Besides the rate, what should you compare when refinancing a private student loan?

Summary

Compare what your current loan agreement gives you that a new one might not: a path to release your cosigner, a balance that can be waived if you die or become disabled, and a hardship option if you fall behind. The rate and term decide the total interest, and this site's calculator and lender list cover that part. If the loan you want to replace is from Sallie Mae, the new loan has to come from someone else, because Sallie Mae says it does not offer refinancing.

Can a Sallie Mae loan be refinanced?

Yes, by another lender. On its page about consolidating and refinancing, Sallie Mae says it does not offer consolidation or refinancing at this time. The same page lists questions to ask first, among them whether you would lose discounts you have with the original lender, and whether the new loan would count as a student loan or a personal loan, since a personal loan could cost you the interest tax benefit.

A refinance lender that accepts Sallie Mae loans pays yours off, the same way it would pay off any other lender's loan. The approval criteria are in the article on refinance approval.

Three things the new contract may drop

Using Sallie Mae as the loan being replaced:

Cosigner release. Sallie Mae lets the borrower apply to release a cosigner after 12 on-time principal and interest payments on the loan, or after paying ahead. There are other conditions: no payment 30 days late and no hardship forbearance in the past 12 months, proof of graduation and income, and a credit review. A refinance loan may have a release option on different terms. Citizens, for example, lets borrowers apply once they are in full principal and interest repayment, with income documents, and no more than once every 12 months.
Death or disability. Sallie Mae says the remaining balance may be waived if the student dies or becomes permanently and totally disabled and unable to work. ELFI's refinance pages, for comparison, say nothing on this and refer borrowers to the application and loan agreement.
Hardship. For borrowers who are behind, Sallie Mae lists a Loan Modification that lowers the rate and may extend the term, and a Reduced Payment Plan of six months of interest-only payments. ELFI says it may grant forbearance for up to 12 months for financial hardship or medical difficulty, at its discretion.

Private loan hardship options get their own article.

A gap in the 2018 cosigner law

Since a 2018 amendment, 15 U.S.C. 1650(g) requires the holder of a private education loan to release any cosigner once it is notified that the student borrower has died. The statute's definition of cosigner, though, leaves out obligations on a private education loan "extended to consolidate a consumer's pre-existing private education loans." A refinance that rolls several private loans into one, with a cosigner on it, sits outside that definition. The cosigner article explains the rest of that law.

Rate, term and payment

The CFPB notes that private consolidation loans may carry variable rates, that the rate you get depends on your credit score, and that terms run from 10 to 25 years depending on the lender and the amount. On this site, the article on variable ranges and caps and the article on what the advertised rate leaves out work through those two choices, and the calculator shows the total interest at each lender's published ceiling.

Federal loans change the comparison entirely; the article on refinancing federal loans covers that case.

Sources

Written by Kaz (pen name). Figures are copied from the sources' published pages on the dates shown. We have not used these products. Corrections: contact form.