Can You Refinance Sallie Mae Loans for 2025?

Student Finance & Loan Expert

In 2023, Americans owed $125 billion in private student loans (Hanson, 2024). While the figure is only 7.2% of the total student loan debt millions of individuals have, private lenders may offer terms and conditions different from federal student loans. Thus, many turn to refinancing their loans, including Sallie Mae loans. To help you make the right financial decision, I, a career-planning expert with over a decade of professional experience, created this in-depth guide on how to refinance Sallie Mae loans.

Key Things You Should Know About Refinancing Sallie Mae Loans

Refinancing student loans involves taking out a new private loan to pay off some or all of your private and federal student loans.
Sallie Mae does not offer refinancing options, so borrowers cannot refinance student loans directly with the education solutions company. Notably, Sallie Mae loans can be refinanced through other private lending firms.
Some private lending companies that can help you refinance Sallie Mae loans include Earnest, SoFi, LendKey, Splash, and Navient.

What does it mean to refinance a loan?
Can you refinance student loans directly with Sallie Mae?
Can you refinance Sallie Mae loans?
What are the best lenders for refinancing Sallie Mae loans?
What are the benefits of refinancing Sallie Mae loans?
What are the risks of refinancing Sallie Mae loans?
How can I refinance Sallie Mae student loans?
What are the eligibility criteria for refinancing Sallie Mae loans?
Will refinancing Sallie Mae loans affect my credit score?
What should borrowers consider when comparing refinancing offers?
What are the costs of refinancing Sallie Mae loans?
Can additional education boost refinancing eligibility?
How does refinancing affect the repayment term of Sallie Mae loans?
Strategies for Enhancing Approval Chances When Refinancing Sallie Mae Loans
Does refinancing Sallie Mae loans free up additional funds for living expenses?
How does refinancing Sallie Mae Loans impact borrowers over time?
What are the tax considerations when refinancing Sallie Mae loans?
How do current market conditions affect refinancing terms for Sallie Mae loans?
Will refinancing Sallie Mae loans affect my future eligibility for further education financing?
Should I Explore Alternatives to Refinancing Sallie Mae Loans?
How Do I Calculate the Break-Even Point for Refinancing Sallie Mae Loans?
Other Things You Should Know about Refinancing Sallie Mae Loans

What does it mean to refinance a loan?

When you refinance student loans, you take out a new private loan to pay off some or all of your private and federal student loans. Refinancing can help you simplify loan management by boiling your current qualified loans down to a single payment, possibly at a lower interest rate or with better terms and conditions. Notably, the federal government does not offer refinancing programs for federal and private student loans, but borrowers can consolidate federal student loans into a Federal Direct Consolidation Loan. Moreover, federal student loans that are refinanced lose their benefits and repayment options, including loan forgiveness programs and income-driven repayment plans.

Can you refinance student loans directly with Sallie Mae?

Education solutions company Sallie Mae mainly provides private student loans and savings accounts. However, the company does not offer refinancing options, so borrowers cannot refinance student loans directly with Sallie Mae. Notably, Sallie Mae loans can be refinanced through other private lending firms. This includes Navient, an American loan management company created in 2014 when Sallie Mae was split into two separate companies.

In 2020, Sallie Mae student loans accounted for 18% of the private student loan market across the United States (US). Navient also had an 18% share. Meanwhile, Wells Fargo and Citizens each accounted for 8% (Student Borrower Protection Center, 2020).

The chart below provides a visualization of private student loan market shares by company in 2020, according to a report about private student lending by the Student Borrower Protection Center.

Can you refinance Sallie Mae loans?

Fortunately, you can refinance your private student loans from Sallie Mae through other private lenders. With the median amount of education debt in the US ranging from $20,000 to $24,999 in 2022 based on student loans statistics (Federal Reserve System, 2023), refinancing options have been of significant help to borrowers who had agreed to student loans with high interest rates. It is important to note that Sallie Mae does not allow refinancing or consolidating its student loan products or loans from the federal government and other private lending companies. Sallie Mae loans that you may refinance through other companies include the following:

Undergraduate student loans
Career training student loans
Graduate student loans
Bar study loans
MBA loans
Medical school loans
Dental school loans

What are the best lenders for refinancing Sallie Mae loans?

