Sallie Mae vs Citizens: Private student loans compared

For most borrowers, the choice between Sallie Mae and Citizens Bank comes down to a trade-off between specialized benefits and streamlined convenience. Choose Sallie Mae if you need specialized loan products for medical or graduate school and value borrower perks like free study tools. Choose Citizens Bank if you have strong credit and want the convenience of Multi-Year Approval to secure funding for your entire degree at once.

Both lenders are established titans in the private student loan market, offering competitive rates and covering up to 100% of school-certified costs. However, their approach to borrower support and repayment flexibility differs significantly. This guide compares their rates, terms, and eligibility requirements head-to-head to help you make the right financial decision for your education.

By the end, you’ll be able to:

• Identify which lender offers better rates for your specific credit profile
• Understand key differences in loan terms and borrower benefits like cosigner release
• Determine which lender’s unique features match your educational needs

When private student loans make sense

Before diving into the specific comparison between Sallie Mae and Citizens, it is crucial to understand where private loans fit in the broader financial aid landscape. Private student loans are designed to be “gap financing”—a tool used to cover the remaining cost of attendance after you have exhausted all scholarships, grants, and federal student loan options.

Federal loans generally offer superior protections, such as income-driven repayment plans and potential loan forgiveness, which private lenders rarely match. For this reason, families should always file the FAFSA and accept federal aid first. According to Betsy Mayotte, student loan expert, “In general, federal loans should be your first stop, but private loans can be appropriate when you’ve maxed out your federal eligibility.”

Private loans become necessary when the gap between federal aid and the total cost of tuition, room, and board remains unfilled. In this scenario, the priority shifts to finding a lender that offers the lowest cost of borrowing and the most flexible terms. Private loans rely heavily on creditworthiness. Students often require a cosigner with strong credit to qualify for the lowest advertised rates, making the choice of lender a family financial decision rather than just a student one.

Sallie Mae and Citizens Bank at a glance

To help you make a quick assessment, the table below provides a side-by-side comparison of the core features offered by both lenders. Both institutions are major players in the student lending space, but their product structures have distinct differences.

Sallie Mae is a market leader dedicated almost exclusively to education finance, known for its wide array of specialized loan products for graduate and professional students. Citizens Bank is a large regional bank with a national lending footprint, distinguishing itself with relationship discounts and a simplified multi-year application process.

Source: Sallie Mae and Citizens Bank official websites (data current as of May 2025).

Interest rates and APR comparison

The interest rate is the most significant factor determining the total cost of a loan. Both Sallie Mae and Citizens Bank offer a choice between fixed and variable interest rates. A fixed rate remains the same for the life of the loan, providing predictable monthly payments. A variable rate may start lower but can fluctuate monthly or quarterly based on market conditions, potentially increasing your payment amount over time.

As of May 2025, both lenders offer competitive rates for undergraduate borrowers, though the lowest advertised rates are reserved for applicants (or cosigners) with excellent credit scores and lengthy credit histories. Generally, Citizens Bank is known for offering highly competitive rates to borrowers with established credit profiles, especially existing bank customers who qualify for loyalty discounts.

According to Mark Kantrowitz, financial aid expert, “Private loans can offer variable interest rates, which may be lower than federal fixed rates initially.” However, borrowers must weigh this initial savings against the risk of rising rates in the future.

As reported by both Sallie Mae and Citizens Bank, each lender offers a 0.25% interest rate reduction if you enroll in automatic payments. This discount is standard across the industry but essential for reducing the long-term cost of borrowing. It is important to note that your specific rate will depend on your creditworthiness, the loan term you choose, and whether you have a cosigner. Shorter repayment terms typically carry lower interest rates than longer terms.

Eligibility requirements and cosigner policies

Qualifying for a private student loan requires meeting specific credit and enrollment criteria. Since most undergraduate students have limited credit history and income, applying with a creditworthy cosigner is standard practice. This often improves the odds of approval and secures a lower interest rate.

Citizenship and enrollment: Both lenders require borrowers to be U.S. citizens or permanent residents, or international students with a creditworthy U.S. citizen cosigner. You must be enrolled at least half-time in a degree-granting program at an eligible institution.

Credit requirements: While neither lender publicly discloses a strict minimum credit score, a score in the mid-to-high 600s is typically the baseline for consideration, with scores in the mid-700s required for the most competitive rates. Income and debt-to-income ratio are also heavily weighted during underwriting.

Cosigner release: This is a critical differentiator for families concerned about long-term credit ties.

• Sallie Mae offers one of the shortest paths to cosigner release in the industry. According to Sallie Mae, borrowers can apply to release their cosigner after making just 12 consecutive on-time principal and interest payments, provided they meet credit requirements at that time.
• Citizens Bank requires 36 consecutive on-time principal and interest payments before a borrower can apply for cosigner release, as stated in their loan terms.

