Sallie Mae has a long history in the student loan world. Since the 1970s, this student loan giant has provided or serviced loans for college and graduate school students, as well as their parents.
Although Sallie Mae used to be government-sponsored, itâ€™s now a private company that lends private student loans to cover education costs. And while it once offered consolidation options, you can no longer consolidate student loans through Sallie Mae.
So if you were looking for Sallie Mae loan consolidation, the bad news is that it no longer exists. But the good news is you have two other options for combining multiple loans into one.
While Sallie Mae loan consolidation is a thing of the past, you still have two options for consolidating debt: borrowing a direct consolidation loan from the federal government, or refinancing with a private lender. Hereâ€™s what you need to know about each.
If youâ€™ve got federal student loans, then you can apply at StudentLoans.gov to combine them into a single direct consolidation loan.
The main benefits to federal student loan consolidation include:
Although consolidating helps you simplify repayment and lets you choose a new repayment plan, it wonâ€™t save you money on interest. In fact, if you choose a longer term than what you have now, youâ€™ll likely pay more interest over the life of your loan.
Itâ€™s important to note that consolidation doesnâ€™t lower your interest rate, but rather takes the weighted average of your previous rates and rounds up to the nearest one-eighth of a percent. So, if youâ€™re looking to save on interest, student loan refinancing could be a better option.
Your second option for combining several pieces of debt into one is via student loan refinancing. Unlike federal consolidation, you refinance with a private lender, such as a bank or credit union.
You can combine both federal and private student loans through refinancing. Note, however, that if you refinance federal loans, you lose access to federal programs, such as income-driven repayment and federal loan forgiveness.
Refinancing has its own benefits, however, with one of the biggest being the potential to save money by lowering your interest rate. Here are some major reasons to refinance:
If youâ€™re interested in refinancing student loans, itâ€™s easy to get a rate quote from a few lenders. By checking prequalification offers, you can see if you could snag a lower interest rate on your student debt.
The average student loan borrower holds 3.7 loans, according to a 2017 report by Experian. With so many loans and loan servicers, you could have trouble keeping track of your monthly bills.
But if you consolidate your loans, youâ€™ll only have to make one payment per month to a single loan servicer â€” plus, you might get the added benefit of selecting different repayment terms or even lowering your interest rate.
Even though you canâ€™t consolidate student loans with Sallie Mae anymore, you still have the option of consolidating with the federal government or refinancing with another private lender. Before making any changes to your debt, though, make sure you understand the differences between federal consolidation and private refinancing.
Once youâ€™ve thought through the pros and cons of each, you can choose an approach that will bring you one step closer to a debt-free life.
5.99% To 35.99% APR
6.99% To 14.99% APR
6.99% To 24.99% APR
3.34% To 16.99% APR
By clicking â€śSee Offersâ€ť youâ€™ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.
This Cash Back Number May Surprise You
Best Travel Credit Cards With No Annual Fee
Getting Approved For 1 Of These Credit Cards Means You Have Excellent Credit
2 Credit Cards Charging 0% Interest until 2019