Choose a type of interest rate and repayment option

Both decisions will affect your monthly payments and the total cost of your Sallie Mae® Smart Option Student Loan®.

Choose a fixed or variable interest rate

Interest is the cost you’re charged for borrowing money. When you pay back a loan, you pay it back with interest, so you end up paying back more than you borrowed.

Fixed interest rates stay the same for the life of the loan.

Get predictable monthly payments with an interest rate that doesn’t change over time.

Your total student loan cost may be higher because the interest rate may be higher than the starting variable interest rate.

Variable interest rates may go up or down due to an increase or decrease to the loan's index.

Your interest rate may be less than a fixed interest rate, resulting in a lower total student loan cost.

Your interest rate can rise or fall as the market index changes, so your student loan payments may vary over time.

James compares variable and fixed interest rates

Pay it back now or later

Our Smart Option Student Loan® for Undergraduate Students offers three repayment options. Each one will affect your total student loan cost differently.

Deferred repayment option

Make no scheduled loan payments while you’re in school and in grace (six months after leaving school).footnote 1

With this undergraduate student loan repayment option, you’ll likely pay more for your total student loan cost, since unpaid interest will be added to your principal amount at the end of your grace period.

Fixed repayment option

Pay $25 every month you’re in school and in gracefootnote 1,footnote 2. Freshman students may save 13%footnote 3 on their total loan cost by choosing the fixed repayment option instead of the deferred repayment option.

While your total loan cost will likely be less than with our deferred repayment option, unpaid interest will be added to your principal amount at the end of your grace period.

Interest repayment option

Pay your interest every month you’re in school and in grace. Your undergraduate student loan interest rate will typically be 1 percentage point lower than with the deferred repayment option. Freshman students may save
23%footnote 3 on their total loan cost by choosing the interest repayment option instead of the deferred repayment option.

Your undergraduate student loan payments will likely be larger while you’re in school and in grace, but your total student loan cost will likely be lower than with the other repayment options.

Some of our other student loans have different repayment options.

Still have questions?

Call us at


Related topics

footnote Borrow responsibly
We encourage students and families to start with savings, grants, scholarships, and federal student loans to pay for college. Students and families should evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan.

footnote Loans for Undergraduate & Career Training Students are not intended for graduate students and are subject to credit approval, identity verification, signed loan documents, and school certification. Student must attend a participating school. Student or cosigner must meet the age of majority in their state of residence. Students who are not U.S. citizens or U.S. permanent residents must reside in the U.S., attend school in the U.S., apply with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident), and provide an unexpired government-issued photo ID. Requested loan amount must be at least $1,000.

footnote 1. APRs shown are based on a $10,000 Undergraduate Loan with a fixed interest rate of 4.75% to 16.53%, variable interest rate of 6.63% to 17.75%, 4-year in-school period, 6-month grace/seperation period, and 10 years of pricinpal and interest payments. A variable APR may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Variable APRs shown are the starting range of rates and SOFR changes may cause the APR to vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan's Current Pricinpal at the end of the grace/seperation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment.

footnote 2.  Examples of typical transaction for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.

footnote 3. Savings comparison assumes a freshman student with no other Sallie Mae loans receives a $10,000 Smart Option Student Loan with the most common variable rate as of January 2023.

footnote 4. Based on the percentage of borrowers who were approved for a Sallie Mae loan with a cosigner compared to the percentage of borrowers who were approved for a Sallie Mae loan without a cosigner from October 1, 2021 through September 30, 2022.

footnote 5. For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website may be subjected to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time.

footnote Sallie Mae loans are made by Sallie Mae Bank.

footnote Information advertised valid as of 9/25/2023.