Sallie Mae has introduced fixed-rate, private loans for students and families who need extra money for college.
Although it is the largest student lender, Sallie Mae is a bit late to the fixed-rate party. Competitor Wells Fargo, for instance, introduced fixed-rate private loans last summer; Citizens Bank and SunTrust also offer fixed-rate versions.
U.S. Bank was offering them, too, although it announced this spring that it is getting out of the student lending business.
Sallie Mae’s version does carry competitive interest rates, ranging from as low as 5.75 percent up to 12.875 percent, depending on factors like a borrower’s credit history.
Students will almost certainly need an older co-signer to get a low rate. The loans will be available starting May 21 to undergraduate and graduate students.
Sallie Mae will continue offering variable-rate loans too, starting at 2.25 percent.
Education loans from private banks are a source of financing if students and their families find that they need more money after maxing out their out-of-pocket spending, financial aid scholarships and grants, and student loans made or backed by the federal government.