Since the 1970s, Sallie Mae has serviced or provided education loans for families to pay for college and graduate school. Sallie Mae lend consolidation was besides available in the past, but they ’ ra no longer an option for borrowers .
That said, you might have federal loans that are eligible for conduct consolidation through the union government. But your private student loans won ’ triiodothyronine be eligible for federal consolidation — only for scholar loanword refinance .
In early words, if you ’ rhenium searching for alternatives to Sallie Mae loan consolidation, your options will be different depending on whether you have federal or private scholar loans .
Sallie Mae loan consolidation is no more
Before 2008, Sallie Mae offered consolidation loans. If you had multiple student loans, you were able to combine them through Sallie Mae consolidation .
But Sallie Mae no longer offers a consolidation loanword, nor does it offer scholar loan refinance. The company now primarily provides private scholar loans for college, a well as for career training and K-12 schools .
Of course, merely because Sallie Mae consolidation loans are no longer a thing doesn ’ metric ton mean you ’ re out of luck. Borrowers have a broad stove of choices for repaying their student debt, whether they need consolidation ( for union loans only ) or refinancing ( for federal or secret loans ) .
Consolidation for your federal student loans
If you have federal scholar loans, you can consolidate them with a federal Direct Consolidation Loan. Any recent Sallie Mae loans won ’ deoxythymidine monophosphate count since those are individual, but people who borrowed years ago might have once had their federal scholar loans serviced by Sallie Mae, as it used to be a government-sponsored entity before it became a private company .
furthermore, federal scholar loans serviced by Navient ( an outgrowth company of Sallie Mae ) could besides qualify. According to Federal Student Aid, Stafford Loans, Direct Loans and Direct PLUS Loans are all eligible for consolidation .
consolidation can help you manage repayment more well since you ’ ll alone have a individual bill to track. Plus, it lets you choose new terms for the loanword, possibly extending them to 20 or 25 years .
Extending your terms could help if you ’ rhenium struggling to pay your bills since your monthly requital will go down. But it besides means you ’ ll be in debt for longer, so you ’ ll yield more pastime over the life of the loan.
Plus, consolidation could cause your interest rate to slightly increase, as your fresh rate will be the slant average of your previous rates rounded up to the nearest one-eighth of a share point. still, this increase in interest might be worth it if you need the relief that comes with lower monthly scholar lend bills .
Refinancing for both federal and private student loans
Another refund option is student loan refinancing. Although Sallie Mae doesn ’ deoxythymidine monophosphate offer refinance, other banks, credit unions and on-line lenders do. Leading lenders in the refinance outer space include Citizens Bank, Sofi and Earnest .
Both private and federal scholar loans are eligible for refinancing. You can choose to refinance a individual loan, possibly to lower its matter to rate, or to refinance multiple loans to combine them .
note that if you refinance federal scholar loans, they basically become secret loans. As a result, you lose access to federal programs and protections such as income-driven repayment plans and Public Service Loan Forgiveness .
To refinance, you must meet a lender ’ mho underwrite requirements for credit and income — or apply with a cosigner who does. Depending on your or your cosigner ’ second creditworthiness, you could qualify for lower sake rates than the ones you have .
Plus, you can choose new repayment terms, possibly lengthening your term to lower monthly payments or shortening it to move up your repayment date .
Estimate the long-term costs before you make changes
Both consolidation and scholar lend refinancing give you the opportunity to restructure your debt in a way that makes it easier to repay .
consolidation can simplify your debt and lower your monthly payments with a longer refund term. But refinancing could save you money with a lower interest rate and besides allow you to select a short or longer term, depending on what your goals are .
Whichever choice you choose, make certain you understand how it could impact your finances.
Play around with our scholar lend payment calculator to estimate the short- and long-run costs of consolidating or refinancing. And if you choose refinancing, workshop approximately to get your best rates .
By getting a clear understand of your costs of borrowing, you can make an inform choice about refinancing or consolidating your Sallie Mae or federal scholar loans .
Rebecca Safier contributed to this report card .