Borrowers can choose from several lending companies where they can refinance Sallie Mae loans. During my research for this guide, I found the following to be some of the leading firms with refinancing options:

1. Earnest

Established in 2013, California-based financial technology and banking firm Earnest offers private student loans and student debt refinancing. The company enables you to merge your private and federal loans, choose a payment amount to send biweekly or monthly, and modify your payment date.

Fixed Interest Rates: Start at 4.99% APR

Variable Interest Rates: Start at 5.89% APR

2. SoFi

SoFi, or Social Finance, Inc., was established in 2011 by business students from Stanford. The company launched its student loan refinancing product in 2012, which is considered to be the first time refinancing was introduced to borrowers. To date, more than 450,000 borrowers have refinanced their student loans with SoFi.

Fixed Interest Rates: 5.24% to 9.99% APR

Variable Interest Rates: 6.24% to 9.99% APR

3. LendKey

LendKey is a financial technology company that was established in 2007. The firm caters to borrowers and lenders and offers services to credit unions, community banks, and individuals. LendKey has a loan trading marketplace called ALIRO, which is used by financial institutions to sell or buy loans. Moreover, one of LendKey’s main products is student loan refinancing. Its refinancing option enables borrowers to choose from multiple repayment terms at no additional cost.

Fixed Interest Rates: Start at 5.24% APR

Variable Interest Rates: Start at 5.54% APR

4. Splash

Founded in 2013 in Cleveland, Ohio, Splash Financial is a marketplace for banks and credit unions that offer student loan refinancing. Since then, the company has handled more than 100,000 with more than $6 billion of student loans applied for refinancing. Application requirements include a low debt-to-income ratio, a record of on-time payments, and good credit.

Fixed Interest Rates: 4.99% to 9.99% APR

Variable Interest Rates: 5.28% to 9.99% APR

5. Navient

Navient is an education financing and business processing solutions company that was part of Sallie Mae before 2014. Since separating from Sallie Mae, Navient has established its headquarters in Wilmington, Delaware. In 2017, the company acquired Earnest, and 2 years later, it launched private student loan products.

Fixed Interest Rates: 4.99% to 9.74% APR

Variable Interest Rates: 5.89% to 9.74% APR

The chart below provides a visualization of the starting fixed interest rates for student loan refinancing, according to the official websites of the featured private lending companies.

What are the benefits of refinancing Sallie Mae loans?

If you decide to refinance Sallie Mae loans, you can get several significant benefits. I have found that the following are essential advantages:

Lower Interest Rates. One of the main benefits when you refinance Sallie Mae loans is the potential to secure a lower interest rate. By replacing your existing Sallie Mae loan with a new loan from another private lender at a reduced rate, you can save money over the life of the loan. Lower interest rates mean reduced monthly payments and overall interest costs.
Simplified Loan Management. Refinancing can technically combine some or all of your current multiple loans into a single loan payment. Your new private lending company pays off your current loans, and you repay the new company through a new private loan. Managing one loan with one monthly payment is easier and reduces the risk of missing a payment. Thus, when you refinance Sallie Mae loans, you may be able to simplify your loan management process and more easily keep track of your debt and payments.
Flexible Repayment Terms. Refinancing enables you to change repayment terms to options that suit your financial situation better. You can choose a shorter term to pay off the loan faster and save on interest or a longer term to reduce monthly payments and help you maintain a more comfortable monthly budget.

What are the risks of refinancing Sallie Mae loans?

Many who learn how to save for college late come to understand financial decisions that may improve their financial standing after college. These include refinancing private student loans. While deciding to refinance Sallie Mae loans can be beneficial, it can also be risky. I have found the following main risks that you need to consider:

Loss of Federal Protections. Many borrowers might have a mix of private and federal student loans. Refinancing federal loans into a private loan with another lender, such as Sallie Mae loans, means losing access to federal protections. These include income-driven repayment plans, deferment, forbearance, and potential loan forgiveness programs.
Potential for Higher Costs. In 2023, Americans owed $125 billion in private student loans (Hanson, 2024), demonstrating the financial burden of undergraduate and graduate education, such as bachelor's degree cost. The figure may have included student loans that had been accepted for refinancing. With this in mind, it is important to understand that refinancing does not always guarantee better rates and terms. If your credit score or financial situation is not stable enough to qualify for the most competitive rates, you might have a higher interest rate than before. Moreover, some lenders charge origination fees and other extra costs.
Extended Repayment Period. While extending the repayment term can lower your monthly payments, you might end up paying more interest over the life of the loan. This means that even if your immediate financial burden is reduced, the total cost of the loan could be significantly higher. You must weigh the short-term benefits against the long-term financial impact before deciding to refinance.

