how much can you take out in private student loans

Private student loans are given out by banks, credit unions, or other lenders. They aren’t government-funded like federal student loans are, so they typically have higher interest rates—and sometimes require collateral. If you don’t have collateral for your private loan, then your interest rate will be even higher! In this article we will discuss how much can you take out in private student loans, private student loans interest rate, Average student loan rates, How to calculate student loan interest and can i get extra student loan money.

Private student loans are an attractive option for many students and parents, because they offer low interest rates and flexible repayment terms. But before you take out a private student loan, it’s important to know what you’re getting into. Read on to know more on how much can you take out in private student loans, private student loans interest rate, Average student loan rates, How to calculate student loan interest and can i get extra student loan money.

how much can you take out in private student loans

We begin with how much can you take out in private student loans, then, private student loans interest rate, Average student loan rates, How to calculate student loan interest and can i get extra student loan money.

Independent students can borrow up to $57,500 total in private student loans.

If you’re an independent undergraduate, you can borrow up to $12,500 annually and $9,500 in subsidized loans during your grace period. If you’re also a graduate student, you can borrow up to $20,500 per year and $138,500 total.

Your parents’ income and other financial resources do not affect your eligibility for a PLUS loan—unless they don’t qualify for a PLUS loan themselves. If this is the case, then you may be able to borrow up to the federal student loan limits for independent students.

private student loans interest rate

Next, we review private student loans interest rate, Average student loan rates, How to calculate student loan interest and can i get extra student loan money.

Private student loans are funded by banks, credit unions and online lenders, so interest rates vary from lender to lender. Many private student loan lenders offer both fixed and variable rates, so your interest rate could fluctuate over the life of the loan if you choose a variable-rate option.

Most student loan lenders set rates based on the Libor or the prime rate. However, while rates are tied to this benchmark, private lenders also typically evaluate your credit score, income and financial history to determine your interest rate. Generally, the better your financial health and credit score, the lower your interest rates will be. In order to access this information, many lenders will run a hard credit inquiry, which can knock your credit score down a few points – although you can usually get a preview of your rates and terms with only a soft credit check.

Private student loan rates (graduate and undergraduate)

LENDER	FIXED APR*	VARIABLE APR*
College Ave	3.22% to 13.95%	0.94% to 12.99%
Earnest	3.24% to 12.78%	0.94% to 11.44%
LendKey	3.99% to 8.49%	2.14% to 8.30%
SoFi	3.75% to 13.30%	1.89% to 11.98%

Average student loan rates

Now, we find out average student loan rates, How to calculate student loan interest and can i get extra student loan money.

Federal student loan rates change every year. Here’s a historical overview of how average student loan rates have evolved.

LOAN FIRST DISBURSED	UNDERGRADUATE DIRECT SUBSIDIZED LOANS	UNDERGRADUATE DIRECT UNSUBSIDIZED LOANS	GRADUATE OR PROFESSIONAL DIRECT UNSUBSIDIZED LOANS	DIRECT PLUS LOANS
July 1, 2021 – June 30, 2022	3.73%	3.73%	5.28%	6.28%
July 1, 2020 – June 30, 2021	2.75%	2.75%	4.30%	5.30%
July 1, 2019 – June 30, 2020	4.53%	4.53%	6.08%	7.08%
July 1, 2018 – June 30, 2019	5.05%	5.05%	6.60%	7.60%
July 1, 2017 – June 30, 2018	4.45%	4.45%	6.00%	7.00%
July 1, 2016 – June 30, 2017	3.76%	3.76%	5.31%	6.31%
July 1, 2015 – June 30, 2016	4.29%	4.29%	5.84%	6.84%
July 1, 2014 – June 30, 2015	4.66%	4.66%	6.21%	7.21%
July 1, 2013 – June 30, 2014	3.86%	3.86%	5.41%	6.41%
July 1, 2012 – June 30, 2013	3.40%	6.80%	6.80%	7.90%
July 1, 2011 – June 30, 2012	3.40%	6.80%	6.80%	7.90%
July 1, 2010 – June 30, 2011	4.50%	6.80%	6.80%	7.90%
July 1, 2009 – June 30, 2010	5.60%	6.80%	6.80%	7.90%
July 1, 2008 – June 30, 2009	6.00%	6.80%	6.80%	7.90%
July 1, 2007 – June 30, 2008	6.80%	6.80%	6.80%	7.90%

How to calculate student loan interest

Calculating your student loan interest can help you determine your monthly budget. To calculate how much interest you pay each month, use the following steps:

1. Find your daily interest rate. Divide your annual interest rate by 365.
2. Determine your daily interest accrual charge. Multiply your daily interest rate by your remaining principal balance.
3. Calculate your monthly payment. Multiply that daily interest accrual by the number of days in your billing cycle.

Let’s say you’re charged 5 percent interest on your $10,000 loan every month. Here’s what those steps look like:

1. 0.05 (annual interest rate) / 365 = 0.000137
2. $10,000 (principal balance) x 0.000137 = 1.37
3. 1.37 x 30 (number of days in billing cycle) = $41.10

In this scenario, you’ll pay $41.10 in interest each month.

Keep in mind that some private loans do carry a variable rate, so the daily interest rate may fluctuate over the life of the loan, typically on a monthly, quarterly or annual basis. You can also use a student loan calculator to calculate your monthly interest charge.

can i get extra student loan money

If you’ve already maxed out your federal student loans, don’t fret! Most schools also offer private loans that do not require the Free Application for Federal Student Aid (FAFSA®) form. This means you can get more money for school without having to fill out any paperwork.

To find out if you’re eligible for additional federal student loans, contact your school’s financial aid office. They’ll be able to tell you what type of loan they offer and how much money they can give you.

You can apply for a private student loan from any bank and expect to get the same APR rate. The provider offering you the loan, is the one who will do the credit check, and they are all going to do it in order to protect themselves. If you have good credit, there is no reason why you can’t get financing for your education. Make sure that you fill out as many financial aid applications as possible if you have bad credit. Always look for scholarships, because they are free money, not loans.