The London Interbank Offered Rate (or LIBOR, pronounced LYE-bor) is a reference rate based on the interest rates that banks offer to lend unsecured funds to other banks in the London wholesale money market (or interbank market).

Sallie Mae uses variable rates on our private student loans, and they are adjusted monthly. The interest rate is based on LIBOR plus a margin. Sallie Mae uses the one-month LIBOR as published in Reuters on the 25th of the month or next New York business day if the 25th is a weekend or holiday. The interest rate on your private loan will increase or decrease if LIBOR increases or decreases.