of the risk by having a fully funded emergency fund and adequate life and disability insurance.
Instead of refinancing federal student loans, you can take advantage of the federal student loan consolidation program. When you consolidate federal loans you retain all the benefits, but the interest rate is a weighted average of the previous loans. It wont reduce your interest rate, says Mark Kantrowitz, vice president of research at savingforcollege.com, but it does have other benefits.
When Is The Best Time To Refinance My Student Loans
Before refinancing your student loans, make sure youre in a financially secure position to pay them back on time and have the credit score to qualify for competitive rates.
It can also be a good time to refinance when interest rates are low. Note that if interest rates drop, you can consider refinancing again for better terms.
Finally, make sure you dont need any federal plans or protections before you refinance. Once you refinance federal loans with a private lender, youll no longer have access to federal plans, such as income-driven repayment or federal forgiveness programs.
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Student Loan Consolidation Vs Refinancing
These terms are sometimes used interchangeably, but they do have some important distinctions. Sallie Mae consolidation is no longer offered for their private loans. However, students can refinance their Sallie Mae and other private student loans through another private lender or bank, which would then switch over the management of the new refinanced loan to that lender.
For federal loans, a Direct Consolidation Loan allows you to combine multiple federal student loans into one loan with a fixed interest rate. You might not receive a lower interest rate by choosing to consolidate your loans , but you will only have to make one monthly payment. Private student loans cannot be consolidated via a Direct Consolidation Loan.
Refinancing your student loans is another repayment option to consider. While Sallie Mae does not offer refinancing, other private lenders do, including SoFi. These companies essentially purchase your existing student loans and offer you a new loan to pay them off, with a new interest rate and new terms. Private and federal loans are both able to be refinanced into a private loan.
You can refinance just a single loan, possibly lowering the interest rate, or combine multiple loans to refinance your overall student loan debt. If you refinance federal loans, they become private loans in the sense that you will no longer be eligible for federal repayment plan benefits such as Income-Driven Repayment or Public Service Loan Forgiveness.
What To Know About Mortgage Points
Jun 4, 2021 Mortgage or discount points can increase your upfront closing costs but fortunate enough to be in a position to buy or refinance a home.
Oct 8, 2020 Paying mortgage points can save you money over the life of your home loan if you dont sell or refinance for many years, Randall says.
May 7, 2021 Points are a type of fee thats paid to your lender at closing. There are two types: Each point is equal to 1% of the amount youre borrowing.
Mar 8, 2021 Points may also be called loan origination fees, maximum loan charges You can deduct points paid for refinancing generally only over the;
Should You Refinance Sallie Mae Student Loans
If you have Sallie Mae student loans that are private student loans, refinancing can be a great financial option. You can save money, pay off student loans and repay debt more quickly.Remember, you should only refinance if you can get a lower interest rate, lower monthly payment or if you can change loan terms. Most borrowers refinance student loans to lower their interest rate. If these reasons fit your financial goals, then refinancing your Sallie Mae student loans could be a smart financial option.
Get A Cosigner If You Need One
You dont need a cosigner to get approved for student loan refinancing. However, a qualified cosigner could help increase your chances for approval and help you get a lower interest rate. A cosigner is someone who is typically a relative such as a parent, spouse or grandparent who will assume equal financial responsibility for your student loan after you refinance. The best cosigners have a good to excellent credit score and stable and recurring monthly income. The good news is that some lenders will allow you to release your cosigner from financial responsibility after you get approved for student loan refinance and meet certain requirements.
Insider Tip: If you do not have sufficient income, you can increase your chances for approval with a qualified co-signer who has a strong credit score and monthly income.
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What Does Navient Do
Navient, which operates independently from Sallie Mae, focuses on the enhancement of its customers financial success. In addition to servicing federal student loans, Navient is known for consumer lending and business processing solutions. It also offers private student loan servicing.
With Navient, people with federal loans have access to federal benefits like income-driven repayment plans, deferment or forbearance. Qualifying individuals can sign up for income-driven repayment plans such as Income-Based Repayment , Income-Contingent Repayment , Pay As You Earn and Revised Pay As You Earn plans. If you lose your job or go through a financial hardship, you can defer your payments or put them into forbearance, which allows you to postpone your payments without racking up late fees or entering into collection.
