Sallie Mae Student Loans Review: Smart Option Student Loan for Undergraduates

May 23, 20230

Sallie Mae student loans can be a good fit for undergraduates who need private loans to afford college. This is especially true if you:

  • Want to remove your cosigner from the loan in the future
  • Are looking for a loan that you can use for part-time study
  • May need lower payments for a year after graduating

Sallie Mae, though, offers interest rates that can reach much higher than what the federal government provides. Make sure to explore federal student loans first since they have more flexible repayment programs and most don’t require a credit check.

  • How to apply for Sallie Mae undergraduate student loans
  • How Sallie Mae deferment and forbearance works
  • How to make Sallie Mae student loan payments
  • Pros and cons of Sallie Mae undergraduate student loans
  • What other types of student loans does Sallie Mae offer?
  • How to refinance your Sallie Mae student loans
  • Sallie Mae student loans FAQ

Sallie Mae student loans review: Undergraduate student loans

Sallie Mae Undergraduate Student Loans
APR range ● Fixed: 4.50% – 14.83% APR
● Variable: 5.87% – 16.20% APR
Note: Rates include 0.25 percentage-point interest-rate reduction for autopay
Loan amount $1,000 up to total cost of attendance, minus other financial aid you receive
Loan terms 10 to 15 years
Fees No origination or prepayment fees; late fee of 5% of payment amount, up to $25 maximum
Grace period 6 months after leaving school; Sallie Mae also refers to this as “separation period”
Cosigner release Available after 12 months of full, on-time payments without periods of forbearance or payment-reduction programs; the primary borrower must also pass credit and income check
Minimum credit score Not specified

*Note above rates are accurate at the time of this post. For real-time rates head here.

Eligibility requirements

To qualify for a Sallie Mae student loan, you must:

  • Be enrolled in a degree-granting school full-time, half time or less than half-time; since you don’t have to be a full- or half-time student, you can use a Sallie Mae student loan for part-time study, a certificate course, or a class that meets only for a winter or summer session
  • Pursue a bachelor’s degree, associate degree, or certificate
  • Be a U.S. citizen or have a U.S. citizen or permanent resident cosigner
  • Have a history of paying back other loans and credit cards as agreed, or a cosigner who does

Sallie Mae doesn’t disclose a minimum credit score requirement for borrowers. But it requires sufficient credit history to determine your likelihood of on-time repayment.

That means many undergraduates without experience managing other loans or credit cards will need a cosigner to qualify. Applicants with credit scores in the good or excellent range — generally above 700 on an 850-point scale — will have the best chance of being approved and receive the lowest interest rates.

In-school repayment options

Sallie Mae repayment options are more limited than what federal student loans offer. You can decide when to begin making full interest and principal payments, though you won’t have access to income-driven repayment plans, for instance. These are the three Sallie Mae repayment options from which you can choose:

  • Deferred repayment: You’ll make no payments while you’re in school and during your six-month grace period. As a result, you’ll receive a higher interest rate than if you were to choose the interest repayment plan, and you’ll likely pay more over time.
  • Fixed repayment: This option requires you to pay $25 a month in school and during the grace period, limiting the amount of interest that accrues. Like the deferred repayment plan, though, unpaid interest will still capitalize — or get tacked onto your balance — at the end of your grace period.
  • Interest repayment: You’ll pay off the loan’s interest monthly while in school and in your grace period. That will keep your principal balance from growing and qualify you for a lower interest rate.

How to apply for Sallie Mae undergraduate student loans

Start your application online by clicking “Apply for a loan” on Sallie Mae’s website. Have the following information ready to include in the application:

  • School where you’re enrolled or planning to enroll
  • Degree you’re pursuing
  • Major or course of study
  • Semester of enrollment
  • Year in school
  • Amount of loan you’re seeking
  • Financial aid, from school and other sources, you plan to receive
  • Company name and income before taxes (if employed)
  • Current address, plus previous address if you’ve lived in your current home for less than a year
  • Social Security number
  • Bank account information
  • Monthly housing payment
  • Two personal references

Sallie Mae will conduct a credit check and may ask you for additional data to complete its review. If you’re approved, you’ll choose a repayment option and decide whether to go with a fixed interest rate or a variable one (which can change over time). Once you’ve accepted and signed your loan documents, Sallie Mae will then verify with your school the information you’ve provided.

How to apply with a cosigner

If you’re applying with a cosigner, they will also enter personal, financial, school, and employment information, either at the same time you apply or separately.

Sallie Mae will check your cosigner’s credit and follow up if it needs additional information to make a decision.

Applying with a cosigner could also make it easier to gain multiyear approval for additional student loans. Sallie Mae claimed on its website that 95% of returning customers who have cosigners qualify for additional funding.

How to apply for Sallie Mae cosigner release

As a borrower, you can apply to remove your cosigner from the loan using Sallie Mae cosigner release. You’re eligible once you’ve graduated or completed a certificate program and you’ve made 12 full on-time payments toward your Sallie Mae loan. Neither interest nor fixed payments during school or your grace period qualify. You also can’t have entered into forbearance or a graduated repayment period for 12 months before applying for cosigner release.

