How much you can borrow with private student loans depends on a few factors, such as your cost of attendance, ender, and financial profile.
We’ll break down how much private student loan money you might be eligible for—and how to figure out the right amount to borrow so you’re not drowning in debt later.
| Company | Funding | Rating (0-5) |
|---|---|---|
Terms & Disclosures
Information advertised valid as of 06/15/2026. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s). All rates shown 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. College Ave Student Loan Servicing, LLC, NMLS#1263410 NMLS Consumer Access College Ave’s student loan products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or BTG Pactual Bank, N.A., member FDIC |
$1,000 – 100% of costs |
Terms & Disclosures
Information advertised valid as of 06/15/2026. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s). All rates shown 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. College Ave Student Loan Servicing, LLC, NMLS#1263410 NMLS Consumer Access College Ave’s student loan products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or BTG Pactual Bank, N.A., member FDIC |
Terms & Disclosures
Borrow responsibly 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., and apply with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident). Requested loan amount must be at least $1,000. 1. Loan application must be submitted to see available rates. 2. Although we do not charge you a penalty or fee if you prepay your loan, any prepayment will be applied as provided in your promissory note — first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal. 3. Based on a comparison of the percentage of students who were approved with a cosigner to the percentage of students who were approved without a cosigner from October 1, 2023 to September 30, 2024. 4. The borrower or cosigner must enroll in auto debit through Sallie Mae to receive a 0.25 percentage point interest rate reduction benefit. This benefit 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. 5. Advertised APRs for undergraduate students assume a $10,000 loan with a 4-year in-school period, a 6-month grace, and the longest loan term offered. 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. 6. Savings comparison assumes a freshman student receives a $10,000 Smart Option Student Loan with the most common variable rate as of January 2025 and the longest loan term offered. 7. Examples of typical transactions for a $10,000 Smart Option Student Loan with the most common fixed rate, Fixed Repayment Option, two disbursements, a 4-year in-school period, and a 6-month grace: For a borrower with the shortest loan term, it works out to 16.16% fixed APR, 51 payments of $25.00, 119 payments of $296.32 and one payment of $41.82, for a total loan cost of $36,578.90. For a borrower with the longest loan term, it works out to 16.38% fixed APR, 51 payments of $25.00, 177 payments of $265.54 and one payment of $173.00, for a total loan cost of $48,448.58. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not. Information advertised valid as of 05/26/2026. ALLIE MAE RESERVES 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. Sallie Mae loans are made by Sallie Mae Bank. |
$1,000 – 100% of costs |
Terms & Disclosures
Borrow responsibly 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., and apply with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident). Requested loan amount must be at least $1,000. 1. Loan application must be submitted to see available rates. 2. Although we do not charge you a penalty or fee if you prepay your loan, any prepayment will be applied as provided in your promissory note — first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal. 3. Based on a comparison of the percentage of students who were approved with a cosigner to the percentage of students who were approved without a cosigner from October 1, 2023 to September 30, 2024. 4. The borrower or cosigner must enroll in auto debit through Sallie Mae to receive a 0.25 percentage point interest rate reduction benefit. This benefit 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. 5. Advertised APRs for undergraduate students assume a $10,000 loan with a 4-year in-school period, a 6-month grace, and the longest loan term offered. 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. 6. Savings comparison assumes a freshman student receives a $10,000 Smart Option Student Loan with the most common variable rate as of January 2025 and the longest loan term offered. 7. Examples of typical transactions for a $10,000 Smart Option Student Loan with the most common fixed rate, Fixed Repayment Option, two disbursements, a 4-year in-school period, and a 6-month grace: For a borrower with the shortest loan term, it works out to 16.16% fixed APR, 51 payments of $25.00, 119 payments of $296.32 and one payment of $41.82, for a total loan cost of $36,578.90. For a borrower with the longest loan term, it works out to 16.38% fixed APR, 51 payments of $25.00, 177 payments of $265.54 and one payment of $173.00, for a total loan cost of $48,448.58. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not. Information advertised valid as of 05/26/2026. ALLIE MAE RESERVES 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. Sallie Mae loans are made by Sallie Mae Bank. |
Terms & Disclosures
In-School Loans Disclosures
Earnest Private Student Loans are subject to credit approval. Before applying for private student loans, it’s best to maximize your other sources of financial aid first. It’s recommended to use a 3-step approach to assembling the funds you need: 1) Look for funds you don’t have to pay back, like scholarships, grants, and work-study opportunities. 2) Next, fill out a FAFSA® form to apply for federal student loans options. 3) Finally, consider a private student loan to cover any difference between your total cost of attendance and the amount not covered in steps 1 and 2. For more information, visit the Department of Education website at studentaid.gov.
