Things You Can Do If Youre Denied For A Private Student Loan
What youll learn
- How to improve your chances of getting approved for a private student loan
- Who you can turn to if your student loan application was denied
Getting denied for a can be a tough situation. I know because Ive been there. One day youre picking out dorm room décor and getting ready for orientation, and the next youre wondering if youre even going to make it to college.
Dont panic. There are steps you can take. First, you need to understand why your student loan application was denied and what your next steps are.
Why you were denied
Every lender has their own requirements for getting approved for a . Lenders may look at your employment history, credit score, debt-to-income ratio, and enrollment status at your school. One of the most common reasons why a student might not qualify for a private student loan is because they dont meet their lenders criteria.
Your FICO® Credit Score is a three-digit number that lenders use to measure how likely you are to be able to repay debt. If youve never borrowed or had to pay back money before, this number may not be high enough to qualify you for a loan. If youre no stranger to borrowing, but have missed or been late on payments, your credit score may have also been impacted and can affect your chances of getting approved.
Having a limited or less-than-awesome credit history can make getting approved for a private loan difficult, but there are steps you can take to move forward.
What you can do
You have options
Is Sallie Mae Legit
Sallie Mae is a highly recognized name in the private student loan industry. With multiple programs, including ones for part-time students, and its 95% approval rate for students who use a cosigner, many students should be able to find a solution that works for them through Sallie Mae.
It has streamlined its application process and promises fast approvals, although a hard credit check is required in order to see your rates and options. Its additional benefits, like the Multi-Year Advantage program and $0 origination fees, do help most students take control of their loans over the entirety of their time in college for easier payments after graduation.
How Do I Apply
You can apply for a Sallie Mae personal loan online or over the phone. Follow these steps to begin the process online:
What information do I need to apply?
Sallie Mae doesn’t state what information you will need to apply. However, you will likely need to provide proof of income and your Social Security number to fill out the application. Other documents may also be required.
What happens after I apply?
If approved, read over your offer before signing your loan documents. Sallie Mae will then transfer your funds to your bank account as soon as the next business day in some cases. Ultimately, when you get your funds depends on what time of day you get approved and your bank. If you’re approved before 3:30 p.m. ET, Sallie Mae can transfer the funds to your bank account as soon as the next business day.
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President Biden’s Student Loan Forgiveness Proposals
On the campaign trail, President Biden mentioned two forms of forgiveness: one-time relief of $10,000 for all federal student loan borrowers and yearly $10,000 relief for federal student loan borrowers who participate in national or community service, up to five years total.
Student loan forgiveness could potentially happen with either congressional approval or executive action. However, because student loan forgiveness is not included in Biden’s 2022 budget proposal, executive action is the more likely scenario and Biden’s authority to pursue that action is still under debate.
Instead of widespread student loan forgiveness, the administration has been concentrating its efforts on improving existing student loan forgiveness programs, like total and permanent disability discharge and borrower defense to repayment. Through these programs, billions of dollars’ worth of student loan debt has been forgiven this year.
Choosing The Best Loan For You
Federal student loans are usually available to U.S. citizens or permanent residents with financial need who are enrolled in a qualifying program.
Private student loans have similar conditions but also require a credit check and minimum income.
Many people use a mix of both federal and private student loans to cover their education costs. So qualifying for student loans can be essential when it comes to paying for college and continuing your education.
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Find the right student loan for you
- Multiple lenders compete to get you the best rate
- Get actual rates, not estimated ones
- Finance almost any degree
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Sallie Mae Loan Requirements
Because there are so many types of loans available, requirements for approval can be pretty vast. For example, if youre applying for a Smart Option Student Loan through Sallie Mae, you must be a U.S. citizen or permanent resident. Also, your loan amount must be more than $1,000.
There are certain credit requirements and income thresholds as well, but these vary, so your best option is to use its online calculator to figure out whats available for you.
Students or parents must apply for a new loan each school year, which means rates and factors can change from year to year. But it does offer a Multi-Year Advantage program that offers faster approval and convenience when applying for a loan year after year.
The amount you take out cant be more than the cost of attendance minus any financial aid, but the money can be used to cover 100% of school-certified expenses, including books and rent.
