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Can You Refinance Sallie Mae Student Loans?

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Sallie Mae offers private student loans to help college students pay for school. Once you’ve graduated, you may have the chance to refinance Sallie Mae loans with Sallie Mae or with another lender.

Refinancing student loans can come with several benefits, but it’s not for everyone. Here’s what you should consider before you refinance your Sallie Mae loans.

How can I refinance Sallie Mae student loans?

If you have Sallie Mae student loans, you can refinance them with Sallie Mae or with another private student loan company that offers refinance loans. You can start the refinance process by shopping around and comparing student loan refinance interest rates and other terms.

Many lenders allow you to get prequalified before you submit an application. Prequalification doesn’t require a hard credit check, so it won’t impact your credit score, but it can give you an idea of whether you have a good chance of getting approved and what your loan terms might look like.

Once you find a lender you like, you’ll submit an application. If you’re approved and you accept the loan offer, the lender will pay off your Sallie Mae student loans, and you’ll start making payments to the new lender going forward.

When should I refinance my Sallie Mae student loans?

Here are some reasons why you might want to refinance your private student loans from Sallie Mae:

  • You qualify for a lower interest rate than what you’re paying right now.
  • You want to shorten your repayment term and pay off your loans faster.
  • You’re experiencing financial hardship and want to switch to a longer repayment term.
  • You’ve had a bad experience with Sallie Mae and want to refinance with a lender that has good customer service.
  • You’re a parent who borrowed money on behalf of your child and you want to transfer the debt to them.

Carefully consider your situation and why you’re thinking about refinancing. Also keep in mind that it’s best to wait to refinance until you have a solid credit score and income. While the minimum credit score requirements for refinancing can be in the mid-600s, for instance, having a higher credit score will give you the lowest rates.

The prequalification process can give you a good idea of what you qualify for based on your current credit and income situation.

What are the benefits of refinancing?

Refinancing your Sallie Mae student loans can have a positive impact on your student loan repayment plan. Here are some of the top benefits you may enjoy:

  • Lower interest rates: You may be able to qualify for a lower interest rate, which can save you hundreds or even thousands of dollars on your loan. Refinancing is a particularly good idea if you have a variable rate but want to lock in a fixed rate when interest rates are low.
  • Payment flexibility: If you want to accelerate your repayment or reduce your payment with a longer term, you can’t shorten or extend your repayment term with your existing lender. With student loan refinancing, you could choose a repayment term from a range of five to 20 years, depending on the lender. Whether you want to pay off your debt early or extend your term to lower your payment, refinancing allows you to make that choice.
  • Different features: Each lender has its own set of features that borrowers can take advantage of. If you find a lender that offers a benefit that you don’t get with Sallie Mae, refinancing and moving your debt to the new lender can give you access to what you’re looking for.
  • Offload debt: If you’re a parent who borrowed to help your child get through school, some refinance lenders allow you to transfer that debt to your child. Both parties will need to agree, and your child will need to be able to qualify to take on the debt on their own. If they don’t, you may need to co-sign the loan application, but it can still be a good way to offload that payment responsibility.

Next steps

Refinancing Sallie Mae loans can make it possible for you to save money, enjoy a little more control over your repayment plan and take advantage of features that you might not currently have. To determine if refinancing your loans is a good idea, start by looking at current student loan refinance interest rates and compare Sallie Mae’s features with those of other lenders.

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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