Private Loans


  1. Private student loans typically have variable interest rates.  The interest rate is tied to an index, such as LIBOR or PRIME, plus a margin.
  2. The Prime Lending Rate is the interest rate lenders offer to their most creditworthy customers. A rate of LIBOR + 2.8% is roughly the same as PRIME + 0.0%.

Comparison Example of Two Private Loans Based on a $10,000 Loan With Two Disbursements

  Lender 1 Lender 2
APR 10.55% 9.64%
Interest Rate LIBOR + 9.75% LIBOR + 9.75%
Disbursement Fee 3% 3%
Monthly Interest Payment (In-School and During Grace) Four Payments of $42.92 (Following First Disbursement); and 47 Payments of $85.83 (Following Second Disbursement) No payments.
Monthly Principal and Interest Payment (Following Graduation) $170.99 $155.88
Repayment Term (In Months) 84 180
Total Amount Paid $18,569.30 $28,058.51