How can I refinance Sallie Mae student loans?

Borrowers can refinance Sallie Mae loans by seeking out private lenders that offer refinancing options.

Research and compare lending companies. The process begins with researching and comparing lenders to find the best interest rates and terms that suit their financial needs.
Submit your application. Once a suitable lender is chosen, borrowers must submit an application to provide detailed financial information, credit history, and documentation of the existing Sallie Mae loans.
Wait for approval. Approval depends on different factors, such as credit score, income, and debt-to-income ratio. If approved, the new lender pays off the Sallie Mae loans. Then, the new company combines the current loans into a new loan with potentially lower interest rates or adjusted repayment terms. This new loan may offer reduced monthly payments or shorter repayment periods.

What are the eligibility criteria for refinancing Sallie Mae loans?

To refinance Sallie Mae loans through other private lending companies, borrowers must meet specific eligibility criteria set by each lender. These criteria generally focus on creditworthiness, income, and employment status. The following main factors are considered by lending companies:

Credit Score. A good to excellent credit score is usually required to qualify for refinancing with favorable terms. Most financial institutions seek a minimum credit score of 650, but higher scores improve the chances of securing lower interest rates.
Income and Employment. Stable and sufficient income is crucial for refinancing approval. Lenders usually require proof of steady employment or a consistent income stream to ensure that borrowers can meet the repayment obligations of the new loan. Some lenders may also consider the debt-to-income (DTI) ratio and prefer a lower DTI to reduce risk.
Loan Amount and Type. Lenders may have minimum and maximum loan amounts that they are willing to refinance. Moreover, while refinancing is usually available for both private and federal student loans, borrowers must ensure that their Sallie Mae loans fall within the lender's refinancing criteria.
Cosigner. Borrowers with bad credit or insufficient income might need a cosigner with strong financial credentials to qualify for refinancing. A cosigner can help secure better terms and lower interest rates. Similarly, individuals can help others pay for their college education through other forms of financial aid, such as 529 plans, helping them reach high 529 contribution limits while taking advantage of tax benefits.

Will refinancing Sallie Mae loans affect my credit score?

When you apply to refinance, private lenders typically perform a hard inquiry, which may temporarily lower your credit score. Maintaining a strong credit history is crucial because lenders review your score as part of their risk assessment. Additionally, consolidating multiple loans could simplify your credit profile and, over time, contribute positively if you meet repayment obligations consistently. Consider the impact of multiple inquiries in a short period and compare how different lenders report refinancing activity to ensure the process aligns with your overall credit strategy, especially if you're exploring options like student loans for career training.

What should borrowers consider when comparing refinancing offers?

When evaluating refinancing offers, borrowers should analyze the annual percentage rate (APR) from each lender, including any hidden fees or prepayment penalties that might affect long-term costs. It is essential to compare both fixed and variable rate options while assessing the overall repayment schedule. Considering lender reputation, customer service responsiveness, and transparency in disclosure practices can also inform a sound decision. In addition, reviewing independent financial resources, such as the top online bachelor degree programs, can offer insights into broader financial management strategies without conflating product comparisons.

What are the costs of refinancing Sallie Mae loans?

Some financial institutions that offer refinancing options do not require additional fees. However, others may come with several costs that student loan borrowers must consider. These borrowers represent 4 in 10 American adults who have pursued higher education by 2023 (Board of Governors of the Federal Reserve System, 2024). The following are three typical expenses associated with refinancing:

Origination Fees. Some private lenders charge an origination fee, a percentage of the total loan amount. This fee covers the cost of processing the new loan and is usually deducted from the loan disbursement.
Prepayment Penalties. Certain lenders may impose prepayment penalties if you pay off your existing loan ahead of schedule. This fee compensates the lender for the interest they would have earned had you continued with the original repayment schedule.
Application Fees. While less common, some lenders may charge a fee to apply for refinancing. This fee is generally non-refundable and covers the cost of reviewing and processing your application.

Can additional education boost refinancing eligibility?

