Refinancing 21 March 2023

How To Refinance Sallie Mae Student Loans

Refinancing your Sallie Mae student loans can help you save money on monthly payments. Learn how to refinance and find the best rates with our step-by-step guide.

Despite their popularity, Sallie Mae loans often come with higher interest rates than federal loans, which can lead to higher monthly payments and more interest paid over the life of the loan. As a result, if you have Sallie Mae student loans, you may find that your monthly payments are becoming unmanageable or that the interest rates are too high. Fortunately, you may be able to lower your payments and save money through student loan refinancing. Read on as we guide you through the overall process of refinancing, as well as how to refinance your Sallie Mae student loans.

Refinancing at a Glance

Refinancing involves taking out a new loan with a private lender to pay off your existing student loans, potentially at a lower interest rate. It’s important to gain an understanding of refinancing as a whole so that you know you’re making the best possible decision for your finances going forward. In this article, we’ll cover the benefits of refinancing, what to consider before refinancing, and the steps you’ll need to take to refinance your loans. We’ll also discuss how to find the best rates and lenders, and provide tips for a successful refinancing experience. By the end of this guide, you’ll have the knowledge and confidence to make an informed decision about whether refinancing is right for you.

When to Refinance Your Loans

Making the decision to refinance your Sallie Mae student loans, or any loan for that matter, can come down to various factors. Before deciding to sign on the dotted line, consider the following and whether they may apply to your situation:

You qualify for lower interest rates

If you have improved your credit score or if interest rates have decreased since you took out your loans, refinancing can help you save money on interest over the life of your loan. Even a small decrease in your interest rate can add up to significant savings over time. However, note that refinancing your loans may also result in losing certain benefits such as federal loan forgiveness programs or income-driven repayment plans. Be sure to carefully weigh the pros and cons before deciding to refinance your loans.

Seeking a short repayment term

Borrowers looking to shorten the length of the repayment term can do so through refinancing, which will help them save money in the long run. However, keep in mind that a shorter repayment term also means higher monthly payments, so be sure to budget accordingly. Additionally, if you are refinancing federal loans, you may lose certain protections, such as deferment or forbearance options.

Financial hardship

For those experiencing financial hardship, such as a job loss or medical emergency, refinancing may be able to help you lower your monthly payments and make your loans more manageable. Some lenders offer hardship programs that can temporarily reduce or pause your payments, or even forgive a portion of your debt.

Bad experience with the lender

If you are unhappy with your current lender, refinancing with a new one can offer more favorable terms and customer service. Be sure to research potential lenders and read reviews from other borrowers before making a decision. This way, you can avoid the mistake of jumping from one bad lender to another simply because you did not have enough information about the alternative. 

Release co-signer or transfer of debt

Refinancing may be a good option if you have a co-signer on your loans and want to remove them. Many lenders offer co-signer release options after a certain period of on-time payments. However, keep in mind that refinancing federal loans may result in losing certain benefits and protections, so be sure to weigh the pros and cons before making a decision. Co-signer release is often possible from many lenders after borrowers make a given number of on-time payments.  By refinancing and removing your co-signer, you will be responsible for the loan on your own, but it will also give you greater control over your payments and credit.

Benefits of Refinancing

Borrowers opt for student loan refinancing for a number of reasons. Whether you are refinancing your Sallie Mae student loans or any other loan, here are the potential benefits that come with this option:

  • Simplified payments
    Through refinancing, you have the ability to consolidate multiple loans into a single loan, which can simplify your payments and make it easier to manage your debt.
  • Different repayment terms
    The ability to choose different repayment terms, such as a longer or shorter repayment period, depending on your financial situation is another benefit that comes with refinancing.
  • Lower monthly payments
    Refinancing can also result in lower monthly payments, which can be helpful if you are struggling to keep up with your current payments.
  • Lower interest rates
    One of the primary reasons, as well as benefits, of refinancing is the ability to secure a lower interest rate on your loans. This way, you can save a significant amount of money over the life of your loan.
  • Improved credit score
    Provided that you make on-time payments on your new loan, refinancing the loan can also help improve your credit score over time.

How To Refinance Sallie Mae Student Loans

Now that we’ve come to a better understanding on refinancing as a whole, here are the general steps to follow in order to refinance your Sallie Mae student loans, or any loans:

Steps 1: Compare lenders

The first step to refinancing your Sallie Mae student loans is to compare lenders. Different lenders offer different interest rates, repayment terms, and eligibility requirements, so you should shop around to find the best option. You can start the process by researching online, looking at reviews, and comparing rates and terms from multiple lenders.

