Sallie Mae’s Private Student Loans Review: Pros and Cons

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Private Student Loan rates starting at 1.04%

1.04% to 11.98% 1
VARIABLE APR

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1.13% to 11.23% 2
VARIABLE APR

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3.80% to 9.36% 3
VARIABLE APR

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  • Variable APR

Many students in the U.S. who need assistance affording a college education turn to private student loans. They can help cover a gap when federal student aid, scholarships and savings aren’t enough to cover your costs.

But make sure to explore private loans only after you’ve submitted a Free Application for Federal Student Aid, known as the FAFSA, and you’ve maxed out your federal aid eligibility. That’s because you might qualify for financial aid, including grants and work-study, that you don’t have to pay back.

If private loans are part of your college financing strategy, this Sallie Mae private student loan review can help you pick the best loan for you.

Sallie Mae review: private student loans

Sallie Mae started out as a government-sponsored enterprise tasked with supporting the federal student loan program. In 2014 the company spun off its federal loan servicing division into a separate company called Navient; Sallie Mae now only makes private student loans.

Here’s what you need to know about getting a private student loan from Sallie Mae:

Pros and cons of a Sallie Mae student loan

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When you get a Sallie Mae loan, you get access to relatively flexible repayment options. You can further customize your loans by choosing between variable and fixed interest rates, an option many private lenders offer.

Sallie Mae loans also come with many borrower perks. Like many lenders, Sallie Mae offers an interest rate reduction for automatic payments and no origination fees, as well as credit score information to track your financial health. Plus, depending on when your loan was first disbursed, you could even have access to free online tutoring.

However, you might be subject to a higher interest rate than what you’d receive on a federal loan, depending on your credit or that of your cosigner. As with many private student lenders, your credit score matters — and a lower score could mean higher rates.

You also lose out on federal protections when you opt for a private loan. While there are flexible Sallie Mae repayment options, they’re not as generous as the income-driven repayment options offered with federal student debt. Plus, you won’t be eligible for federal student loan forgiveness programs when you work with a private lender.

Who should get a Sallie Mae student loan?

In most cases, students are better off looking for grants, scholarships and federal student loans to fund college. Exhaust all other options before turning to private loans.

A Sallie Mae private student loan is likely best for those who are unable to pay for college using federal programs. When applying for federal programs, there are limits that can prevent students from getting the funds they need for school. For example, a student’s year in school can affect their loan amount.

Sallie Mae student loan products

Sallie Mae offers nearly a dozen private educational loan products. These include:

  • Undergraduate student loans: These loans are designed for students working toward a bachelor’s or associate’s degree. You can also get a loan to earn a certificate at a degree-granting school.
  • Graduate student loans: You can use graduate student loans to pursue a master’s, doctorate and law degree.
  • MBA student loans: If you’re pursuing a master of business administration, Sallie Mae offers loans for this purpose.
  • Health professions graduate loans: These private student loans are designed for those going for degrees in pharmacy, nursing and other graduate-level medical fields.
  • Dental and medical school loans: If you plan to attend dental or medical school, Sallie Mae offers private student loans for these purposes. You can also use these types of loans for veterinary degrees.
  • Residency loans: Designed for medical and dental residents, this loan could cover board exams, interview travel and moving costs associated with changing locations for your residency.
  • Bar study loans: Looking for help as you deal with the costs of studying for the bar exam? This type of loan covers living expenses and other fees associated with your study.
  • Career-training student loans: If you need professional or technical training but attend a non-degree-granting program, opt for this type of loan.
  • Parent loans: Parents can help their children pay for undergraduate, graduate and certificate programs with these loans.
  • K-12 student loans: This type of loan is aimed at parents who pay to send their children to private school.

Sallie Mae repayment options

Sallie Mae offers three repayment plans for private student loans:

  • Deferred repayment: With this option, you make no scheduled loan payments at all while you attend school. Plus, you have a six-month grace period after graduation.
  • Fixed repayment: This plan helps you cut down on accruing interest. You pay $25 a month toward your loans while you’re in school and during the grace period. Once the grace period is over, you start making full payments on the principal and interest.
  • Interest repayment: Under this option, you pay off all accrued interest each month while you’re in school and during your grace period. You’ll start making principal payments in addition to interest payments when your grace period ends. With this plan, you are eligible to have a 1% interest rate reduction, lowering the overall cost of your loan.

