Sallie Mae Unveils New Private Consolidation Loan

Sallie Mae, the nation’s leading provider of education funding, today introduced a new Private Consolidation Loan, which allows holders of private education loans — either from Sallie Mae or another lender — to manage repayment by combining their eligible loans into a new loan with a single monthly payment, a potentially lower monthly payment amount and an extended repayment term. The addition of the Private Consolidation Loan product brings another debt management tool to Sallie Mae’s portfolio of repayment options. The company is the nation’s largest consolidator of federal education loans, with more than $19 billion consolidated in the last federal fiscal year.

“We are committed to providing comprehensive repayment and debt management solutions to our customers who want to simplify the repayment process and make loan payments more manageable,” said Paul Garrard, director of private credit consolidation, Sallie Mae. “We are pleased to provide our customers with another option that may help them better manage the investment in their education. Our user-friendly Web site and dedicated Call Center staff provide customers a great way to determine if private loan consolidation is right for them.”

Private education loans are credit-based education loans that provide financing to students who need funds beyond the federal loan program. Private education loans are an important and growing choice for millions of undergraduate, graduate and health profession students, as the amount students can currently borrow under the federal student loan program is often not enough to cover the gap between financial aid awarded and the actual cost of college.

With Sallie Mae’s Private Consolidation Loan, customers may extend their repayment term to up to 30 years, depending on the loan amount. Interest rates on Sallie Mae’s Private Consolidation Loan are variable, based on the customer’s credit history. Customers with very little or no credit history are eligible to apply with a creditworthy cosigner. Sallie Mae’s Private Consolidation Loan offers interest rates as low as Prime Rate plus 0 percent. More information and application information is available online at www.SallieMae.com/PrivateConsolidation or toll-free at 866/380-5005.

Under current law, federal consolidation loans carry a fixed interest rate equal to the weighted average of the rates of the loans consolidated, adjusted upward to the nearest 0.125 percent. With interest rates on the underlying, variable-rate, federal student loans at or near 40-year lows, millions of federal student loan customers have benefited by consolidating their loans and fixing the low rate for the loan’s life. Experts predict that interest rates on existing, variable-rate federal student loans will rise as much as 2 percentage points when they reset this July 1. Federal student loan customers who apply for consolidation before July 1 can potentially lock in an interest rate as low as 4.75 percent for the duration of the loan’s term and qualify for rate reductions during repayment. More information on federal loan consolidation is available at http://www.SMARTLoan.com, or toll-free at 800/448-3533.