Getting a Lower Interest Rate with Navient

Michael Lux How to Guides, Lower Payments, Student Loan Blog, Student Loans 25 Comments

The shift of massive amounts of student loans from Sallie Mae to Navient has been a headache for many borrowers.  However, to the credit of Sallie Mae/Navient, one of the great programs created at Sallie Mae remains alive and well with Navient.

The program is called the “Rate Reduction Program”.  It is designed to give borrowers a break who are struggling with their private student loans.  The exciting part of this program is that it applies to private student loans.  While there are great federal programs for lowering payments and student loan forgiveness, the Rate Reduction Program was among the very first of its kind in the private sector.

Borrowers who sign up for the Rate Reduction Program can get their interest rates lowered down to 3% or lower depending on individual circumstances.  For those with double-digit interest rates, it is a huge savings!

The major downside with the Rate Reduction Program is that Navient doesn’t want to make it too easy to sign up for or too popular.  When people sign up, Navient makes less money on interest.  The program is good for them, because it keeps people paying, and some money is better than none.  However, Navient clearly has motivation to keep this program as a last resort for borrowers.

If you want to get signed up for the rate reduction program, try these steps:

  1. Start out organized – Navient will have a ton of questions about your finances, so have detailed information about your income and all of your monthly expenses.
  2. Talk to someone from the Rate Reduction Program – When call the standard Navient number, they will first direct you to a customer service representative.  This person may not even be aware of the rate reduction program.  Asking to be transferred to the people who administer the Rate Reduction Program directly saves you a bunch of time and increases your odds of success.
  3. Work with the person on the other end of the phone – The interest rate reduction is not a term of your student loan or a legal requirement.  Navient is under no obligation to lower your interest rate.  Being nice instead of demanding will increase your odds of success.
  4. Apply each year – The interest rate reduction only lasts for one year.  If you want to stay on the program, you must reapply each year.  Be sure to set a reminder for yourself so that you don’t forget.

If you are denied…

If you cannot get your interest rate lowered, it is likely because Navient thinks you are making enough money to afford your student loans at your current interest rate.

It obviously sucks if they can lower your high interest loans, but the good news is that you might be able to take your business elsewhere.

If Navient thinks you can afford your debt, other lenders may think the same thing.  By refinancing or consolidating your loans, you can permanently lock in a lower rate.  There are a ton of companies offering student loan consolidation and refinancing.

If you do get a lower interest rate…

If you can get a lower interest rate, through Navient or another company, take advantage of it.

Use the money you save each month and apply it towards your higher interest loans.  The more you can attack the principal balance of your debt, the sooner it will be gone.

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krantcents

Lowered payments are always welcome, however the interest rate must be reduced too. Lending has changed since the crash of 2008, and it is more difficult to make changes.

madmom
madmom

Did you know that if you pay Navient more than your monthly minimum, they do not apply it to reduce principle? They just use it as a future payment so it does not benefit you – they just collect the interest. I want to sue these people, can some one help me. I have paid additional principle for 7 years but none was applied towards reducing my principle. Can you help

D
D
Reply to  madmom

I just call to make my payments, and say that I want it applied to the principle immediately. It’s a tracked call-they apply it as instructed. However it will take a few days to post.

Travis Johnston
Travis Johnston
Reply to  madmom

Just a recent FYI, I just made this month’s payment with their new website and paid more towards certain loans. The following step asked me what I wanted to do with that money, either put towards a future payment or delay a future payment, or put it towards this months payment as extra. There’s no toggle between interest or principal for the extra, but they do now allow you to put it towards the month you are paying on.

Susan
Susan
Reply to  madmom

I feel the same as u do. They want me to pay 250% interest on the principle amt. there should be something that can be done about this. I would welcome any advice.

Leslie Fairman
Reply to  madmom

Call Navient to break up your billing payments and you can may individual loan payments. I do this every month, you just have to ask them to break them up so they don’t draft as one payment but individually. Then the website and app let you make individual principal payments.

Regina
Regina
Reply to  madmom

You will have to call them and let them know that you want the extra payment applied to your principle, especially if the extra payment is equal to or greater than the actual monthly payment. It’s shit, I know. But that’s what I was told when I inquired about it a few years ago.

Leslie Fairman
Reply to  Regina

Call Navient to break up your billing payments and you can may individual loan payments. I do this every month, you just have to ask them to break them up so they don’t draft as one payment but individually. Then the website and app let you make individual principal payments. Then you don’t have to call and deal with the hassle.

