Sallie Mae Corporation (SLM) is the one of the largest U.S. private student loan lenders that offers different student loan alternatives to undergraduate, graduate and professional college students and with the rising number of borrowers every year. The most popular Sallie Mae student loan options are Smart Option Student Loan (for undergraduate and graduate students), Career Training Smart Option Student Loan (for undergraduate students), residency and Relocation Loans and Bar Study Loan (for graduate students). Sallie Mae Corporation also offers a student loans consolidation option. Sallie Mae private student loans are available in two main varieties. The first category of loan is the private student loan you got from Sallie Mae on your own initiative. The second type is a loan obtained through the Federal Family Education Loan program.
Federal Student Loans Consolidation
Student loans consolidation is type of loan which allows borrower to replace several student loans with just one. Under this plan, you can borrow enough money in one loan to repay other student loans. The Sallie Mae Federal Consolidation Loans are a part of the Federal Family education Loan Program (FFELP), which means that the U.S. federal government sets the terms for loans consolidation. Private loan lenders may apply their own benefits to attract borrowers to their consolidation products:
- Since July 1, 2006, Federal Consolidation Loans have a fixed interest rate. The interest rate is calculated based on the average amount of your federal loans as of the date of the consolidation application. The interest rate is limited at 8.25.
- Federal Consolidation Loans are excluded from credit checks.
- Sallie Mae terms include a $5,000 minimum on federal loans. Borrowers with at least $10,000 may meet the requirements for a 1.00% interest rate reduction after 36 payments on time.
Sallie Mae Student Loan Consolidation
Student loan consolidation at Sallie Mae allows you to apply for a private loan and use it to repay several private loans, so as to consolidate the amount and join multiple loan repayments into one. By taking out a single large loan students can pay off the small loans, which allow you the ability to make one monthly payments. Other advantages of student loan consolidation include reduced interest rates, fixed interested rates, and even a longer repayment option.
The Sallie Mae student loan consolidation is a credit-based loan, and you must meet some particular requirements in order to qualify for this loan option:
- You must have a good credit record.
- If you don’t have a good credit history, you may be eligible to apply with creditworthy cosigner.
- You must be working or have some other foundation of monthly income which will allow you to repay the loan. Sallie Mae will estimate your ability to manage your debt based on your income.
- You will have to submit the copy of your monthly budget statement to Sallie Mae to decide if you can manage your monthly loan repayments.
Sallie Mae Consolidation Loan Terms
- Minimum of $5,000 required for loan consolidation.
- Variable interest rates
- Borrowing with a cosigner may increase borrowing limit
- Consolidation alternative is offered for graduate students particularly those who may have borrowed on SLM’s Law, Med, Dental, or MBA Loans.
- Once your loan is disbursed, payments start within 30 days.
- There are no fees for early repayment.
Useful Tips on Sallie Mae Loan Consolidation
Before applying for SLM student loan consolidation, learn about the main benefits and drawbacks of having your loans consolidated. In case you consolidate your federal student loans into just one payment, you will generally minimize your monthly payments by as much as 25%. Decide if the loan consolidation is the best option for you. Before you apply for the Sallie Mae loan consolidation, have all of your student loan information on hand so that you can answer any questions.
Decide whether you want to save money over time on your student loans or if you want to go for the lowest possible monthly loan payment. Check the consolidation interest rates and learn about option of joining different loans in one at fixed interest rate. This rate will be based on the average of the interest rates of your current student loans. Regularly, you can acquire an additional rate discount if you get set up for electronic payments from your bank account.
Allow yourself enough time to consolidate your student loans at Sallie Mae. It may be a good idea to make your consolidation effective at to the end of the grace period on your current student loans.
Sallie Mae Consolidation Option Downside
Before applying for student loan consolidation at Sallie Mae, bear in mind that consolidation loans may be of assistance in the short term, but in the long-term you will pay significantly more for the interest and your education will cost you considerably more.