Is Sallie Mae a good student loan?
Sallie Mae is a great option for those interested in borrowing from a well-established lender with low rates, few fees and a variety of loan options. Borrowers with more unique educational needs, like funds for an online certification course, may have more luck finding a loan with Sallie Mae than with similar lenders.
Sallie Mae's private student loans are best for those who want to be rewarded for making payments while in school. For example, Sallie Mae offers lower interest rates to borrowers who make monthly interest-only payments while in school.
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.
If you signed up for a Sallie Mae loan when you entered college, you may have a high interest rate because you were a college student with no credit history and no full-time income. If you now have a stable job and a good credit score, you may be eligible for a lower interest rate.
Lender Sallie Mae used to offer federal student loans, and if you received one, you may be able to qualify for loan forgiveness. But federal student loan forgiveness can be hard to get — and if you have a private student loan through Sallie Mae, federal forgiveness is not available.
Typically, prequalifying for a student loan includes a soft credit check, which does not affect your credit score. Thus, if you apply for a loan with Sallie Mae, a hard credit check will be done, which could temporarily hurt your credit score.
Sallie Mae does not specify a minimum credit score requirement for its student loans. However, a strong credit score can improve your chances of approval for a loan or a better rate. If your credit score may not be good enough, you can get a co-signer with good credit to include on the loan.
Sallie Mae does not require a cosigner if you meet certain criteria to qualify on your own: Student loan borrowers must be 18 years old at the time of application and a U.S. citizen or permanent resident of the country. Student loan borrowers must be enrolled at least part time in a college or university.
Your student loan repayment term
Federal loans generally have a standard repayment schedule of 10 years. For private student loans, the repayment term can range anywhere from 10-20 years, depending on the loan. You'll be given a definite term for your loan when you apply.
For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website may be subjected to a lower maximum loan request amount.
Can I pay off my Sallie Mae loan early?
There's no penalty for paying early or paying extra.
Those who borrowed from Sallie Mae after this 2014 split have private student loans, which aren't eligible for federal forgiveness programs. However, Sallie Mae will discharge debts for borrowers who die or become totally and permanently disabled.
Having loans does not mean taking out a certain amount of money and paying that same amount back. There are two reasons that you'll pay back more—accruing interest and capitalization. Interest starts to accrue (grow) as soon as you take out your loan, and it continues to add to the amount you'll have to pay back.
A False Claims suit was filed against Sallie Mae by former U.S. Department of Education researcher, Dr. Oberg, in 2009. The suit alleges that Sallie Mae and other lenders deliberately overcharged the U.S. government. The findings by Oberg were labeled among higher education policy analysts as the 9.5 scandal.
Lawsuits later revealed that one set of these predatory Sallie Mae private student loans had default rates ranging “between 50 and 92 percent every year from 2000 to 2007,” and that Sallie Mae's own expectations were that these loans would default at rates as high as 92 percent.
Delinquency and default
Delinquency occurs when you fail to pay all or part of your monthly student loan payment. You may be charged late fees for delinquency, which can add to your Total Loan Cost. You may lose any interest rate reduction programs you were eligible for.
College Ave offers more flexible payment options than Sallie Mae, allowing you to check your rate without affecting your credit score. Sallie Mae offers a faster co-signer release period and more resources, such as a scholarship search tool and free quarterly FICO scores.
“Paying off student loans can positively impact someone's credit history,” says L.J. Jones, a financial planner at Developing Finance, a financial planning firm. At the same time, not paying your loans on time could damage your credit score.
Paying your student loans on time can help you build credit and maintain a positive credit score. In contrast, failure to make payments will hurt your score. Establishing a good credit history and credit score affects your future ability to take out loans and use credit at lower interest rates.
Sallie Mae offers loans for U.S. students in all 50 states and international students. However, parent, spousal, and DACA recipient loans aren't available through this lender.
Who qualifies for Sallie Mae?
Sallie Mae loans are subject to credit approval, identity verification, signed loan documents, and school certification. This loan is available to students at participating schools and is not intended for students pursuing a graduate degree. Student or cosigner must meet the age of majority in their state of residence.
Some reputable loan providers known for not having GPA requirements include Sallie Mae, Discover, and Wells Fargo. These lenders typically base their loan decisions on factors such as the applicant's credit score, income, and employment history.
Loan amount changes can be requested by the borrower, cosigner, or school at various points in the application process. The borrower or cosigner can contact us to request to increase the loan amount.
Federal student loans are available to all college students, regardless of income, and don't require a credit check. If you still have gaps in funding after tapping financial aid and federal loans, you may also be able to qualify for private student loans, even with a low income.
Most private lenders require you to have a credit score of at least 670 or higher on a 300-850 scale used by FICO, the most widely known credit score. If you don't have a credit history, you'll need a co-signer with a good credit score and a steady income in order to qualify for the loan.