Auto Pay Discount
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option.
Cosigner Release
To qualify for automatic cosigner release, the outstanding principal balance of your loan must be paid down to 50% or less of the original principal balance. The primary borrower must have made 36 months of required payments after the end of the Interim Period. The primary borrower must meet our eligibility and minimum credit requirements. Additional terms and conditions may apply.
To request cosigner release, the primary borrower must have made 12 consecutive, monthly on-time principal and interest payments (or an amount equal thereto) immediately preceding the cosigner release application. The primary borrower must satisfy certain eligibility and credit criteria at the time of application. Additional terms and conditions may apply.
Grace Period
Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
Loan Cost Examples
Available interest rates are subject to change. Interest rates as of 03/19/2026. Earnest’s Loan Cost Examples:
1.) These examples provide estimates based on principal and interest payments beginning immediately upon loan disbursement. Variable annual percentage rate (“”APR””): A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $27,511.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $27,054.10.
2.) These examples provide estimates based on interest-only payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $35,515.14. For a variable loan, after your starting rate is set, your rate will then vary with the market. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $140.42 for 57 months. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $34,886.94. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $137.42 for 57 months.
3.) These examples provide estimates based on fixed $25 payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $253.39) and a 16.85% interest rate without Auto Pay (14.92% APR) would result in a total estimated payment amount of $47,035.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $246.61) and a 16.49% interest rate without Auto Pay (14.65% APR) would result in a total estimated payment amount of $45,814.80. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $25.00.
4.) These examples provide estimates based on deferred payments. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $275.17) and a 16.85% interest rate without Auto Pay (14.67% APR) would result in a total estimated payment amount of $49,530.60. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $268.03) and a 16.49% interest rate without Auto Pay (14.39% APR) would result in a total estimated payment amount of $48,245.40. Your actual repayment terms may vary. Other repayment options are available. It is important to note that the 0.25% Auto Pay discount is not available when the deferred repayment option has been selected and the loan is in the interim period. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $0.
Loan Minimum
Residents of Hawaii must request a loan of at least $1,501.
Repayment Terms and Options
Repayment terms and repayment options available vary based on loan type.
Skip a Payment
Earnest clients may skip a payment through a single, one-month forbearance during a 12 month period. Your first request to skip a pay can be made once you’ve made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Any unpaid accrued interest may capitalize (added to the principal balance) at the end of the forbearance period by adding unpaid accrued interest to the outstanding principal as permitted by law and the terms of the loan agreement. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
No Fees
Earnest does not charge fees for origination, late payments, returned check, or prepayments. Florida Stamp Tax: For Florida residents, Florida documentary stamp tax is required by law, calculated as $0.35 for each $100 (or portion thereof) of the principal loan amount, the amount of which is provided in the Final Disclosure. Lender will add the stamp tax to the principal loan amount. The full amount will be paid directly to the Florida Department of Revenue. Certificate of Registration No. 78-8016373916-1.
Earnest Private Student Loans are made by FinWise Bank, Member FDIC. FinWise Bank, 756 East Winchester, Suite 100, Murray, UT 84107. Earnest student loans are serviced by Earnest Operations LLC, 300 Frank H. Ogawa Plaza, Suite 340, Oakland, CA 94612. NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770). FinWise Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.
Interest Rates Disclosure: |
$1,000 – 100% of costs |
Terms & Disclosures
In-School Loans Disclosures
Earnest Private Student Loans are subject to credit approval. Before applying for private student loans, it’s best to maximize your other sources of financial aid first. It’s recommended to use a 3-step approach to assembling the funds you need: 1) Look for funds you don’t have to pay back, like scholarships, grants, and work-study opportunities. 2) Next, fill out a FAFSA® form to apply for federal student loans options. 3) Finally, consider a private student loan to cover any difference between your total cost of attendance and the amount not covered in steps 1 and 2. For more information, visit the Department of Education website at studentaid.gov.
