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Electing to make monthly payments while in school can reduce total loan costs and, for Sallie Mae Smart Option Student Loan customers, it can also mean lower interest rates.
Sallie Mae, Newark, announced that undergraduates who choose to make monthly interest-only payments while in school will receive an interest rate one percentage point lower than those who choose to defer payments.
In addition, undergraduates who choose an in-school fixed payment will receive an interest rate 0.5 percentage point lower than those who defer payments.
When factoring in the lower interest rate, a typical freshman customer who makes monthly interest-only payments on a Smart Option Student Loan while in school saves an average of 25 percent on total loan costs, compared to students who defer payments until after school.
A typical freshman customer who makes monthly fixed payments while in school saves roughly 12 percent on total loan costs compared to those who defer payments until after school. Customers can also reduce their interest rate by an additional 0.25 percentage points by enrolling to make payments using automatic debit.
“Our Smart Option student loan can be a responsible way to bridge any gap in college financing and we go further by rewarding customers who are taking steps to reduce overall debt,” said Kelly Christiano, senior vice president, Sallie Mae. “We consistently promote borrowing responsibly, and it’s especially encouraging to see so many of our customers doing just that and saving money along the way.”
The Sallie Mae Smart Option Student loan offers a choice of fixed and variable interest rates, plus a choice of three repayment options: monthly interest-only payments while in school; a fixed monthly payment while in school; or payments deferred until after school. More than half of Sallie Mae private student loan customers choose to make in-school payments.
Available to students attending degree-granting institutions, Sallie Mae’s Smart Option Student Loan offers competitive fixed and variable interest rates and no origination fees or prepayment penalties.
Sallie Mae recommends students and families follow its 1-2-3 approach to paying for college: first, maximize money that does not need to be repaid, such as scholarships and grants; second, explore federal student loans; and, third, consider a responsible private student loan.
For more information on Sallie Mae’s Smart Option Student Loan, or to apply, visit SallieMae.com/smartoption.
