Sallie Mae Private Student Loan Review
Are you a college student who is looking for a way to pay for college? If so, you may be interested in learning more about Sallie Mae. In this article, we will provide a review of Sallie Mae’s private student loans. We will discuss the features and benefits of these loans, as well as how to apply for them.
Learn more in our detailed Sallie Mae private student loan review.
About Sallie Mae
Sallie Mae first opened its doors in 1973. This student loan provider offers federally guaranteed loans that are great for part-time students and those who want to have a bit more flexibility when it comes time to repay their debt.
This lender once offered both federal and private student loans. However, in 2014, Sallie Mae stopped servicing federal loans and now focuses singularly on private loans. This split occurred as the larger company, Sallie Mae, divided into two separate entities. There’s Sallie Mae Bank, the consumer banking service that offers those private loans, along with Navient (which remains the federal student loans server).
Sallie Mae is one of the few lenders out there that offers loans to part-time students (most require full-time enrollment status).
In addition to its multiple private student loans, Sallie Mae also offers free quarterly FICO credit scores. That way, you can keep tabs on your credit score while you’re in school and making your monthly payments.
There is also a free online tutoring tool offered by Sallie Mae. Study Starter has more than 120 minutes of live tutoring for online students as well as problem solutions to textbook questions, offered in partnership with Chegg.
What Types of Loans Does Sallie Mae Offer?
A Sallie Mae loan will allow you to cover up to 100% of your school’s costs with a private student loan. These expenses can be used for:
- Undergraduate or graduate school
- Career training
- Bar study
- MBA programs
- Medical school or medical residency
Dental school or dental residency
- Health professions graduate school
- Law school
These loans can be taken out by both full- and part-time students. They cover any education expenses, including:
- Room and board
- Supplies (including a computer for school)
Interest accrues on the loan throughout the life of the loan, including while you are in school. After you leave school, you have a grace period of six months before you have to start making principal and interest payments.
You can apply for loans that are meant to be used on past tuition, something that’s helpful if you have an existing balance from one year or less ago.
How Does it Work
Before you apply for a private student loan through Sallie Mae, it’s a good idea to first ensure that you’ve exhausted all of your other options. If you haven’t yet submitted the FAFSA, make sure you do so.
Sallie Mae tends to offer some of the most competitive student loan options out there, both in terms of repayment terms and interest rates. That said, it’s never a good idea to settle on one lender before you’ve taken the time to compare shops. Consider all of the other options that are out there and get a holistic view of all of your choices.
When you apply for a loan with Sallie Mae, you will apply for the full amount that you need for the full school year. This will incur only one credit check and the funds can be sent directly to your college or school.
To apply, head over to the Sallie Mae website. You will fill out basic personal and financial information and choose the interest rate and repayment option for your loan. It usually takes about 15 minutes to find out if you are approved.
You will then receive notices to review, accept, and e-sign your loan terms. The school will have to certify the loan amount before it can be dispersed to your account.
The average credit score for approved Sallie Mae borrowers is around 748 for undergraduate student loans. That’s pretty high – but don’t panic if your credit score is much lower than that.
You’ll need a minimum credit score (or have a cosigner with a minimum credit score) that is somewhere in the mid-600s. Most borrowers (around 80%) end up applying with cosigners because it’s uncommon for applicants for undergraduate loans to have enough credit history to qualify on their own.
Sallie Mae has a solid reputation among other private student loan lenders. Reviewers praise the low-interest rates and flexible repayment options. It’s easier to make your payments on time – and get that balance down faster – while also avoiding default.
Because Sallie Mae services its own loans in-house, it is easy to get in touch with customer service and get answers to any questions you have. The approval process for these loans is fast, too, so you’ll know right away whether you need to find another lender or reapply with a cosigner.
Because Sallie Mae no longer services government-backed student loans, Sallie Mae loans are not eligible for student loan forgiveness programs.
There are quite a few different repayment options you can choose from, though, which is something that makes Sallie Mae an attractive choice as you search for a private student loan.
Most students will elect for monthly payments via autopay withdrawals from their bank accounts. However, you can also choose to make payments manually, if that’s more convenient for you. Signing up for autopay is advantageous in that you can reduce the interest rate by .25%.
There is no income-based repayment option but you can request in-school deferment when you are going to school. There is also a military deferment option that caps the interest rate at 6% while you are serving in the military.
When you’re in school, you can choose from deferred repayment (make no payments while you’re in school), fixed repayment (pay a fixed amount each month you’re in school), and an interest-only repayment (in which you only pay the interest that is accruing while you are in school).
Sallie Mae also has a Graduated Repayment Period In which you can make interest-only payments for one year after you leave school. You have to request this program on your own.
If the student becomes permanently disabled or passes away, the current loan balance can be waived. In general, there are late fees of 5% of the payment up, up to $25, for each loan. You can release your cosigner after a year of prompt payments, in some cases, too.
You can defer your Sallie Mae loans when you are in school at least half-time. That way, you can lower or delay your payments while you are in school or working on a residency, fellowship, internship, or clerkship.
There is also a deferment option for military service so you can postpone payments while you’re serving in the military.
Interest rates and APRs vary widely for Sallie Mae private student loans because there are so many different types of loans available.
For undergraduate loans, you can usually choose between fixed and variable interest rates. These average between 3.5-12% for fixed-rate loans and 1.13-11.23% for variable loans.
Rates for other programs, like career training, dental school, and graduate school, also vary.
You can borrow as little as $1000 and as much as the cost of your attendance. In addition to the requirements listed above, there are a few other requirements you must meet according to Sallie Mae’s terms of service.
For one, you need to be a US citizen or permanent resident or a non-US citizen with a credit-worthy cosigner who is a citizen.
Most Sallie Mae private loans do not have income minimums, meaning you don’t have to make a certain amount of money to apply.
Sallie Mae also does not look at your debt-to-income ratio for many of its loans. You can’t, however, have an open bankruptcy.
If you are not approved for a loan, the lender will likely provide you with the reasons for this. You can either consider other methods of paying for college or you can reapply with a cosigner.
Sallie Mae private student loans are a great fit for well-qualified borrowers who like the idea of an interest-only repayment after they leave school. They’re also preferred by undergraduates who aren’t planning on attending full-time and for international students who need another way to cover college costs.
A Sallie Mae private student loan could be a great option to help you pay for school, too. The interest rates are competitive, and there are a variety of repayment options available. If you’re considering taking out a loan to finance your education, be sure to check out the Sallie Mae private student loans and weigh all your options.
Student loans might not be the right choice in every situation, but they can help bridge the gap to make college more affordable.