When evaluating refinancing options, borrowers may benefit from demonstrating ongoing professional development. Enhanced credentials can contribute to a stronger fiscal profile and improved income stability, factors that lenders often prioritize during the approval process. Engaging in targeted training—such as completing short certificate programs—can signal commitment to career growth and increase future earning potential. These advantages may ultimately support a more favorable refinancing outcome.

How does refinancing affect the repayment term of Sallie Mae loans?

Refinancing Sallie Mae student loans can significantly impact the repayment term, offering both short-term relief and long-term financial implications. When borrowers refinance, they decide on different repayment terms for their new loan. A repayment term that is longer than the average student loan repayment period can lower monthly payments, give you immediate financial relief, and make budgeting easier.

However, similar to the rising cost of college over time, extending your repayment period can increase the interest you pay over the life of the loan, increasing the total cost. On the contrary, choosing a shorter repayment term can lead to higher monthly payments but reduces the total interest paid.

Borrowers who refinance can also switch from a variable interest rate to a fixed interest rate. A fixed interest rate can stabilize payments and make financial planning more predictable. Moreover, borrowers might gain access to more flexible repayment options, including customized plans.

Strategies for Enhancing Approval Chances When Refinancing Sallie Mae Loans

To improve your chances of successfully refinancing Sallie Mae loans, it is critical to approach the process strategically. Begin by assessing your credit score, as most private refinancing lenders require a solid credit history. If your credit score is lower than desired, consider improving it first by paying down outstanding debts and demonstrating consistent on-time payments over several billing cycles.

Another key factor is demonstrating financial stability. Lenders often look for steady income or job security as part of their eligibility criteria. If you have recently changed jobs or are self-employed, provide detailed documentation, such as tax returns or a letter of employment verification, to reassure lenders of your financial capacity.

Debt-to-income (DTI) ratio also plays a crucial role. A lower DTI ratio signifies a stronger ability to repay loans, making you more competitive in the lender's eyes. To reduce this ratio, focus on paying off smaller debts or consolidating credit card bills. You can even consider refinancing as a strategy to better align your finances if you have other high-interest obligations.

For specific borrowers, such as nurses or medical professionals, industry-specific lending programs could provide tailored solutions. For instance, those evaluating options for nursing student loans should explore targeted programs that cater to their field, ensuring lower interest rates or flexible repayment plans.

Finally, seeking co-signers with strong credit profiles can also enhance approval odds. However, keep in mind that co-signers share financial responsibility for the loan, so this arrangement should be carefully considered.

By proactively addressing these areas, borrowers can strengthen their financial profile and improve their refinancing approval chances.

Does refinancing Sallie Mae loans free up additional funds for living expenses?

Refinancing may lower monthly payments, potentially releasing extra cash flow that borrowers can allocate toward essential living costs. Analyzing the balance between reduced payment obligations and overall long‐term interest is critical to ensure that refinancing enhances financial flexibility without increasing total debt expense. This evaluation should involve a detailed comparison of repayment schedules and fee structures to determine if the cash flow improvement justifies the refinancing decision. For further insight on how educational financing can accommodate everyday living costs, please review our guide Do medical school loans cover living expenses?

How does refinancing Sallie Mae Loans impact borrowers over time?

When evaluating whether to refinance a Sallie Mae loan, it’s critical to consider how the choice impacts your financial trajectory over time. One of the most significant long-term effects of refinancing lies in the balance between reduced monthly payments and the total amount paid over the life of the loan. Borrowers opting for longer repayment terms may experience immediate financial relief but often pay more in total interest, similar to patterns observed with other forms of extended borrowing.

Refinancing can also influence financial flexibility. Switching from a variable to a fixed interest rate stabilizes payment amounts, making financial planning easier in the context of future goals, such as saving for retirement or purchasing a home. This predictability can be especially beneficial in uncertain economic environments.

Another often-overlooked aspect is how refinancing aligns with personal financial priorities. For example, some borrowers use refinancing as a way to consolidate their loans, simplifying management and reducing stress from juggling multiple payments. However, it’s crucial to calculate all costs associated with refinancing, including potential origination fees or prepayment penalties, to ensure that the benefits truly outweigh the expenses.

Finally, refinancing impacts eligibility for certain benefits tied to federal student loans, such as income-driven repayment plans and federal loan forgiveness programs. Borrowers should carefully assess whether the trade-off between reduced interest rates and lost benefits aligns with their long-term financial strategy.

