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Choose a variable or fixed 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.

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

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

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

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

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

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

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

In school In grace After school No payments Principal & interest

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

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

In school In grace After school $25 a month Principal & interest

Pay $25 every month you’re in school and in grace, and you can save an average of 12% on your total undergraduate student loan cost when compared to our deferred repayment option.

While your total loan cost will 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

In school In grace After school Pay interest monthly Principal & interest

Pay your interest every month you’re in school and in grace. Your undergraduate student loan interest rate will be 1 percentage point lower than with the deferred repayment option and you can save an average of 25% on your total student loan cost.

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.

Steven explains how different repayment options can affect your total loan cost

Still have questions?

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Encouraging Responsible Borrowing
Sallie Mae has helped more than 34 million Americans pay for college since 1972. We encourage students and families to supplement their savings by exploring grants, scholarships, and federal and state student loans, and to consider the anticipated monthly payments on their total student loan debt and their expected future earnings before considering a private education loan.

This information is for borrowers attending degree-granting institutions only. You must be attending or have attended a participating school located in the U.S. during an eligible prior enrollment period. You must be a U.S. citizen or a permanent resident or a Non-U.S. citizen borrower who is attending or has attended a school located in the U.S. applying with a creditworthy cosigner (who must be a U.S. citizen or permanent resident) and required U.S. Citizenship and Immigration Service (USCIS) documentation. U.S. citizens and permanent residents enrolled in eligible study abroad programs or who are attending or have attended schools located outside the U.S. are also eligible. Applications are subject to a requested minimum loan amount of $1,000. Current credit and other eligibility criteria apply.

This repayment example is based on a typical loan to a freshman borrower who chooses a variable rate and the Fixed Repayment Option for a $10,000 loan, with two disbursements, and a 7.77% variable APR. It works out to 51 payments of $25.00, 119 payments of $147.30 and one payment of $116.61, for a Total Loan Cost of $18,920.31. Variable rates may increase over the life of the loan.

Interest rates for Fixed and Deferred Repayment Options are higher than interest rates for the Interest Repayment Option. You're charged interest starting at disbursement, while in school and during your six-month separation or grace period. When you enter principal and interest repayment, Unpaid Interest will be added to your loan's Current Principal. Variable rates may increase over the life of the loan. Advertised APRs assume a $10,000 loan to a freshman with no other Sallie Mae loans.

Smart Option Student Loans are made by Sallie Mae Bank or a lender partner.

Information advertised valid as of 1/25/2017.

WE RESERVE THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS, SERVICES, AND BENEFITS AT ANY TIME WITHOUT NOTICE. CHECK SALLIEMAE.COM FOR THE MOST UP-TO-DATE PRODUCT INFORMATION.