Private student loans that work hard, like you

A private student loan is money that’s loaned to you by a bank or other financial institution to help pay for your education. All loans need to be paid back. When you pay back loans for school, your repayment amount includes the full amount you borrowed, plus interest (the amount your lender charges you for borrowing the money).

In terms of how much you should take out for college, borrow only what you think you can afford to pay back later. Think about your future career and how much you may make in your chosen field. To help estimate your future income potential, you can visit the US Department of Labor at bls.gov.

Federal and private loans for college use different eligibility criteria. 

Federal student loans are offered by the government. You can fill out the FAFSA^® to determine eligibility. 

• For Subsidized Loans, the US Department of Education pays the interest while the student is in school at least half time, grace (if offered) and authorized deferment periods.
• For Unsubsidized Loans, the borrower is responsible for paying interest for the full loan term, including while in-school or during grace periods or a post-school deferment.

Private student loans, offered by banks and financial institutions, are based on your creditworthiness. Your credit—and your cosigner’s credit—are evaluated, along with other information provided on your application. Applying for a private student loan with a creditworthy cosigner may increase your chances for approval and may help get you a better rate.

International students who reside in and attend school in the U.S. can apply for Sallie Mae private student loans with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident).

You should generally consider federal student loans first, and then take out private loans for school if you still need money for college.

Private loans for students are credit-based. That means that a lender will look at your history of borrowing money and paying it back. Federal student loans, on the other hand, are generally based on financial situation and federal guidelines rather than credit.

If you don’t have a credit history, you may need a cosigner. A cosigner can be a parent, relative, or any other creditworthy individual. Their good credit history may help you get student loans for college.

Along with you, a cosigner accepts responsibility for repaying your private student loan. If you keep your loan in good standing, making on-time payments, it can be a great way to build your own credit. If you fall behind or don’t pay back your loan, your credit and your cosigner's credit can suffer if payments aren't made on time.

First, figure out what type of private student loan you need. There are private student loans for students in undergraduate, graduate, career training, dental, medical, and health profession programs. Sallie Mae also offers private student loans for graduates studying for the bar exam, or relocating for medical and dental residencies. 

Next, you need to do some research and find lenders you may be interested in getting a student loan from. Once you’ve found a couple of lenders, you can compare their private student loan options to see what each offers:

• What is the interest rate range?
• Can you choose a variable or fixed interest rate?
• Are there student loan fees, like an origination fee?
• Is there a choice of in-school repayment options (fixed, interest only, or deferred)?
• Are there benefits that help you lower your interest rate?
• Is there a program that lets you make more manageable payments (like interest only) for a period of time after you graduate?
• Do they give you access to your FICO^® Credit Score?
• Are there other benefits that make their particular student loans valuable?
• Is the company reputable, with many years of experience?

When you’re ready to apply, you can do it directly from each lender’s website. You should apply after you’ve made your school decision and once you know how much you need to borrow, so you won’t have to submit separate student loan applications for schools you’re considering. There typically isn’t a fee to apply for private student loans, but there are a few things you should know before you apply for student loans:

• You’ll need to fill out basic personal information and financial information.
• You’ll be asked to choose the interest rate type and repayment option for your loan.
• You generally can apply with a creditworthy cosigner during the application process. If you apply with a cosigner, they’ll have to supply their financial information in the student loan application.

Our private student loan application process only takes about 10 minutes to receive a credit result in many cases.

Understand the student loan application process.

When you pay off your student loan in full, you’ll have paid more than the amount you originally borrowed. This is generally due to the accrual of interest and interest capitalization. Interest rates are the rates charged to borrow money. It’s calculated as a percentage of your Current Principal. There are two primary types of interest rates: fixed and variable.

• A fixed interest rate is an interest rate that stays the same for the life of the loan.
• A variable interest rate is an interest rate that may go up or down due to an increase or decrease to the loan’s index.

Both your rate and rate type can be found on your billing statement and loan documents.

For a variable rate loan, most lenders start with a benchmark index and add a margin. For instance, if the lender uses the Secured Overnight Financing Rate (SOFR) as its index and then adds a 5% margin, the rate will be quoted as “SOFR + 5%.” While economic conditions may make the benchmark index go up or down, the margin added will usually remain fixed.

You can find your loan’s index and margin on your Promissory Note and loan documents.

If you need more help, you can learn more about interest rates or choose which rate is right for you.

After you've submitted your student loan application, you’ll typically get a credit decision. Once approved, you'll also get notices to review, accept, and e-sign your loan terms.

Your school will have to certify your loan amount before it can be disbursed (paid to the school). Then you’ll get a Final Disclosure spelling out the details.

You have the right to cancel your private student loan as described in the Final Disclosure before it’s disbursed (sent) to your school.

Learn what happens after your loan is approved.

Once your first semester begins, it’ll be helpful to keep track of both your federal and private student loans. Here are some tips for managing student loans and debt:

1. You may apply for a new loan every year that you’re a student.
2. You may need to be enrolled in school at least half-time.
3. Interest accrues on your student loan throughout the life of the loan. Making in-school payments may lower the total cost of your loan.
4. Once you leave school, whether you graduate or not, you’ll generally have a grace period of at least six months before you begin to make principal and interest payments.
5. As you continue to take out federal or private student loans throughout your years in college, keep a list of the lenders, how much you’re borrowing—and don’t forget to borrow responsibly.

Learn about managing your student loans.