Can You Get A Student Loan With Bad Credit
It is possible to get a student loan even if you have bad credit or no credit history. That said, it will be more difficult to qualify, and rates will be higher. Federal student loans are the easiest to qualify for, since most won’t do a credit check and don’t consider your credit score, and interest rates are the same for all borrowers. If you need to borrow private loans, you can look for lenders that have low credit score requirements, take other eligibility requirements into account or let you add a co-signer to your loan.
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Consider Student Loan Refinancing
If your Sallie Mae loan has a high interest rate, you could save a substantial amount of money by refinancing your student loans.
With refinancing, you take out a new loan for some or all of your current ones. This way, you can get a better interest rate, a longer term with smaller payments or a shorter term to get you out of debt faster.
Find out how much you can save by using our refinancing calculator. And if you think this might be the right move for you, compare offers from multiple refinancing lenders to ensure you get your best rate.
Andrew Pentis contributed to this report.
What It Takes To Qualify With Sallie Mae
All products have the same basic Sallie Mae loan requirements:
Minimum credit score: Sallie Mae doesnt disclose a minimum credit score requirement. In 2020, 94% of applicants that were approved for a Sallie Mae student loan had a FICO Score of 670 or above at the time of their loans origination.
Minimum age for borrowers: Borrowers must be the age of majority in their state . Younger applicants will need an eligible and creditworthy cosigner.
State residency requirements: Sallie Mae student loans are available in every state.
Eligible schools: Sallie Mae doesnt publish a list of eligible schools, but you can search for the name of a school at the beginning of the loan application to see if your school qualifies.
|You must be enrolled at a degree-granting school and pursuing a J.D. degree.|
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Can I Get A Private Student Loan Without A Cosigner
90% of undergraduate students and 60% of graduate students need a cosigner to get approved for a private student loan. Some undergraduate and graduate students may have the credit score qualifications to get approved without a cosigner. It all depends on your credit score and credit history.
Different lenders have different qualifying criteria. To determine eligibility, its best to contact a potential lender directly.
Benefits Of Sallie Mae Student Loans
There are many benefits to Sallie Maes student loans, including the following:
- A wide range of borrowers may be eligible. Sallie Mae may accept borrowers with a wide range of credit scores and allow for students to add a cosigner to help satisfy the eligibility requirements.
- International students who are studying in the U.S. may be eligible. Non-U.S. citizens may be eligible for Sallie Maes loans if they add a U.S. citizen or permanent resident as a cosigner.
- Easy application process. The application and approval process is efficient and can all be done online with Sallie Mae.
- Flexible deferment options. Sallie Mae offers multiple deferment options for borrowers including options for grace periods and payment deferments while a borrower is getting their career started.
- Part-time students may be eligible. Whereas many lenders dont offer loans to part-time students, Sallie Mae does.
- Death and disability discharge. If a borrower dies or becomes permanently disabled before paying off the loan, his or her loan balance will be discharged regardless of whether there was a cosigner on the loan or not.
- Cosigner release. Borrowers may be able to release their cosigner from the loan after 12 on-time principal and interest payments have been made.
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Ascent Student Loans Disclosures
Ascent loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations and terms and conditions may apply. For Ascent Terms and Conditions please visit: AscentFunding.com/Ts& Cs.
Rates are effective as of 10/01/2021 and reflect an automatic payment discount of either 0.25% OR 1.00% . Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates.
1% Cash Back Graduation Reward subject to terms and conditions, please visit AscentFunding.com/Cashback. Cosigned Credit-Based Loan student borrowers must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs are available for the most creditworthy applicants and may require a cosigner.
Do Private Student Loans Allow Deferment Or Forbearance
Federal student loans allow you to delay your loan payments while you are attending school. Some private student loans offer this, too, but interest still will accrue on these loans.
There are lenders that offer other types of deferment. For example, some allow you to delay your payments due to a financial hardship, like unemployment, or during military deployment.
Be mindful of the amount of interest youll owe and any fees the lender may charge for deferment. Youll want to review your deferment options before choosing a loan.
Like deferment, forbearance lets you suspend payments for a certain period of time. Private lenders may use forbearance and deferment interchangeably. During forbearance on federal loans, interest continues to accrue, which differentiates it from deferment.
Regardless of whether the suspended payments are referred to as deferment or forbearance, on a private loan, the unpaid interest gets added to your principal, causing your monthly payments to increase once repayment begins again.