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Best For Spousal Loans: Penfed Credit Union
- Interest Rate: 2.89%+
You and your spouse can combine your student loan debt and streamline your payments with PenFed Credit Union.;
Refinance up to $300,000 of debt
Will consider combined income
Must meet minimum income amounts
Co signer may be required
No official forbearance policy
If you and your spouse both have student loans, you may want to combine your debt together. It will streamline your payments, so you have just one monthly payment and one loan servicer to remember.;
While most lenders will allow you to cosign your spouse’s refinancing application, the only lender that actually offers spousal loan refinancingwhere the loans are consolidated togetheris the PenFed Credit Union.
To determine your eligibility and to set your interest rates, PenFed will look at your combined income. If one person is a stay-at-home parent, this approach can be beneficial and help you get a lower interest rate than you’d receive on your own. For loans up to $150,000, the minimum income is $25,000, and, unless your income is at least $42,000, a cosigner with an income of $42,000 is required. For loans exceeding $150,000, either you or your cosigner must have an annual income of $50,000.
With PenFed, you can refinance between $7,500 and $300,000 of student loan debt. There are no application or origination fees. Loan terms range from 5 to 15 years, and there are variable and fixed interest rates. PenFed offers the following rates:
- Fixed: 2.89% to 5.08%
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Consolidate Credit Card Debt
If you have credit card debt, you can immediately lower your monthly payment through . When you consolidate credit card debt, you can get a lower interest rate by combining your existing credit card debt into a single personal loan. A personal loan has a fixed interest rate and typically has a repayment period of one to seven years. A lower monthly payment can help improve your chances to refinance student loans.
Our Criteria For Choosing These Lenders:
- Price. Saving money is the main priority in refinancing. The lenders on this page offer extremely competitive interest rates compared with others in the market.
- Ethics. In an industry that has had its share of challenges, these lenders have outstanding ethical standards.
- Customer;service. We only picked lenders that get great reviews for their customer service. Some have even won awards.
- Innovation. Many of these lenders are creating specialized products to make low interest rates available to more people.
- Perks. Yoga classes and wine-tastings. Trips to Ghana to build schools for local kids. Scholarship programs and entrepreneurial seed funding. We looked for lenders that offer something special.
Find out how much you can save right now with:
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How To Lower Sallie Mae Payments
Once you graduate and start making payments, its important to understand all your repayment options so that you dont fall behind. If youre struggling to keep up with your loans, heres what you need to know about repaying your Sallie Mae student loans.
When To Refinance Student Loans
If you have a private student loan, refinancing usually makes sense when you can save on interest over the long haul or lower your monthly payments.;
Cutting your interest rate by just one percentage point on a $37,000, 10-year loan could save you roughly $18 a month and $2,200 in interest over the life of the loan. And you have the potential to save much more if youre refinancing higher-interest debt, like graduate school student loans. Even if you cant qualify for a lower interest rate, refinancing that same loan into a 15-year term would save you about $100 per month.;
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How To Refinance Sallie Mae Student Loansheading
The good news is that you can;refinance Sallie Mae student loans;with a private lender. Student loan refinancing is the process of exchanging your existing student loans for a new student loan with a lower interest rate. When you refinance student loans, you combine your existing student loans into a single student loan with one monthly payment and student loan servicer.
You can use this;student loan refinance calculator;to determine how much money you can save when you refinance student loans.
If you want to know how to refinance Sallie Mae student loans, the process is simple. You can;apply with lenders online, and the application takes about 10-15 minutes. Lenders will evaluate your credit profile, income, debt-to-income ratioand other factors to ensure that you are a responsible borrower. Typically, lenders prefer to refinance student loans for borrowers who have at least a credit score of 650, current employment or a written job offer, stable and recurring income, and a low debt-to-income ratio, among other factors. If you do not meet these qualifications, you can apply with a co-signer who does.
You May Lose Some Benefits
When it comes to private student loan lenders, their policies and benefits can vary a great deal. Not all lenders offer perks like student loan forbearance or deferments if you return to school.
When you refinance your loans, you may not be able to take advantage of the type of benefits that Sallie Mae offers, including:
- Disability discharge: If you become totally and permanently disabled, Sallie Mae will discharge your remaining loan balance. Not all refinancing lenders offer discharges in the cases of disability.
- Student loan forbearance: If you lose your job or become ill, Sallie Mae allows you to postpone your payments for up to three months at a time, for a maximum of 12 months over the life of your loan. For a private lender, thats a fairly generous forbearance policy, and not all lenders will be able to match it.
- Deferments for returning to school: If you decide to go back to school, enroll in a graduate program, or begin an internship, you can defer your Sallie Mae loan payments until after the program ends. Refinancing lenders may not offer the same deferment policy, so check with the lender before submitting your loan application.
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