What Is APR?
APR stands for Annual Percentage Rate. It's a measure of the cost of borrowing money, expressed as a percentage of the loan amount. APR includes not only the interest rate charged on a loan, but also any additional fees or charges associated with the loan.
With private student loans, APR is an important factor to consider when comparing loan offers from different lenders. The APR can vary depending on the lender, loan term, repayment plan, and other factors. Generally, private student loans have variable interest rates, which means that the interest rate can fluctuate over the life of the loan based on market conditions.
When comparing loan offers, it's important to look at the APR rather than just the interest rate. A loan with a lower interest rate may not necessarily be the best option if it has high fees or other charges that drive up the APR.
Keep in mind that the APR you receive on a private student loan may also depend on your credit history and other factors. Lenders use credit scores and other criteria to evaluate borrowers' creditworthiness and determine the interest rates and fees they are offered.
What Is The Difference Between Fixed And Variable APR?
The main difference between fixed and variable APR is how the interest rate on a loan is determined and whether it can change over time.
A fixed APR is an interest rate that remains the same throughout the life of the loan. This means that the borrower's monthly payments will stay the same, making it easier to budget and plan for the future. Fixed APRs are typically higher than variable APRs initially, but they offer more stability and predictability.
On the other hand, a variable APR is an interest rate that can change over time based on market conditions. For example, if the benchmark interest rate set by the Federal Reserve increases, the interest rate on a variable APR loan may also go up. This means that the borrower's monthly payments could increase or decrease depending on the changes in interest rates. Variable APRs are typically lower than fixed APRs initially, but they can be riskier since the borrower's payments may increase over time.
When it comes to private student loans, borrowers can choose between fixed and variable APR options. Fixed APR loans offer a predictable repayment schedule and are generally a good option for borrowers who want to lock in a rate and avoid surprises. Variable APR loans can be a good option for borrowers who expect interest rates to remain low or who plan to repay their loans quickly.
What Is The Difference Between Federal And Private Student Loans?
Federal and private student loans are two different types of loans that students can use to pay for college or other post-secondary education.
Federal student loans are funded by the government's U.S. Department of Education. To apply for federal student loans, you must complete the Free Application for Federal Student Aid (FAFSA). The FAFSA is used to determine your eligibility for federal student loans, as well as other types of financial aid such as grants and work-study.
Private student loans are offered by banks, credit unions, and other financial institutions. Private student loans may be a fit for the following situations:
- When federal student loans don't cover the full cost of tuition and other expenses
- When federal student loans don't cover the full cost of tuition and other expenses
- When a borrower has reached their federal loan limits and needs additional funding
- When a borrower has good credit and can qualify for a lower interest rate on a private loan than on a federal loan
- When a borrower needs the funds quickly and can't wait for the federal loan process to complete
Should I Use A Cosigner On My Loan?
According to Earnest, borrowers are 5x more likely to be approved. All of the listed companies on our page allow for cosigners.
Having a cosigner can improve your chances of being approved for a loan and may also result in a lower interest rate. However, keep in mind that a cosigner is taking on legal responsibility for repaying the loan if the primary borrower is unable to do so. It's important to carefully consider the financial implications and discuss the responsibilities and expectations with any potential cosigner before applying for a loan.
If you don't have a cosigner, improving your credit score can increase your chances of getting approved for a loan. You can start by paying bills on time, keeping credit card balances low, and checking your credit report for errors.
Will Applying For Student Loans Affect Your Credit Score?
Yes, applying for student loans can affect your credit score. Whenever you apply for a loan, the lender typically conducts a credit check, which can result in a hard inquiry on your credit report.
Hard inquiries can have a negative impact on your credit score, especially if you have several of them within a short period of time. However, the impact is usually small, and your score should recover over time as you make on-time payments and your credit history improves.
It's important to shop around for the best student loan rates, but be mindful of the number of loan applications you submit.
Sallie Mae Disclosures:
Borrow Responsibly We encourage students and families to start with savings, grants, scholarships, and federal student loans to pay for college. Evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan. 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.
1 Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans 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. Advertised variable rates are the starting range of rates and may 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 Principal at the end of the grace/separation 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.
2 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 will be subject 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.
3 Although we do not charge a penalty or fee if you prepay your loan, any prepayment will be applied as outlined in your promissory note—first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal.
4 Based on a comparison of approval rates for Sallie Mae Smart Option Student Loans for undergraduate students who applied with a cosigner versus without a cosigner during a rolling 12-month period from October 1, 2022 through September 30, 2023.