Editors note: Under the CARES Act, which was passed in response to the coronavirus pandemic, federal student loan borrowers do not have to make payments for a period of six months, from March 13 through Jan. 31, 2021. Additionally, federal student loan interest rates are set at 0% during that time.
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How Does A Sallie Mae Loan Work
With Sallie Mae, students or their guardians apply for one of its loan options . Then all payments are deferred and dont have to be paid in monthly increments until the student graduates or stops attending school. Sallie Mae offers borrowers the option to pay down the loan while in school if they prefer.
Students who get a Sallie Mae loan also receive access to benefits like four months of free Chegg Study, an online education resource, and college planning resources. Sallie Mae also offers certain scholarships.
Sallie Mae Refinancing Options
Sallie Mae no longer offers student loan refinancing options. So if youve taken out student loans through Sallie Mae and are looking to refinance at a lower interest rate, you may be wondering what your next steps should be.
Fortunately, there are still many options available to borrowers with private Sallie Mae loans. You can refinance your loans through another bank or online lender. However, if you do this, the management of your loans will switch over to your new lender, and youll no longer be affiliated with Sallie Mae.
If you want, you can refinance a single student loan at a lower interest rate. Or you can consolidate multiple student loans into a single loan and refinance at a lower interest rate. Doing this will streamline your monthly payments and can save you thousands of dollars in interest.
If you can receive a lower interest rate, then refinancing private student loans is generally a good idea. But you should think carefully about refinancing federal loans with a private lender.
If you do this, youll lose access to certain federal protections like income-driven repayment plans, student loan forgiveness programs, and forbearance. Make sure you receive quotes from multiple lenders and consider all your options before making a final decision.
If youre interested in learning more, feel free to check out our guide on the best student loan refinancing lenders.
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Types Of Student Loans Sallie Mae Offers
Whether youre a parent of a grade school student or about to begin your doctorate, Sallie Mae may have a student loan that fits your needs. Its loans are designed for undergraduate students, graduate students and parents or sponsors of students. It also has loans to cover the costs of medical or dental residency or preparing for the bar exam.
Private Graduate Student Loans
Graduate students who have exhausted their federal unsubsidized and PLUS loan options, or those with a strong history of employment, may want to consider private student loan options for graduate school. You can apply for a graduate student loan with a creditworthy cosigner if you need or if youre looking for a more competitive interest rate. These loans can help fill the funding gap, and they rarely have origination or disbursement fees. You may also find more competitive rates than federal student loans .
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Can You Consolidate Private Student Loans
Loan consolidation means you are combining multiple loans into one loan. This gives you the option of being able to make one monthly payment on one loan instead of multiple payments on different loans. It is important to understand what this means for your loan.
First you should understand consolidation is different from refinancing. Refinancing usually involves only one loan. Consolidation may involve two or more loans which are being put together and changing your total loan amount to the balance of those loans.
Consolidating your loans may mean it could take you longer to pay off. This may mean you are paying more for the single loan than you would pay over the life of smaller loans. Make sure you carefully evaluate this option before you agree to consolidate.
If you are able to consolidate your loan and get a lower interest rate it may help offset the amount you pay off over time. Be careful to review all loan documents before accepting a consolidation loan. Understanding the pros and cons is important when consolidating.
Have Questions Or Need Help Applying
Top undergraduate student loan questions
Private student loans are credit-based, which means we will check your credit when you submit your application. Students are nearly 4 times more likely to be approved with a cosigner7 since many students havent had time to build up their own credit. A cosigner is someone who shares responsibility with you for paying back the loan and is often a parent, but can be any creditworthy adult.
Students can apply just once a year with a single credit check and funds are sent for each term directly to your school. You can cancel future disbursements as needed with no penalty. No additional interest is charged until money is sent to your school, so you can relax, knowing you’ve got the funds when you need them.
It takes about 15 minutes to apply and get a credit decision. After youre approved, you choose your undergraduate student loan options, accept your loan disclosure, and the loan is certified by your school. We send the funds directly to the school. The process can take as few as 10 business days from application to disbursement.
Whether you study online or on campus, you can borrow to cover the costs at a degree-granting institution, even if you’re not a full or half-time student. The loan’s flexibility makes it a good choice for many situations:
- Attending school full-time, half-time, or less than half-time
- Online or on-campus classes
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