If you want to refinance your Sallie Mae student loan, you have two basic options. You can refinance your student loan through Sallie Mae or you can obtain a second loan from a different lender and use the funds to payoff the Sallie Mae student loan.
You can refinance your Sallie Mae student loan through the Sallie Mae website. First, create an online account by inputting your personal information and data concerning your loan. You can get the necessary loan data from any Sallie Mae loan statement. Next, find the “Manage Your Account” section of the Sallie Mae website. This interface will allow you to adjust the amount of your monthly payments, request a deferment, or ask for a forbearance. Any adjustment to your loan must be approved by Sallie Mae and you will need to provide supporting documentation regarding your personal finances.
You eligibility for any adjustment to your Sallie Mae student loan will depend on the current status of your line, length of time since your graduation, occupation, and income. The online eligibility form leaves little room for additional information that may be related to your ability to make your student loan payments. If you feel you need assistance in requesting a Sallie Mae refinance, you have the option of calling the Sallie Mae student loan customer service department (888-272-5543) and speaking with a loan specialist.
If you decide to call Sallie Mae, be sure to gather your financial information and know what payment terms you are requesting prior to speaking with a representative. While Sallie Mae’s refinancing decision is primarily based on your ability to pay, you also have the opportunity to provide the representative with any ancillary information that may improve your chance of getting a student loan refinanced.
Before you apply for a refinance of your Sallie Mae student loan, be sure you use the “Sallie Mae loan repayment calculator” to identify a monthly payment you can afford. The loan repayment calculator will also show you the length of time it will take for you to payoff your loan and the total amount of interest you will incur over the lifetime of the loan.
You also have the option of obtaining a second loan from a different lender and using the funds from that second loan to payoff your Sallie Mae student loan. Although dependent on your individual circumstances, it is possible for you to get better payment terms from a second lender than you could from a Sallie Mae refinance. Deciding to take out a second loan and payoff your Sallie Mae student loan will eliminate your ability to request a refinance from Sallie Mae and may change your tax situation.
Student loan debt is treated differently than debt from other types of loans. The details are state-specific and based on your income, but the interest on student loan debt is generally tax-deductible and thus more advantageous than debt from other types of loans. Refinancing your student loan through Sallie Mae will usually maintain the tax advantage while a second loan from a different lender will likely result in a loss of the tax advantage.
If your financial situation is truly dire, you should know that student loans debt is different than consumer debt in bankruptcy. Bankruptcy laws vary by state, but in most circumstances it is more difficult to wipe-away your student loan debt by declaring bankruptcy. Treatment of liabilities in bankruptcy is complex and you should seek the advice of a bankruptcy attorney licensed to practice in your state if you are contemplating this path.
Refinancing your Sallie Mae student loan is a major financial decision. Make sure you understand your new payment amount and carefully read any contract terms prior to completing a refinance. Most importantly, be sure to make your payments on time to protect your credit and prevent your loan from being sent to collection.