Auto Pay Discount
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option.
Cosigner Release
To qualify for automatic cosigner release, the outstanding principal balance of your loan must be paid down to 50% or less of the original principal balance. The primary borrower must have made 36 months of required payments after the end of the Interim Period. The primary borrower must meet our eligibility and minimum credit requirements. Additional terms and conditions may apply.
To request cosigner release, the primary borrower must have made 12 consecutive, monthly on-time principal and interest payments (or an amount equal thereto) immediately preceding the cosigner release application. The primary borrower must satisfy certain eligibility and credit criteria at the time of application. Additional terms and conditions may apply.
Grace Period
Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
Loan Cost Examples
Available interest rates are subject to change. Interest rates as of 03/19/2026. Earnest’s Loan Cost Examples:
1.) These examples provide estimates based on principal and interest payments beginning immediately upon loan disbursement. Variable annual percentage rate (“”APR””): A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $27,511.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $27,054.10.
2.) These examples provide estimates based on interest-only payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $35,515.14. For a variable loan, after your starting rate is set, your rate will then vary with the market. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $140.42 for 57 months. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $34,886.94. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $137.42 for 57 months.
3.) These examples provide estimates based on fixed $25 payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $253.39) and a 16.85% interest rate without Auto Pay (14.92% APR) would result in a total estimated payment amount of $47,035.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $246.61) and a 16.49% interest rate without Auto Pay (14.65% APR) would result in a total estimated payment amount of $45,814.80. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $25.00.
4.) These examples provide estimates based on deferred payments. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $275.17) and a 16.85% interest rate without Auto Pay (14.67% APR) would result in a total estimated payment amount of $49,530.60. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $268.03) and a 16.49% interest rate without Auto Pay (14.39% APR) would result in a total estimated payment amount of $48,245.40. Your actual repayment terms may vary. Other repayment options are available. It is important to note that the 0.25% Auto Pay discount is not available when the deferred repayment option has been selected and the loan is in the interim period. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $0.
Loan Minimum
Residents of Hawaii must request a loan of at least $1,501.
Repayment Terms and Options
Repayment terms and repayment options available vary based on loan type.
Skip a Payment
Earnest clients may skip a payment through a single, one-month forbearance during a 12 month period. Your first request to skip a pay can be made once you’ve made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Any unpaid accrued interest may capitalize (added to the principal balance) at the end of the forbearance period by adding unpaid accrued interest to the outstanding principal as permitted by law and the terms of the loan agreement. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
No Fees
Earnest does not charge fees for origination, late payments, returned check, or prepayments. Florida Stamp Tax: For Florida residents, Florida documentary stamp tax is required by law, calculated as $0.35 for each $100 (or portion thereof) of the principal loan amount, the amount of which is provided in the Final Disclosure. Lender will add the stamp tax to the principal loan amount. The full amount will be paid directly to the Florida Department of Revenue. Certificate of Registration No. 78-8016373916-1.
Earnest Private Student Loans are made by FinWise Bank, Member FDIC. FinWise Bank, 756 East Winchester, Suite 100, Murray, UT 84107. Earnest student loans are serviced by Earnest Operations LLC, 300 Frank H. Ogawa Plaza, Suite 340, Oakland, CA 94612. NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770). FinWise Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.
Interest Rates Disclosure: |
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$1,000 – 100% of costs |
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$1,000 – 100% of costs |
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$1,000 – 100% of costs |
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Table of Contents
What are the limits on private student loans?
Limits for private student loans are different from those for federal loans. Private lenders use factors such as your income, credit score, current major, future projected income, and whether you have a cosigner to determine how much to lend you.
Most private lenders have annual and aggregate loan limits—the total amount you’re allowed to borrow across all years of school, including federal and private loans.
Here are several lenders’ maximum annual limits:
| Lender | Limits |
| College Ave | $1,000 – 100% of certified costs |
| Sallie Mae | $1,000 – 100% of certified costs |
| Earnest | $1,000 – 100% of certified costs |
| Ascent | $2,001 – $200,000 |
Lenders’ maximum aggregate limits often range from $75,000 to $120,000 for undergraduate students and $150,000 to $300,000 for graduate or professional students.