Best Education is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
SALLIE MAE RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS, SERVICES, AND BENEFITS AT ANY TIME WITHOUT NOTICE.
Information valid as of 10/25/2024.
Sallie Mae loans are made by Sallie Mae Bank.
Sallie Mae, the Sallie Mae logo, and other Sallie Mae names and logos are service marks or registered service marks of Sallie Mae Bank. All other names and logos used are the trademarks or service marks of their respective owners.
©2024 Sallie Mae Bank. All rights reserved. SLM Corporation and its subsidiaries, including Sallie Mae Bank, are not sponsored by or agencies of the United States of America.
Ascent Disclosures:
14x higher acceptance rates were observed between June and August 2023 across all products when a loan application is cosigned vs without a cosigner. Ascent’s minimum credit requirements vary based on loan product, credit history, and whether you’re applying with a cosigner. You can see your rates without impacting your credit score to help you determine which product could be best for you based on your unique circumstances.
2For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits.
3Loan features and information advertised are valid as of 11/1/2024 and are subject to change at any time. Loans subject to individual approval, restrictions and conditions apply. See terms and conditions at AscentFunding.com/Rates.
4The final ACH discount approved depends on the borrower’s credit history, verifiable cost of attendance, and is subject to credit approval and verification of application information. Automatic Payment Discount of 0.25% is for credit-based loans and a 1.00% discount is for outcomes-based loans when you enroll in automatic payments. For more information, see repayment examples (https://www.ascentfunding.com/annual-percentage-rate-apr-sample/) or review the Ascent Student Loans Terms and Conditions (https://www.ascentfunding.com/terms-conditions/).
51% Cash Back Graduation Reward subject to terms and conditions, click here for details.
6 Annual Percentage Rate (APR) displayed above are effective as of 11/1/2024 and reflect an Automatic Payment Discount of 0.25% for credit-based college student loans when you enroll in automatic payments. For more information, see repayment examples (https://www.ascentfunding.com/annual-percentage-rate-apr-sample/?utm_source=ascenthubspot&utm_medium=email&utm_campaign=peak-2024-serialization) or review the Ascent Student Loans Terms and Conditions (https://www.ascentfunding.com/terms-conditions/?utm_source=ascenthubspot&utm_medium=email&utm_campaign=peak-2024-serialization). The final amount approved depends on the borrower’s credit history, verifiable cost of attendance as certified by an eligible school and is subject to credit approval and verification of application information. Lowest interest rates require full principal and interest (Immediate) payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the examples above, based on the amount of time you spend in school and any grace period you have before repayment begins.
College Ave Disclosures:
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1 All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
2 As certified by your school and less any other financial aid you might receive. Minimum $1,000.
3 This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 11/01/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
Credible Disclosures:
https://www.credible.com/student-loans¹
Prequalified Rates Disclosure:
Prequalified rates are based on the information you provide and a soft credit inquiry. Receiving prequalified rates does not guarantee that the Lender will extend you an offer of credit. You are not yet approved for a loan or a specific rate. All credit decisions, including loan approval, if any, are determined by Lenders, in their sole discretion. Lowest rate advertised is not available for all loan sizes, types, or purposes, and assumes a very well qualified borrower with an excellent credit profile.
Rates and Terms Disclosure (Private Student Loan)
Rates displayed include Automatic Payment and Loyalty Discounts, where applicable. Note that such discounts do not apply while loans are in deferment. The lenders on the Credible.com platform offer fixed rates ranging from 3.49% - 17.99% APR and Variable interest rates from 4.63% - 17.99% APR. Variable rates will fluctuate over the term of the borrower's loan with changes in the Index rate. The Index will be either LIBOR or SOFR. Rates are subject to change at any time without notice. Your actual rate may be different from the rates advertised and/or shown above and will be based on factors such as the term of your loan, your financial history (including your cosigner’s (if any) financial history) and the degree you are in the process of achieving or have achieved. While not always the case, lower rates typically require creditworthy applicants with creditworthy co-signers, graduate degrees, and shorter repayment terms (terms vary by lender and can range from 5-20 years) and include Automatic Payment and Loyalty discounts, where applicable. Loyalty and Automatic Payment discount requirements as well as Lender terms and conditions will vary by lender and therefore, reading each lender’s disclosures is important. Additionally, lenders may have loan minimum and maximum requirements, degree requirements, educational institution requirements, citizenship and residency requirements as well as other lender-specific requirements. Lenders will conduct a hard credit pull when you submit your application. Hard credit pulls will have an impact on your credit score.