How to Refinance Your Sallie Mae Student Loan to a Lower Interest Rate

Jen Williamson Updated on May 1, 2018

Thinking about refinancing your Sallie Mae student loan to get a lower interest rate? You can't refinance a Sallie Mae loan through Sallie Mae--but there are lots of other lenders who will let you refinance. And it's a smart move--one that could save you a ton of cash. Here's what you need to know.


Should you refinance your private student loan?

First, let's talk about how student loan refinancing works.

When you refinance, you take out an entirely new loan to pay off your existing student loans. If you have a good credit score, you may qualify for a better interest rate. 

Even a small interest rate reduction can shave years off your loan payments and save you money over the life of loan. In fact, the average borrower who refinances is able to save over $16,000 over the life of their loan.

You can also lower your monthly payments by extending the term of your loan. Many people are able to reduce their payment amounts by over $250 a month. Bear in mind, though, that this may result in paying more interest over time.

If you still have questions about refinancing, you might want to consider taking this 7-question quiz: Is Student Loan Refinancing Right for You?

Once you've decided that refinancing is a go, the next step is to tackle the application process. 

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How to refinance your student loan

1. Check your credit score

The application process for refinancing is fairly simple, but before you get started, you might want to check your credit score.

Lenders have specific criteria you must meet in order to qualify for refinancing. Most want you to have a good credit score (680 or higher), but they may also look at your employment situation and debt-to-income ratio. 

The interest rate on your new private student loan will be based on your credit score. So, if it's not as high as you'd like, take some time to boost it up. 

2. Decide how you want to save

Plenty of lenders will refinance your student loans for you, but not all created equal.

It's important to pick a reputable lender that will not charge you any fees to refinance your loan.

It's also smart to select lenders that will offer payments terms that fit your unique situation. For example, maybe you want to pay off your loan fast, so having a low, variable-rate loan with a five-year payment term would be a good option. Or, perhaps you want to increase your monthly cash flow by having a 15- or 20-year payoff. 

Use our handy calculator to view offers from several different lenders at once. 

See also: The Best Companies for Refinancing and Consolidating Student Loans in 2018

3. Apply

Gather all of the materials you'll need to complete the online application. This process shouldn't take more than 15-30 minutes if you have all your documents in order. 

Make sure you have:

  • The most recent statement for each loan you want to refinance. It needs to show the loan amount—both original and current— as well as the interest rate, servicer name and address, and payoff date.
  • A driver's license, passport, or bank statement that can be used to verify your address.
  • Your last month's pay stub.
  • Your most recent tax return.
  • Proof of graduation.

You can expect a conditional loan approval within minutes. In some cases, the lender may ask you for additional documentation. It usually takes about about three to four weeks for your new lender to pay off your old loans and request the first payment.

Even though this seems quick, it's important that you continue to pay on your old loan until you receive an invoice from your new lender. 

See also: Everything You Need to Know About Student Loan Refinancing

3 awesome deals you might want to consider

Thinking seriously about refinancing your student loan, but not sure which lender to choose? We’ve started the research for you. 

These three lenders offer under-the-radar deals that most student borrowers don’t know about—but they should. They don’t charge extraneous fees, they have great customer service, and they offer some of the lowest rates in the industry.

Here’s an overview.


LendKey connects borrowers with a network of over 13,000 credit unions and small community banks nationwide. These lenders offer some of the best rates and most borrower-friendly terms, but aren’t easy to find if you’re not in their community. 

LendKey will match you to lenders based on your financial situation, and will service your loan once you refinance. This network offers some of the lowest interest rates we’ve found, starting at 2.47% for a variable-rate loan.


CommonBond stands out for its unique social promise. For every loan it refinances, it commits to putting one child in a developing country through school. To date, CommonBond has donated over $1 million to children’s education, and paid for the construction of over 470 schools.

CommonBond also offers the Hybrid Loan—a type of loan that combines the best parts of fixed and variable-rate loans.

Fixed-rate interest doesn’t change over the life of the loan, while variable-rate loans have an interest rate that fluctuates. Usually, you can score a lower initial rate by choosing a variable-rate loan—but it may go up over time.

The Hybrid Loan is a 10-year loan that’s fixed for the first five years, and then variable for the next five. You get some of the stability of the fixed-rate loan, with the lower interest of a variable-rate loan.


Instead of sorting its borrowers by credit history and income, Earnest looks at each person’s unique financial history—in order to give each borrower the best possible interest rate.

Unlike many other lenders, Earnest does not have a minimum income requirement to qualify for refinancing. They’ll take a look at factors other lenders don’t, including your career trajectory, pattern of savings, and investment history.

They’ll let you set your own monthly payment based on your budget—and will tailor the length of your loan to make it happen. Their rates start at 2.47% for variable-rate loans.

You can also switch between fixed and variable rates—another unique feature most lenders don’t offer.

Are you ready to refinance your private student loan? Check out our Student Loan Refinancing Calculator to see how much money you could save. 

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Published in: Refinance

About the Author
Jen Williamson

Jen Williamson is a freelance writer living in Brooklyn. She has written for a variety of industries, including software, education, business, and personal finance. Prior to that, she worked at an adult literacy nonprofit in Philadelphia, where she coached nontraditional students in passing the GED test and applying for college. When she isn’t writing or reading—which is rare—she can usually be found planning her next travel adventure, training for a marathon, or sneaking in somewhere she’s not supposed to be. Read more by Jen Williamson

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LendKey operates student loan programs for over 275 not-for-profit and community lenders across the country. By partnering with these lenders, LendKey is able to give consumers direct access to the best rates available from the most borrower friendly institutions. As the servicer of all loans obtained through its platform, you can rest easy knowing your personal information will be safe and that the best customer service team will be ready to answer your questions from application until your final payment.

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SoFi, which stands for “Social Finance,” was created by a group of Stanford business students who found themselves with a mountain of debt after graduation. They set out to change the student loan industry and help borrowers like themselves to get lower interest rates. SoFi has some of the lowest interest rates and, unlike the other lenders we reviewed, it has no maximum amount you can finance. However, Nevada residents can’t currently refinance with SoFi. Minimum loan balances are higher in Arizona, Massachusetts and Pennsylvania due to state laws. Additional state restrictions may apply.

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Find out what interest rate SoFi can offer you here.

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CommonBond was founded in 2011 by three MBA graduates from the University of Pennsylvania’s Wharton School who wanted to help their peers escape from high-interest student loan debt. Its original focus was on grad students, but it has since expanded to cover undergrads as well.

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Get a personalized review of your refinancing options with CommonBond today.

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Laurel Road is a national online lender with customers in all 50 states, the District of Columbia, and Puerto Rico. Many of our non-bank competitors are not able to lend in all 50 states.Laurel Road has grown to be the second largest player in the student loan refinancing space in large part because of our reputation as the go-to low rate provider.

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