Navient Sucks
Navient Sucks

Just called Navient. They told me that the interest rate is not reduced. The payment is lowered for people who are qualified for the rate reduction program but the interest is capitalized on to the loan and after the reduced payment period your payment will be higher than it was before the reduced period. More scamming from Navient. There programs are designed to milk as much money from the borrower as possible.

Melissa Holland
Melissa Holland
Reply to  Navient Sucks

Need to call Navient customer service can someone please give me their phone number. So I can actually talk to someone

navient is a money sucker
navient is a money sucker

Everyone should refinance their stupid Navient (Deviant) loans to SoFi. SoFi has been a godsend and what was a 10% interest rate is now at 5%.

Janelle
Janelle

IF SoFi will let you…they denied me based on the fact that I had too much student loan debt.

JC Nelson
JC Nelson
Reply to  Janelle

Yep same here. Making 88k a year with a 780 credit score, but SOFI denied me for having too much student loans debt.

Al Pearlman
Al Pearlman

I have about a 90,000 dollar PLUS loan with Navient and read about a program this week in the NYTimes that will allow this to be switched to a mortgage loan? Any info about this?

The Student Loan Sherpa
Reply to  Al Pearlman

I’m not familiar with this program or the Times article? Do you have a link?

It sounds kind of risky. If the loan becomes a mortgage loan, not paying it could result in you losing your house.

Heather N
Heather N

If you read the fine print on the billing statement, in order to get your extra payment applied to principle you must include a note asking for the payment to be applied to principle (I also very clearly state which loan it needs to be applied with the loan number). It has to be a separate piece of paper. A check memo does no good.

12JimL12
12JimL12

It seems like a lot of people are dealing with the same issues as me with navient? Is anyone else seeing their interest rates rise with the more they pay off?? I graduated with $65k. Over the passed 7 years have paid $50k and I still owe $85k! Each one of my loans through navient show me $0 due because I pay so much more than they tell me to yet I still owe more than I borrowed and even though they tell me I dont owe any payments but keep paying more and more each month my interest rates keep rising! Since April of 2015 my rates have gone up over 5% to 10.75% with nothing else being added to my credit profile!

The Student Loan Sherpa
Reply to  12JimL12

That sounds really strange. Did you have a bunch of late fees or go on a deferment or forbearance for an extended period of time?

If you are paying extra, your balance should be going down, not up.

The $0 due each month is a common lender trick. They want you to pay the bare minimum so that they can maximize interest income.

As for the interest rates, lots of people have seen their interest rates going up. Though a 5% jump is much higher than most. Depending upon your income and credit score, you could potentially try refinancing with another lender and locking in a lower fixed rate. That being said, this option is only a good idea in certain circumstances… more on that here: https://studentloansherpa.com/student-loan-reviews/

Shiftknob28
Shiftknob28

I am getting nowhere with my student loans. My monthly payment is basically split even (balance/interest) and the interest keeps going up. This is getting out of hand.

The Student Loan Sherpa
Reply to  Shiftknob28

How much have your interest rates gone up?

Shiftknob28
Shiftknob28

Hi – I have 4 loans with Navient, as of this January, each loan has increased .75%, in increments of .25%. It doesn’t sound like much but it increased my monthly payments by $50. I’m currently looking to find a bank to refinance with.

The Student Loan Sherpa
Reply to  Shiftknob28

That definitely makes sense. You should also be able to find a fixed-rate loan so that you don’t have to deal with rate increases in the future.

Johnny Diaz
Johnny Diaz

I called this number but got real uncomfortable fast. Right away they asked for my SSN when i got connected. I’d be more comfortable calling Navient directly THEN being transferred to this department.

Amilcar David
Amilcar David

You made a mistake by applying all those payments you made to future payments. When you do that, they will say you have no payment due. All those extra payments you made did not all go to principle. It went towards principle and interest. They screwed you over. Or maybe when you were making extra payments, an option comes up that asks how will you like to direct your overpayment. Would you like will to apply this towards future payments or 2. apply this payment for today only and still have monthly payments deducted. Your loans should have been paid off already. You got screwed royally. If your original loan was at a variable rate, sallie mae/navient would increase the interest rate to the max when they see you making extra payments. THEY ARE EVIL MOTHERFvKERS!!!! Their goal is to keep the borrower in debt forever. Even if you had an 8-10% interest rate. All those payments you made over 7 years should have paid off the loan. But all those payments were going towards future payments, building interest and not paying principle.