Sallie Mae’s private student loan is a popular choice for many students. It’s known as the Smart Option Student Loan for undergraduates and career training students, and simply as the Sallie Mae student loan for graduate and professional studies. These loans offer flexible repayment terms and theoretically unlimited borrowing capacity, unlike federal student loans. However, they do have some downsides, such as potential cost uncertainty with variable-rate loans and some limitations for career training loan borrowers. So, before you apply, make sure you understand the rates, terms, and potential downsides of your chosen loan.
Sallie Mae offers three types of student loans, each with slightly different features. All of them have no origination fees and can help students and graduates build credit. They’re available to U.S. citizens and permanent residents, as well as eligible non-U.S. citizens with a citizen or permanent resident co-signer. You can apply for co-signer release after making 12 on-time principal and interest payments following graduation.
Sallie Mae also offers separate loans for parents to finance higher education expenses and K-12 private school education. These loans aren’t issued in students’ names and don’t build credit for the students they’re financing.
The Smart Option Student Loan is for undergraduate students at degree-granting institutions. It allows you to borrow the full amount of your attendance costs, including both direct and indirect expenses. However, if you receive any additional financial aid, Sallie Mae will subtract that amount from your loan. The loan comes with a repayment term of anywhere from five to 15 years, which you choose at the time of your loan’s disbursement. You can’t change this term unless you refinance your loan. There are no origination fees or prepayment penalties.
Sallie Mae also offers a private student loan for graduate and professional students. This loan is touted as a superior alternative to the popular PLUS loan for graduates, primarily because it sometimes comes with a better rate and more flexible repayment terms. The minimum disbursement amount is also $1,000, and the maximum is the full school-certified cost of attendance.
The Career Training Smart Option Student Loan is for students who attend vocational, certificate, or career-training programs. This loan allows you to borrow up to 100% of your total attendance costs, provided you require at least $1,000 in assistance. However, you can only repay it using the interest repayment or fixed repayment options.
While Sallie Mae’s private student loans are flexible and reasonably priced, they do have some downsides. The career training loan has higher interest rates, and for long-term savings, you need to pay more upfront. Variable interest rates can create uncertainty for borrowers, and there’s no deferred repayment option for the career training loan. Despite these drawbacks, Sallie Mae’s student loans remain a popular choice for many students.
