Private student loans are a way to fill in the gaps when federal loans don’t cover the cost of college.
Not all private student loan lenders are equal.
Sallie Mae student loans provide flexible options for undergrad and grad students.
Let’s take a closer look at Sallie Mae and why they could be the right lending option for borrowers.
Guide to Sallie Mae Student Loans:
What is Sallie Mae?
Sallie Mae started as a government-sponsored organization in 1972.
They became a private company in 2004. In 2014, Sallie Mae split into 2 separate companies: Sallie Mae Bank, a consumer bank, and Navient, one of the largest federal student loan servicers.
Sallie Mae no longer services any federal student loans. Instead, they are a lender for private student loans, personal loans, and other consumer products. Sallie Mae is also dedicated to borrower education.
Their website is full of useful information on student loans in general, not just their own offerings.
Types of Student Loans offered by Sallie Mae
College students interested in private loan should take a look at Sallie Mae.
They have a variety of different student loans available. Sallie Mae has loans to fit just about any need.
Smart Option Student Loan for Undergraduate Students
Sallie Mae’s offering for undergraduates is called a Smart Option Student Loan.
How is this different from other undergrad loans? You can get a Smart Option loan for the entire cost of college, not just part of it.
This includes tuition, room & board, fees, travel, and more. It also comes with 4 free months of Chegg Study, which provides homework and study support for college students.
Undergrad loans have no origination fees or prepayment penalties. Sallie Mae loans variable interest rates start at 3.25% APR. Fixed interest rates start at 4.74% APR.
Sallie Mae undergraduate loans have flexible repayment terms from 5 to 15 years.
Graduate Student Loans
Students pursuing a Master’s or Doctorate could be eligible for grad school loans through Sallie Mae.
Grad loans also cover 100% of school costs.
They also offer:
- No origination fee
- 6-Month grace period
- Deferred repayment
- Free quarterly FICO credit score
- Cosigner release
Variable interest rates start at 4.25% APR for grad school loans. Fixed interest rates begin at 5.50% APR. Grad loans have a 15-year repayment period.
Sallie Mae Parent Loans
Parents looking to cover school costs for their children can apply for a Sallie Mae Parent Loan. Parent loans are offered for undergrad, grad, and certificate programs.
There are no origination fees or prepayment penalties on parent loans.
They cover 100% of school costs and have a repayment period of 10 years. Variable and fixed interest rates both start at 5.49% APR. This could be a great alternative to federal Parent Plus loans.
Other Sallie Mae Student Loans
Sallie Mae has plenty of other student loans available too.
What other loans are offered through Sallie Mae?
- MBA loans
- Medical school loans
- Medical residency loans
- Dental school loans
- Dental residency loans
- Health professions grad loans
- Law school loans
- Bar exam study loans
- K-12 loans
- Career training student loans
Each loan has its own interest rates and repayment period options. Take time to explore their options to get more details on each loan.
If you’re looking for private student loans, chances are Sallie Mae has one that fits your needs.
Repayment Options for Sallie Mae Student Loans
Sallie Mae offers three repayment options for their undergraduate Smart Option loans:
Borrowers don’t make any scheduled loan payments while they’re in school. There is a 6-month grace period after leaving school before repayment begins. This is most likely the costliest option.
That’s because interest will accumulate while you’re in school. It will get added to your loan principal at the end of your grace period.
This payment option involves paying $25 every month you’re in school as well as during the grace period. This most likely will cover part of your interest while in school, but not all of it.
Any unpaid interest will be added to your principal amount at the end of your grace period.
This option allows you to pay your interest every month you’re in school and during the grace period. You’ll be paying more upfront than with the other payment options.
But you won’t have any accrued interest added on to your principal after your grace period.
You always have the option to pay your student loans while in school and during the grace period. Financially, this probably isn’t an option for most college students.
It depends where you stand financially, but most borrowers won’t have the money while in school.
Interest rates for fixed and deferred options carry a higher interest rate than the interest repayment option. When your loan is disbursed, you will start being charged for interest.
This continues while in school and during the grace period. After that, any unpaid interest is added to your loan principal.
Federal student loans are awarded based on financial need. Private loans, however, are based on a borrower’s credit. Your credit clues lenders into the risk attached with lending to you.
One way to get around this dilemma is to have a cosigner with excellent credit. This increases your chance of being approved for a loan and getting a good interest rate.
Sallie Mae offers one of the shortest cosigner releases available from a private lender. This may help you secure a creditworthy cosigner while keeping their liability to a minimum.
Student Loan Application Process
The application process for Sallie Mae student loans is easy. There’s no cost to apply for their private student loans. You can apply through their website. You’ll fill out some personal and financial information to start.
Then, you will choose your interest rate type and desired repayment option. If you have a cosigner, they’ll need to supply their financial information as well.
The entire process should take roughly 15 minutes from start to end. Sallie Mae offers a simple process for potential borrowers.
Unfortunately, you won’t know the kind of interest rate they are eligible for until after the application process is complete. This does require a hard credit pull.
Make sure you have all your personal and financial information handy to save time.
You’ll need information like:
- Social security number
- School information
- Requested loan amount
- Financial Aid amounts (if applicable)
- Financial information, like bank accounts, mortgage/rent payments, etc.
What We Like About Sallie Mae Student Loans
- Cosigner Release
- Options for Part-Time Students
- Interest-Rate Reduction for Automatic Payments
- Multitude of Options
Sallie Mae offers a generous cosigner release compared to other private lenders.
To get your cosigner released from their responsibility, you need to make 12 full, on-time payments (interest and principal) on your student loan.
There’s an application process for the co-signer release.
Students who choose to set up automatic loan payments receive a 0.25% interest rate reduction. It doesn’t seem like much, but it adds up quickly. Be sure to take advantage of this simple discount.
Sallie Mae is one of the few private lenders that offer options for part-time college students. This opens up great loan options for those who are attending school while working.
Few lenders offer the wide array of loan options that Sallie Mae does. They have a loan for almost every type of student.
This means you aren’t stuck with a student loan that doesn’t fit your needs. Sallie Mae also has varying repayment options to fit your needs.
What We Don’t Like About Sallie Mae Student Loans
- Hard Credit Pull
- Defers Interest
Not everything is great when it comes to Sallie Mae student loans. The main criticism of Sallie Mae is their credit check during the application process.
Many private lenders perform a soft credit pull to determine if you qualify for a loan.
A soft pull doesn’t hurt your credit score. Sallie Mae performs a hard credit pull, which can bring your credit score down.
There’s no way to check what type of interest rate you qualify for with Sallie Mae unless they do a hard pull.
While they offer several repayment options for borrowers, this has the potential to be a bad option. Any option that defers interest could lead to your student loan debt growing quickly.
It’s nice to be able to defer payments while in school, but this could be costly down the road. What’s right for you depends on what’s important to you.
Is Sallie Mae for You?
Students in need of financial aid beyond federal loans should look at Sallie Mae. The same goes for graduates looking to extend their studies with grad school or other postgraduate degrees.
They offer financial aid solutions for most students. This is especially true of their undergraduate Smart Option student loans.
Sallie Mae offers flexible repayment options with no origination fees or application fees.
With good credit or a creditworthy cosigner, you can secure low-interest rates and potentially save thousands of dollars over the life of your loan.