When you think about student loans, it’s likely that Sallie Mae comes immediately to mind.
This company started out as a government-sponsored enterprise but went private in 2004. In 2014, Sallie Mae split into two companies—Navient Corporation, a federal student loan servicer, and Sallie Mae, a private student loan lender.
But, just because you recognize the name, doesn’t mean Sallie Mae is the best choice as your private lender.
Let’s look at Sallie Mae’s terms, eligibility criteria, and borrower protections to see if this company makes sense for your situation.
Overview of Sallie Mae Student Loans
Sallie Mae offers several private student loan products to student and parent borrowers. This includes:
- Undergraduate student loans
- Career training student loans
- Parent loans
- Graduate student loans
In the past, Sallie Mae also offered private student loan refinancing and consolidation services, but those services ended in 2008.
Pros of Borrowing a Sallie Mae Student Loan
- One of only a handful of borrowers that lends money to part-time students
- Death and disability discharge
- Non-U.S. citizens may be eligible with a U.S. citizen or permanent resident cosigner
- Cosigner release offered after just 12 months of on-time payments
- Funds can be used for select certificate programs or an associate degree or higher
Cons of Borrowing a Sallie Mae Student Loan
- A history of customer service complaints online
- Requires a hard credit check to see what rates you qualify for
- You don’t get to choose your own loan term
- Minimum financial eligibility requirements aren’t disclosed
Sallie Mae Student Loan Details
To see personalized rates from Sallie Mae, you’ll have to agree to a hard credit check. A hard credit inquiry shows up on your credit report, negatively affecting your score. Unfortunately, this means simply checking rates with Sallie Mae could affect the rates you get from another student loan company.
Other lenders offer rates and preapproval with just a soft credit inquiry. This is less risky because it doesn’t affect your score.
In October 2019, rates for Sallie Mae undergraduate student loans ranged from 3.12*% to 10.54% variable APR and from 4.74*% to 11.35% variable APR. Rates continually fluctuate. You can check current Sallie Mae interest rates here.
*Rates include a 0.25% auto-pay discount.
Sallie Mae loan terms range from 5 to 20 years depending on the type of loan. For undergraduate student loans, terms range from 5 to 15 years. However, borrowers do not select what loan term they want; Sallie Mae assigns one based on your application. This means you get less control over your total monthly payment and the total overall cost of the loan.
Other lenders let borrowers choose their own loan term.
Students can borrow up to the cost of attendance minus any financial aid received. Sallie Mae does reserve the right to limit borrowing more than that depending on the applicant and the circumstances. The minimum you can borrow is $1,000.
Sallie Mae doesn’t charge a prepayment penalty, application fee, or origination fee. This is excellent and on part with the best lenders out there.
However, Sallie Mae does charge a late fee of 5% of the amount of the past due payment up to a maximum of $25. Your payment is considered late if it is made more than 15 days past the payment due date. You can avoid late fees by setting up autopay or choosing a lender that doesn’t charge any.
Unfortunately, Sallie Mae doesn’t publish a list of specific financial eligibility requirements. However, in 2016, approved loan applicants had an average FICO score of 748. This suggests that you need a credit score in the upper 600’s to meet their minimum qualifications.
A big downside to a lender that doesn’t reveal their specific requirements is this—you won’t know for sure if you meet their minimum credit score and income requirements until you apply. With Sallie Mae, that means accepting a hard credit check without even knowing if you meet the minimum criteria.
Sallie Mae does allow cosigners if you want to boost your approval odds. Cosigners are also required for students who have yet to meet the age of majority (usually 18) in their state.
Sallie Mae frequently advertises bonus values you earn when you borrow a new student loan. For example, loans that first disburse between July 1, 2018, and April 30, 2020, include four months of free Chegg study help.
As a Sallie Mae borrower, you also gain access to free FICO credit score tracking.
Alternatives to Sallie Mae Student Loans
It’s always a good idea to do some research before choosing a lender. Compare Sallie Mae to the lenders we work with to see which one fits your needs best. All the lenders we partner with offer competitive interest rates, no fees, clear-cut eligibility requirements, and easy online applications.
Here are our trusted lenders:
Repaying a Sallie Mae Private Student Loan
Sallie Mae lets borrowers choose between three in-school repayment plans:
Deferred repayment: No scheduled loan payments while you’re in school or during your grace period
Fixed repayment: A fixed monthly payment while you’re in school and in your grace period
Interest repayment: Interest-only payments while you’re in school and during your grace period
You’ll need to choose one of the above repayment plans when you take out the loan. Once you pick one, you cannot change it while you’re still in school or in your six-month grace period. You’re obligated to make the payments you commit to and face late fees if you fail to make those payments.
Sallie Mae offers an autopay discount of 0.25%, which drops your interest rate and keeps your payments timely. You can choose to auto-debit only the total amount due or you can auto-debit the total amount due plus an extra amount. Paying extra each month saves you money in the long run.
Sallie Mae doesn’t provide the option for biweekly payments, which is a perk you can find from other lenders.
Sallie Mae understands that borrowers face economic hardships and life changes.
Check out what borrower protections and forbearance options they offer:
- Grace period: Your first principal and interest payment is due six months after you are no longer enrolled in school
- Graduated repayment period: As you transition from school to work, you can make interest-only payments for a single year
- Death & Disability Discharge: If the borrower dies or becomes disabled, the entire loan amount is discharged. This applies to cosigned and non-cosigned loans.
- Internship, clerkship, fellowship, or residency program deferment: Borrowers may be eligible to defer their loan for the duration of the program (up to 60 months) so long as the program is approved by Sallie Mae
- Academic deferment: You can receive up to 48 months of academic deferment while you return to college or attend graduate school
- Military deferment: The interest rate is capped at 6% during eligible periods of military service
- Forbearance for financial difficulty: Up to 12 months of forbearance in three-month increments over the life of the loan
- Cosigner release: Available after 12 on-time full payments
Where Sallie Mae Student Loans Fall Short
Sallie Mae certainly knows student loans, and their products are a great option for students who are only enrolled part-time. But, this company does fall short in a few areas—areas worth exploring if you’re still considering Sallie Mae as your lender:
- Sallie Mae chooses your term length for you, meaning you lose control over your monthly payment and total overall loan costs
- You won’t know what rates you qualify for without a hard credit check, which affects your credit score
- Salle Mae doesn’t disclose its financial eligibility requirements, so you won’t know if you meet their minimum income and credit score requirements before applying
- You cannot make biweekly payments via autopay
- Borrowers only have 12 months of forbearance available whereas other lenders offer up to 24 months
- This company has a history of poor customer service reviews, and you aren’t assigned a personal loan advisor (an approach other student loan companies take)
Final Thoughts on Sallie Mae Private Student Loans
Before you borrow any money for college, make sure you exhaust your other financial aid options first. First use grants, scholarships, work-study, and any savings. Then, turn to federal student loans—subsidized followed by unsubsidized.
If you still need to borrow to cover costs, make sure you’re getting the best deal and the best support possible. As a private student loan lender, Sallie Mae works great for some borrowers, but others have struggled to receive help from their customer service team. Student loans are confusing, which is why we only partner with lenders that have an excellent reputation in customer service. Not to mention low rates and flexible loan terms and repayment plans.
Compare the Best Student Loan Refinance Rates
Here are our top student loan refinance picks for 2019
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Student Debt Relief Loan Refinancing Advertiser Disclosure
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.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
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.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
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 qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). 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 of 10 years or less. For loan terms of 10 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 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 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 04/23/19. 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 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.