Since you must be able to make loan payments on your own, Sallie Mae also requires proof of income and a credit check.

How Sallie Mae deferment and forbearance works

Sallie Mae offers in-school deferment for up to 48 months while enrolled in college or graduate school full-time or half-time. You won’t have to make payments, but interest will still accrue. You can also defer payments while you’re completing a qualifying residency, internship, clerkship, or fellowship for 12 months at a time for a total of 60 months. Interest will accrue on your Sallie Mae student loan in those cases, too.

Another way to pause payments is to put your loan into forbearance. This option is available if you’re experiencing financial difficulties. You can apply for forbearance in three-month increments for a total of 12 months. Interest will accrue, and you might have to make a payment first, which will go toward your loan balance.

Alternatively, if you need to make smaller payments in the year after your grace period ends, you can request to receive a graduated repayment period, which will let you make interest-only payments for 12 months.

How to make Sallie Mae student loan payments

The best way to make Sallie Mae student loan payments is through autopay from your bank account. Sallie Mae will deduct your required payment amount — or more if you choose to pay extra each month — from your account automatically. That way, you won’t miss payments, and you’ll get a 0.25 percentage-point reduction on your interest rate.

You can also pay Sallie Mae online, by phone, by mail, or by using the Sallie Mae mobile app. Cosigners have the ability to make payments on behalf of borrowers.

How to contact Sallie Mae customer service about your student loans

New applicants: Contact Sallie Mae customer service at 855-756-5626 from 8 a.m. to 9 p.m. EST Monday through Thursday or 8 a.m. to 8 p.m. EST on Fridays.

Existing customers: Call 800-472-5543 from 8 a.m. to 9 p.m. EST Monday through Thursday, 8 a.m. to 8 p.m. EST on Fridays, and 9 a.m. to 6 p.m. EST on Saturdays.

Pros and cons of Sallie Mae undergraduate student loans

Pros Cons
● Option to apply for cosigner release after 12 full-on-time payments
● One year of interest-only payments available through a graduated repayment period
● Non-U.S. citizens can apply with a U.S. citizen or permanent resident cosigner
● Loans available to students attending school less than half time
● Higher maximum interest rates than federal loans
● Forbearance is limited to 12 months total over the life of the loan
● Interest accrues during all periods of deferment or forbearance; federally subsidized loans and Perkins loans don’t accrue interest during periods of deferment
● Only U.S. citizen or permanent resident borrowers can qualify for cosigner release

What other types of student loans does Sallie Mae offer?

How to refinance your Sallie Mae student loans

After graduation — and if you meet the credit and income requirements — you may have the option to refinance your Sallie Mae student loans.

Student loan refinancing allows you to replace one or multiple student loans with a new one at a potentially lower interest rate. You’ll need to show solid income and good or excellent credit to qualify. Similar to an undergraduate student loan, you can apply with a cosigner to improve your approval odds or to potentially receive a lower interest rate. Refinancing lets you choose a new lender to work with if you’re unhappy with your loan’s original interest rate, term, customer service, or other features.

First, you should seek out quotes from multiple lenders. Then, pick the lender and loan terms that work best for you. Next, complete an application, but make sure you’re continuing to make payments on your current loan until you receive approval to stop.

Sallie Mae student loans FAQ

Is Sallie Mae a federal loan? No. The Sallie Mae Smart Option Student Loan for undergraduates is a private loan. You won’t receive federal loan protections, such as income-driven repayment or student loan forgiveness.

Are there added benefits for service members? Service members eligible for the Servicemembers Civil Relief Act receive a maximum interest rate of 5% during military service and for one year thereafter.

Do I need an established credit history to apply? Yes. Without a sufficient credit history, your application is unlikely to be approved. Apply with a cosigner to increase your chances of approval and gain eligibility for lower interest rates.

How long does it take to apply? Sallie Mae says the online application takes about 15 minutes to fill out, and you could receive your loan in as few as 10 business days after approval.

Is student loan prequalification offered? No. You must fill out a complete application to see the interest rate for which you qualify, which means Sallie Mae must perform a hard pull on your credit report. That can have a negative impact on your credit score.

What happens after a loan is approved? Your college will certify the loan, and Sallie Mae will disburse the money to the school. You might receive a refund if you borrowed more money than your school needs to cover your expenses. You can return the refund to Sallie Mae or use it for education costs and pay it back with the rest of your student loan.

Can I see my credit score through Sallie Mae? Yes. After your loan is disbursed, Sallie Mae borrowers and cosigners can receive a free FICO Score 8 once a quarter.

How are my payments applied? Your monthly payment goes first to unpaid fees, then unpaid interest, then principal. If you pay extra, your overpayment will reduce your principal balance.

Will my balance be waived if I die? Yes. Sallie Mae will also waive your balance if you become permanently and totally disabled.