If you’re headed to college this upcoming semester, you’re likely stressed out over how to pay for it, especially if you’ve already exhausted federal aid. Private loans can help you cover the cost, but how do you choose a lender?
Sallie Mae student loans are a popular option for many undergraduates. If you’re considering taking out a loan, here’s what you need to know first.
Sallie Mae’s Smart Option Student Loan review: The basics
Sallie Mae designed the Smart Option Student Loan specifically for undergraduate students. With this loan, you can borrow up to the total cost of attendance. There are no origination fees, and you can choose between fixed and variable interest rates.
There are a few features that set this loan apart from the offerings of other lenders.
1. Choice of repayment options
Sallie Mae allows you to choose between three repayment options:
Deferred repayment: You’re not responsible for making payments while you’re in school and for six months after graduation. You’ll pay more in interest with this repayment option since interest accrues while you’re not making payments, but the extra time before payments are due can help you focus on school and landing a job.
Fixed repayment: With this option, you pay $25 a month while in school and during your grace period. According to Sallie Mae, opting for this repayment plan can help you save 12% on your total undergraduate student loan cost.
Interest repayment: Under an interest repayment plan, you pay the interest every month while in school and during the six-month grace period. According to the company, paying the interest in school can help you save about 25% on your total loan cost.
2. Free credit score
If you take out a Sallie Mae loan, you can get a quarterly report on your FICO credit score. Having your report helps you keep your finances on track.
3. Interest-rate reduction for automatic payments
Sign up for auto-debit payments and you could get a 0.25 percentage point reduction on your interest rate. Over the length of your repayment term, that modest change to your rate could help you save money. Plus, it minimizes the chances of you missing a payment and becoming delinquent.
If you’re facing a significant financial hardship, such as a job loss or medical emergency, you might qualify for forbearance. That means you can temporarily stop making payments for up to 12 months without defaulting on the loan.
Sallie Mae requires you to make a $50 good faith payment on each loan — up to a maximum of $150 — to enter into forbearance. Sallie Mae advises borrowers to contact it as soon as possible if they think they will miss a payment.
If you decide to go back to school, you can enter your loans into deferment, meaning you can postpone making payments for up to 48 months. Interest will continue to accrue during this time, but a deferment can give you the time you need to focus on your education without worrying about payments.
6. Cosigner release
After you graduate, make 12 on-time principal and interest payments — and meet certain other credit requirements — and you may qualify for a cosigner release. That means you could ask Sallie Mae to remove the cosigner’s responsibility from the loan.
7. Loan discharge
If a student loan borrower dies or becomes permanently disabled, Sallie Mae will forgive the remaining loan balance rather than require the borrower’s family to make the payments.
What we like about Sallie Mae student loans
All private lenders are not created equal. Sallie Mae’s Smart Option Student Loan stands out for several reasons.
1. Better repayment plans
Many private student loan lenders require you to start making payments right away — on both interest and principal. While you’re in school and job searching, keeping up with those payments can be difficult, if not downright impossible.
Sallie Mae’s repayment options allow you to choose a plan that works for you and your budget. As an added perk, if you can afford to make interest and principal payments while in school, Sallie Mae will give you an interest rate that is one percentage point lower than that of borrowers who choose to defer payments. That difference can result in significant savings.
2. More options if you can’t afford payments
Most private lenders require you to keep up with payments no matter what. Unlike federal loans, not all private lenders allow you to postpone making payments, even in the case of severe financial hardship. Sallie Mae allows you to defer payments or enter into forbearance, helping you get back on your feet.
3. Easier cosigner release requirements
Some lenders don’t offer cosigner releases at all, while others require years of on-time payments before you can even apply for a cosigner release. Sallie Mae asks for just 12 months of on-time payments, making it easier to get your cosigner removed from the loan, so long as you meet the other requirements. Eliminating your cosigner from the loan can help improve your relationship with that person and prevent any tension over money.
4. Disability discharge
There have been nightmare cases where borrowers have become disabled or even died, and student loan lenders came after their loved ones for the money owed. Unfortunately, private student loan lenders are not required to forgive the remaining balance, so many will try to collect on the balance due, no matter what.
Sallie Mae is one of the few lenders that will forgive the remaining loan balance in the cases of death and disability, giving much-needed relief to borrowers and their loved ones.
Is Sallie Mae’s Smart Option Student Loan right for you?
If you’re a high school senior or undergraduate student in need of more financing for school, Sallie Mae student loans might be a wise choice. Sallie Mae’s Smart Option Student Loan offers more benefits and choices than many private loans, making it easier to repay after graduation.
But before applying for a loan, make sure you get quotes from multiple private student loan lenders so that you can compare offers and make an informed decision.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|