The following are the six best lenders for refinancing student loans.

LenderScholarooratingOur viewFixed ratesstarting (APR)Variable ratesstarting (APR)Learn more

Laurel Road

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4.9/5Best for Low Interest Rates with Discounts4.99%4.74%Visit website

College Ave

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4.9/5Best for Flexible Repayment Options5.99%5.99%Visit website


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4.8/5Best for Refinancing Parent Plus Loans4.99%5.99%Visit website


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4.7/5Best for Refinancing without Cosigner4.96%5.32%Visit website


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4.5/5Best for Mid-Income Earners4.49%5.02%Visit website

ISL Education Lending

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4.5/5Best for In-School Refinancing6.50%N/AVisit website

Step 2: Consider All Loan Options

Once you have found potential lenders, consider all of the loan options that they offer. Look at both fixed and variable interest rates, and consider the length of the repayment term. Keep in mind that while longer terms can mean lower monthly payments, you will end up paying more in interest over the life of the loan. Additionally, some lenders may offer benefits such as lower interest rates for automatic payments or a co-signer release option. The decision you make will be based on your personal financial situation. 

Step 3: Fill Out Application

Once you have decided on a lender and loan option, the next step is to fill out an application. This process will typically involve completing an application form and attaching supporting documentation such as personal information, income verification, and details about your existing student loans. You may also need to provide information about a co-signer, if applicable. Be prepared to include any additional information or documentation requested by the lender.

Step 4: Manage Payments

After you have been approved for a new loan and your existing loans have been paid off, you will begin making payments on the new loan. Be sure to keep track of your payment due dates and make sure that the payments are made on time to avoid late fees or damage to your credit score. Consider setting up automatic payments to simplify this process, ensuring you don’t miss any payments. If you run into any issues with your payments or need assistance, reach out to your lender’s customer service team for help.

Refinancing Alternatives

Refinancing your student loans is an option that has the potential to help better your financial situation. Having said that, there are other options to look into in the event that refinancing isn’t the ideal solution for you:   

Consider payment postponements 

If you are struggling to make your payments due to a temporary financial hardship, it may be better to explore payment postponement options with your lender instead of refinancing. Many lenders offer deferment or forbearance options that allow you to temporarily pause or reduce your payments, without having to refinance your loans.

Take temporary payment reductions

Perhaps you need more immediate relief from high payments – then you may be able to negotiate a temporary payment reduction with your lender. Some lenders offer income-driven repayment plans that can lower your payments based on your income. Although this option can be a good alternative if you are experiencing a temporary financial setback, expect your income to increase in the future.

Can you lower interest rates with refinancing?

Yes, refinancing can allow you to secure a lower interest rate on your loans. The restructuring that comes with refinancing can result in significant savings over the life of your loan. However, the interest rate you qualify for will depend on a variety of factors, such as your credit score, income, and debt-to-income ratio.

How can I lower my Sallie Mae payments?

If you are struggling to keep up with your Sallie Mae payments, there are several options available to help lower your payments. You may be able to enroll in an income-driven repayment plan, which adjusts your payments based on your income and family size. You may also request a deferment or forbearance, which allows you to temporarily pause or reduce your payments. Refinancing your loans with a new lender also has the potential to lower your payments by securing a lower interest rate or extending your repayment term. 

Can Sallie Mae student loans be forgiven?

Generally, private student loans, including those issued by Sallie Mae, are not eligible for federal loan forgiveness programs. Sallie Mae does offer some loan forgiveness options in certain situations, such as in the event of the borrower’s death or permanent disability. It is important to carefully review the terms and conditions of your specific loan agreement and contact your lender for more information on forgiveness options.

Final Thoughts

Refinancing your Sallie Mae student loans can be a smart financial move if you are looking to lower your interest rate, simplify your payments, or lower your monthly payments. Before refinancing, it is essential to compare lenders and to consider all loan options. Carefully consider whether refinancing is the right option given your specific situation, taking into account factors such as payment postponements, temporary payment reductions, or co-signer release. Additionally, it is important to understand when it makes sense to refinance your loans, such as when you qualify for lower interest rates, have a short repayment term, or are experiencing financial hardship. By being aware of student loan refinancing options and carefully considering your alternatives, you can make informed decisions about managing your student loan debt and achieving your financial goals.