The aggregate limits consider how much you’ve already taken out in federal and private student loans. Students who have already borrowed money for school tend to be eligible for less than those who haven’t yet borrowed.
Step-by-step: How to calculate what you actually need to borrow
The amount you can borrow might be much higher than the amount you should borrow. Your school’s annual cost of attendance—the full estimated cost of going to school for one year, including tuition, fees, room and board, books, supplies, and personal expenses—may be more than you can afford to repay.
One rule of thumb is not to borrow more than you’ll earn in your first year out of college. If you exceed that amount, you may find it difficult to repay your student loans on top of other bills.
You can use Payscale or the official Bureau of Labor Statistics wage data site to find the average starting salary for your profession. The website CollegeSimply reports data on starting salaries the colleges themselves report to the U.S. Department of Education. Search for your school, and look at the starting salaries.
If you know where you want to work after graduation, you can look up salary information for that region. The more specific you are, the less likely you are to borrow more than you can easily afford.
You should also consider whether you will attend graduate or professional school after earning an undergraduate degree. If so, you should factor in those costs when deciding how much to borrow for your bachelor’s degree.
Keep in mind that private student loans offer fewer options for struggling borrowers than federal loans—for example, you’re not likely to qualify for income-driven repayment plans or loan forgiveness options for private student loans.
Calculate how much you can afford in student loans
Before taking out a private student loan, you should determine both how much you might need to borrow and whether you can afford to pay the loan back.
To find out how much you might need to borrow, calculate the following:
- How much you need to live on for the semester. This should include the cost of tuition, books, fees, and supplies.
- How much your room and board, rent, utilities, internet, and cellphone will cost for the semester.
- How much you expect to spend on variable expenses, such as groceries, gas, clothes, and entertainment, that semester.
- Add up the amounts above, then subtract any grant aid, contributions from savings, or earnings you can apply to this semester’s education costs.
- Next, subtract any federal loans or tax credits such as the American Opportunity or Lifetime Learning credit.
This should give you an estimate of the amount you’ll need to borrow for the semester.
Federal vs. private student loan limits
| Federal | Private | |
| Annual limit | $5,500 – $12,500 for undergrads | Often up to full certified cost of attendance |
| Aggregate limit | $31,000 (dependent students), $57,500 (independent students) | $75,000 – $120,000 (undergrad); up to $300,000 (grad/professional) |
| What to know | Come with fixed interest rates, income-driven repayment, and forgiveness programs | Rates, terms, and repayment flexibility vary widely by lender |
Calculate your loan repayment
To determine whether you can afford to pay the loan back, create a proposed budget using your expected postgraduation starting monthly salary.
Subtract the following expected monthly amounts:
- Taxes
- Healthcare
- Rent
- Food
- Transportation
- Insurance
- Travel
- Entertainment
See whether you expect to make your loan payments comfortably. You can also use other important ratios that determine financial health. For example, the long-term debt coverage ratio is:
Annual gross income / Annual debt payments
This personal finance metric shows how well your income can cover your annual debt payments. A ratio above 2.5 is considered financially healthy. If it’s lower, you might have trouble repaying your loans.
You should only use your student loans to cover necessary expenses—not spring break trips or concert tickets. You’ll need to repay every dollar you borrow with interest, so try to avoid spending frivolously.
How to lower the amount you need in student loans
Take advantage of scholarships and grants to minimize your private student loan burden. Ask your college advisor about any awards you may be eligible for, and look online for scholarships that fit your major and interests.
A part-time job can also help you cover expenses and minimize the need for loans. Try to find a gig that comes with extra cost-of-living benefits, such as waiting tables at a restaurant with free shift meals or working as an RA for free or reduced housing.
Before applying for a private student loan, use our student loan calculator to estimate your monthly payments and long-term costs. It’s one of the best ways to avoid overborrowing and build a repayment plan that fits your future budget.
When you’re ready to begin your search, we recommend starting with our list of the best private student loans.
About our contributors
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Written by Zina KumokZina Kumok is a personal finance writer dedicated to explaining complex financial topics so real people can understand them. As a former newspaper reporter, she has covered everything from murder trials to the Final Four.
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Edited by Kristen Barrett, MATKristen Barrett is a managing editor at LendEDU. She lives in Cincinnati, Ohio, with her wife and their pack of senior rescue dogs. She has edited and written personal finance content since 2015.