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When it comes to paying for college one of the more popular options has been the Sallie Mae student loan. Sallie Mae offers a number of student loans that you can apply and qualify for, all of which can help you achieve your academic goals by giving you the funding you need to finish your college experience. After you are approved for a Sallie Mae student loan you will be given access to their borrower services which includes the option to manage your loan online.

Types of Loans Available

Sallie Mae offers a variety of federal and alternative loans. It is best to consider the federal loans first since they have the best terms, interest rates and payback policies. The two main federal loans are the Federal Stafford Loan and the Federal Perkins Loan. Sallie Mae also offers private loans if you don’t meet the requirements for the federal loans or if they don’t cover the cost of your college tuition. These are called alternative student loans since they are personal and generally not subsidized.

Do You Qualify?

So how do you know if you can qualify for a Sallie Mae student loan? The answer isn’t always simple and clear, especially when it comes to financial matters. Rather the answer to the question depends on which Sallie Mae student loan you are applying for. There are certain minimum requirements if you are applying for a federal loan such as GPA requirements, a certain income bracket, U.S. citizenship and no prior student loan default.

Although if you are going for a private Sallie Mae student loan then your credit score will be more important than your college standing or level. This is very hard for some students since many college students have little to no credit history. This is why Sallie Mae offers cosigner options for those who want to apply for a bad credit personal signature loan. This allows people to get a lower interest rate and start their credit history off right.

Not For Everyone

However, there are always areas of caution when it comes to financial matters. Always make sure you don’t borrow more money than you need for your college costs. If you do this you will have unnecessary debt that increases your chance of buying other things that aren’t a part of your college costs. Also make sure your Sallie Mae student loan isn’t your only method of paying your college tuition. By looking into grant and scholarship options you can decrease the amount of money you need to borrow.

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If you fall behind in your student loan payments and end up in student loan default, there are a lot of tools the Department of Education can use to get their money back. If you have a federal loan then student loan default can cost you even more than the amount you originally borrowed. By defaulting on your loan you can be charged high fees by loan guaranty agencies and you may get charged for the commission fees that the Department of Education pays to collection agencies.

If you are in student loan default then the IRS can legally intercept your entire income tax refund until all your loans are paid in full. When it comes to student loan default this is the most common method the U.S. Department of Education uses to collect. The IRS will be notified of your student loan default if you haven’t made a payment within 90 days. In order to object their claims you have 65 days from the time you receive your student loan default notice to show written evidence that you have repaid the loan, are making payments under a negotiated plan, that you have filed for bankruptcy, that you are disabled, that it isn’t your loan, that you dropped out of school or for any other reason that the loan isn’t legally enforceable.

What You Can Do About It

Even if you have had a student loan default you can still have some options open to you. If you choose the right course you can even regain your eligibility for financial aid, improve your credit rating and even get the student loan default status removed from your record. So what steps can you take?

The first and best option is loan rehabilitation. This is the only option that allows you to restore your credit rating and your eligibility for further financial aid. To qualify for this option you will have to make satisfactory repayment arrangements which usually means nine consecutive, full payments in about twenty days of their due date. The payment need to be made voluntarily by you and they can’t come from legal proceedings, wage garnishment or a lump sum repayment made for the purpose of future installments.

If you make arrangements for a one time satisfactory repayment of a defaulted loan then you can restore your eligibility for financial aid. In order for this to happen you will need to make six consecutive, acceptable monthly payments within fifteen days of their due date. The acceptable payments are typically fifty or the accrued interest rate.

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Nearly every college student knows the importance of consolidating a student loan after graduation because of the impact it has on student loan interest rates. However, not all students know that you can reduce student loan interest rates right now while still in school. This can be done by taking advantage of lender incentives.

When you are choosing a student loan it is important to compare student loan interest rates as well as the incentive programs offered by the lender. By comparing incentive programs you can save thousands of dollars beyond consolidation savings on student loan interest rates.

Incentive Options

Some lenders have the option of on time payments and student loan interest rates deduction. These incentive programs reward the borrowers by giving a lower interest rate for just making your payment on time as scheduled. A common incentive you will find is a reduction of up to one percent on student loan interest rates for each 36 months of consistent on time payments made by the borrower. Although the percentage and length of time will vary by lender so it is important that you comparison shop by incentive program when looking for student loans.

Another incentive you may find lenders offering is auto pay interest rate reduction. With these incentives you get a discount on student loan interest rates simply for choosing to have your payments automatically deducted from your account through electronic transfer. For these incentive programs the student loan interest rates can be reduced up to .25%.

Consolidating To Save More

No matter what incentive programs you use through your lender, consolidating is still a good way that you can save money on student loan interest rates. In addition to cutting your interest rate greatly, consolidating can also give you the convenience of writing just one check. Consolidation also gives you the benefit of lowering your monthly payment by stretching the term of a new loan. Just keep in mind that consolidating does mean you will pay out more in student loan interest rates over time.

Finding a way to reduce student loan interest rates can have a great impact on the total amount you repay. Just reducing your loan interest rate by 1.5% on a thirty thousand dollar loan can save you over two thousand. In addition, with competition increasing in the student loan market, the incentive programs keep getting better. So consider how you can lower your interest rates and save a lot of money.

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