Deferment and forbearance

If you decide to go back to school or start a qualified residency program, you can ask for a temporary deferment from Sallie Mae. If approved, your student loans will revert back to the payment option you originally chose during the time your loans are deferred. You can defer your loans for a maximum of four years.

A Sallie Mae private student loan also comes with a financial hardship option. If you have trouble affording your loan, you can apply for forbearance and temporarily pause your payments until you get back on your feet.

You could be approved to pause payments in three-month increments for up to 12 months over the life of the loan.

To qualify, you may have to make a single payment, which will be applied to your current loan balance. Interest will continue to accrue during forbearance, and if there are loan disbursements scheduled during the forbearance period, they will be canceled.

Cosigner release

Though you may need a cosigner to qualify for a Sallie Mae loan, you might be eligible for a cosigner release after graduation. To qualify, you must be current on all Sallie Mae-serviced loans for the previous 12 months, and you cannot have been in deferment or forbearance in the year prior to the cosigner release.

Sallie Mae requires you to show that you can take on the payment responsibilities, so you’ll need to provide proof of income that is no more than 90 days old and pass a credit review.

Using Sallie Mae online

Sallie Mae’s website is easy to navigate, and you can apply for a loan right from the homepage. Once you start the application, you’ll receive a list of eligible private student loans to choose from.

Select which loan to apply for and you’ll be taken to an application, which you can start and return to later if you need more time.

The information you’ll need for your application includes:

  • Confirmation of citizenship status (for you and your cosigner, if necessary)
  • Social Security number
  • School information (name, enrollment period, enrollment status and course of study)
  • Loan amount
  • Employment information
  • Financial information, including bank account details and monthly housing payment
  • Information for two personal contacts
  • Scholarships and other financial aid

If you apply with a cosigner, they’ll need to supply the same information.

Sallie Mae interest rates and fees

In general, you can expect to receive a variable APR of 1.13% – 11.23% or a fixed APR of 3.50% – 12.60%. The interest rate you’re offered depends on a variety of factors:

  • The type of loan you apply for
  • Whether you choose a variable or fixed interest rate
  • Your credit score, or your cosigner’s if you use one

If you sign up for automatic payments, you can get an interest rate reduction of 0.25%. Additionally, borrowers who choose the interest repayment option will have an interest rate that is 1% lower than those who choose the deferred payment option.

Sallie Mae doesn’t charge origination fees, and there are no prepayment penalties.

Sallie Mae student loan eligibility requirements

As with other private student loans, you must go through a credit check and meet credit requirements before you’re approved. If your credit score isn’t high enough for you to qualify on your own, you might need to add a cosigner to your application. Sallie Mae’s website doesn’t disclose a minimum credit requirement, but it’s likely a student without a credit history will have a difficult time getting approved without a cosigner.

You also need to borrow at least $1,000 to qualify for a Sallie Mae student loan. Sallie Mae offers loans for up to 100% of the school-certified cost of attendance; however, students may be approved for a loan amount that is less than the school-certified cost. For example, if the student will receive financial aid, the loan amount cannot exceed the remaining cost of attendance.

Sallie Mae contact info and customer service

If you have questions that weren’t answered in this Sallie Mae review, you can find answers on Sallie Mae’s FAQ page.

If you’d prefer to get in touch with a customer service representative, visit the contact page. You can find customer service links that provide specific information about applying for a loan or checking on an application in progress.

You can also reach Sallie Mae using the lender’s online chat feature, or by calling (855)-756-5626 if you are applying for a new loan, cosigning for a new loan, completing your loan application or checking the status of a submitted loan application. Customer service hours are Monday through Thursday, 8 a.m. to 10 p.m. EST and Friday 8 a.m. to 9 p.m. EST.

Sallie Mae can also be found on Facebook and Twitter.

Kristina Byas contributed to this report.

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