If you’re headed to college next semester, you’re likely stressed out over how to pay for it, especially if you’ve already exhausted federal financial aid. Private student loans can help you cover the remaining 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 with Sallie Mae, here’s what you need to know first.
Sallie Mae’s Smart Option Student Loan review: The basics
If you’ve read Sallie Mae student loan reviews, you know the Smart Option Student Loan is its loan designed specifically for undergraduates. With the Smart Option 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.
Here are a few features that come with the Sallie Mae Smart Option Student Loan, some that aren’t available at many competing lenders:
Choice of repayment options
Sallie Mae student loans allow you to choose between three repayment options:
- Deferred: 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 finishing school and landing a job.
- Fixed: 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 freshman students save 14% on their total undergraduate student loan cost.
- Interest: 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 first-year students save about 29% on their total loan cost.
Free credit score
If you take out Sallie Mae student loans, you can get a quarterly report on your FICO credit score. Having your report helps you keep your finances on track.
Although you can also get a free credit report once a year from the credit reporting agencies, and more frequently from various free online sources, receiving quarterly FICO scores from your student loan servicer can be very convenient.
Interest-rate reduction for automatic payments
Signing up for auto-debit payments would net you 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 a sizeable chunk of money. Plus, it minimizes the chances of you missing a payment and becoming delinquent on your student loan.
What we like about Sallie Mae student loans
Sallie Mae’s Smart Option Student Loan stands out for several reasons.
1. Expanded eligibility for part-time students
To borrow many types of private student loans — and federal loans — you must attend classes at least half time, if not full time. Sallie Mae student loans, however, are accessible even for less-than-half-time students.
If you’re a part-time student seeking financing, count Sallie Mae among your options. Keep in mind, however, that you must meet the lender’s $1,000 minimum borrowing amount.
2. 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, which is also among lenders to offer scholarships, allows you to choose a plan that works for you and your budget. As mentioned earlier in this student loan review, Sallie Mae has three options for repayment while in you’re in school and right after you graduate.
As an added perk, if you can afford to make interest payments while in school, Sallie Mae will give you an interest rate that is one percentage point lower than for borrowers who choose to defer payments. That difference can result in significant savings.
3. More options if you can’t afford payments
Most private lenders require you to keep up with payments no matter what. Unlike with federal loans, many private student loans won’t allow you to postpone making payments, even in the case of severe financial hardship. Sallie Mae, however, does have some option here.
If you’re facing significant financial troubles, such as a job loss or medical emergency, you might qualify for forbearance. That means you can temporarily stop making payments for spans of up to three months — for a maximum of 12 months — without defaulting on the loan.
To enter into forbearance, Sallie Mae requires you to make a $50 good faith payment on each loan — up to a maximum of $150. It 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, meanwhile, you can defer your Sallie Mae student loans, postponing payments for up to 48 months. Interest will continue to accrue during this time, but a deferment can give you the space you need to focus on your education without worrying about payments.
4. 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 to take your cosigner off the loan. Sallie Mae asks for just 12 months of on-time payments, making it easier to get your cosigner removed, 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. At the very least, it’s a good way to show thanks to the cosigner for having helped you get the loan in the first place.
5. 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 lenders are not required to forgive the remaining balance, and many will try to collect on the balance due, no matter what.
Sallie Mae is one of the few private lenders that will forgive the remaining loan balance in the cases of death and disability, giving much-needed relief to a borrower’s family.
Are Sallie Mae student loans 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. The lender’s Smart Option Student Loan offers more benefits and choices than many private loans, making it easier to repay after graduation.
But beyond reading Sallie Mae student loan reviews, make sure you get quotes from multiple private student loan lenders so that you can compare offers and make an informed decision.
If you’re seeking a quote from Sallie Mae, visit the lender’s website. It promises an answer in 15 minutes or less.
Andrew Pentis contributed to this report.
Student Loan Hero has independently collected the above information related to Sallie Mae’s Smart Option student loans, which is current as of Jan. 23, 2019, unless otherwise noted. Sallie Mae has neither provided nor reviewed the information shared in this article.
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|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 4/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.24% – 13.24%1||Undergraduate and Graduate|
|4.07% – 11.32%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.50% – 11.35%*,4||Undergraduate and Graduate|
|4.25% – 13.25%5||Undergraduate and Graduate|
|6.08% – 7.22%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.42%8||Undergraduate, Graduate, and Parents|