Now, can you take out a student loan for living expenses? If you’re planning on utilizing student loans for purposes beyond tuition, such as living expenses, bear in mind that federal and private loans vary widely in their terms. Check out online resources and explore what factors to consider in determining your borrowing needs.

By weighing all these factors thoughtfully, borrowers can make a more informed decision that supports their financial health both now and in the future.

What are the tax considerations when refinancing Sallie Mae loans?

Refinancing Sallie Mae loans can modify the tax landscape by impacting the eligibility of student loan interest deductions and other related credits. Borrowers should verify whether the terms of a refinanced loan continue to meet IRS requirements for interest deduction, as changes in loan structure could affect tax benefits. It is prudent to consult an accounting professional to ensure that refinancing aligns with current tax laws and long-term financial strategies. Additionally, integrating further educational investments—such as the best graduate certificate programs online—might optimize both career progression and tax planning.

How do current market conditions affect refinancing terms for Sallie Mae loans?

Economic factors such as fluctuating interest rates, lender competition, and broader market volatility directly impact the refinancing options available for Sallie Mae loans. Lenders may adjust their criteria and pricing depending on changes in inflation, credit market conditions, and the overall economic climate. Monitoring these trends can enable borrowers to strategically time their applications to secure more favorable terms. Additionally, aligning refinancing decisions with broader financial development—such as pursuing an affordable masters degree—may further enhance eligibility by bolstering income potential and financial stability.

Will refinancing Sallie Mae loans affect my future eligibility for further education financing?

Refinancing your Sallie Mae loans can alter your credit profile and debt-to-income ratio, both of which are key factors lenders assess when you apply for additional education financing. Lenders may evaluate your updated repayment commitments before approving new loans, so it's crucial to ensure that the terms established during refinancing support your broader financial objectives. Careful review of your refinancing agreement can help determine whether your consolidated payments and altered credit dynamics might influence future borrowing opportunities for further academic pursuits, such as reading our guide on dental school student loans.

Should I Explore Alternatives to Refinancing Sallie Mae Loans?

Borrowers may benefit from evaluating alternative debt management strategies alongside refinancing to ensure optimal financial outcomes. Options such as consolidating federal loans—which maintain existing benefits—restructuring repayment plans, or opting for income-driven arrangements can sometimes offer a more balanced approach to managing long-term debt. Assessing these alternatives with the support of professional financial advice can provide tailored guidance that aligns with both immediate cash flow needs and future financial goals. Furthermore, exploring educational investment opportunities, like enrolling at the best online colleges that accept FAFSA, might contribute additional perspectives to your overall strategy.

How Do I Calculate the Break-Even Point for Refinancing Sallie Mae Loans?

Determining the break‐even point allows you to assess when the initial costs of refinancing are offset by your monthly savings. Identify all upfront fees, such as application and processing costs, and compare them with the reduction in monthly payments achieved through refinancing. Divide the total refinancing fees by your monthly savings to estimate the number of months required to recoup the costs. This calculation is crucial in determining if long‐term interest savings justify the refinancing decision. It also supports strategic financial planning by ensuring that the anticipated benefits align with your overall repayment and career growth objectives, including evaluating options like what associate degree pays the most.

Key Findings

In 2020, Sallie Mae student loans accounted for 18% of the private student loan market across the United States.
The median amount of education debt in the US ranges from $20,000 to $24,999 in 2022.
In 2023, Americans owed $125 billion in private student loans.
Most financial institutions seek a minimum credit score of 650.
4 in 10 adults in the US took out a long to pursue higher education.

Other Things You Should Know about Refinancing Sallie Mae Loans

Can I lower my Sallie Mae loan?

You can lower your Sallie Mae loan by refinancing it through another private lender. Refinancing may offer lower interest rates or better terms. However, Sallie Mae itself does not offer loan refinancing, so you will need to explore options with other lenders to achieve this.

Will Sallie Mae loans ever be forgiven?

Since Sallie Mae loans are private loans, they are not eligible for federal loan forgiveness programs. Borrowers seeking loan forgiveness should explore specific state or employer-based repayment assistance programs that may occasionally offer relief for private loans.

Can I transfer a Sallie Mae loan?

You cannot transfer a Sallie Mae loan to another person, as they remain the responsibility of the original borrower. However, you can refinance your Sallie Mae loan with another private lender to potentially secure better terms or lower interest rates.

References