For parents who want to help their child secure funding but wish to exit the obligation quickly, Sallie Mae’s 12-month policy is a significant advantage. For more details on protecting family credit, read our guide on how cosigner release works.

Loan amounts and coverage

One of the primary advantages of private student loans over federal Direct Loans is the ability to borrow significantly higher amounts. Both Sallie Mae and Citizens Bank allow students to borrow up to 100% of the school-certified cost of attendance.

The “cost of attendance” is determined by your university and includes tuition, mandatory fees, room and board, books, supplies, and an allowance for transportation and personal expenses. From this total, the school subtracts any other financial aid you have received (scholarships, grants, federal loans). The remaining balance is the maximum amount you can borrow privately.

Minimums and maximums:

• Sallie Mae: According to Sallie Mae, they typically have a minimum loan amount of $1,000. There is generally no aggregate loan limit, meaning your total borrowing across multiple years is capped only by the cost of attendance and your creditworthiness.
• Citizens Bank: As reported by Citizens Bank, they also usually require a minimum of $1,000. They may have aggregate limits for total student loan debt (often around $150,000 for undergraduates and higher for graduate degrees), depending on the borrower’s degree type and credit profile.

Repayment terms and in-school payment options

Choosing how you repay your loan is just as important as the interest rate. Both lenders offer flexibility, but understanding the trade-offs is essential for managing total debt.

Loan terms:
According to Citizens Bank, they typically offer terms of 5, 7, 10, and 15 years. Sallie Mae offers similar terms, generally 5, 10, and 15 years, though specific options can vary based on the loan type (e.g., medical school loans may have longer terms).

In-school payment options:
Both lenders allow you to choose how to handle payments while you are still a student. Making payments during school reduces the total cost of the loan significantly.

• Immediate repayment: You pay full principal and interest while in school. This saves the most money.
• Interest-only: You pay only the accruing interest each month. This prevents the balance from growing.
• Flat payment: You pay a small fixed amount (e.g., $25/month) to keep habits good and offset some interest.
• Deferred repayment: You make no payments until after graduation. Interest accrues and capitalizes (gets added to your principal), increasing your total debt.

Example: On a $20,000 loan with a 7% APR, deferring payments for 4 years could add over $5,000 to your balance before you even graduate. Choosing interest-only payments (approx. $116/month) would save you that $5,000 in capitalized interest.

Fees and additional costs

When comparing the cost of borrowing, it is important to look beyond the interest rate at the fee structures. According to StudentAid.gov, federal loans carry origination fees—over 4% for PLUS loans as of the 2024-2025 award year—which are deducted from the loan proceeds before they are sent to the school.

Origination fees: Both Sallie Mae and Citizens Bank charge $0 in origination fees as of May 2025. This means if you borrow $10,000, the full $10,000 goes to your school account. This is a distinct advantage over federal PLUS loans.

Late and returned payment fees:

• Late fees: Both lenders charge late fees if payments are missed. According to their loan agreements, this is typically 5% of the past due amount or a flat fee (e.g., $10-$25), depending on state laws.
• Returned payment fees: If a payment bounces due to insufficient funds, both lenders will charge a fee.

Prepayment penalties: Neither lender charges a penalty for paying off your loan early. Borrowers are encouraged to make extra payments whenever possible to reduce total interest costs.

Unique features and borrower benefits

Beyond rates and fees, Sallie Mae and Citizens Bank differentiate themselves through unique perks that cater to different borrower needs.

Sallie Mae’s perks:
Sallie Mae focuses heavily on the student experience. According to Sallie Mae, their loans often come with 4 months of free access to Chegg Study, a popular service for homework help and textbook solutions. Additionally, they provide free access to a scholarship search tool and internship/job search resources. These “soft benefits” can be valuable for undergraduates navigating their academic careers.

Citizens Bank’s perks:
Citizens Bank focuses on process efficiency and banking relationships.

• Multi-Year Approval: This is their standout feature. As reported by Citizens Bank, qualified borrowers can apply once and get approved for multiple years of funding. In subsequent years, you simply request the funds you need without undergoing another hard credit check or full application process. This protects your credit score and reduces stress.
• Loyalty discounts: According to Citizens Bank, existing customers with a qualifying checking or savings account may be eligible for an additional 0.25% rate discount (loyalty discount), which can be stacked with the 0.25% autopay discount for a total of 0.50% off.

If you are looking for a streamlined financial experience, Citizens offers a strong advantage. If you want academic support tools, Sallie Mae provides more value.

Loan types available

While both lenders cover the basics, the depth of their product lines varies. This section helps you verify if the specific loan you need is available.

Sallie Mae loan products:
According to Sallie Mae’s official website as of May 2025, they offer one of the most granular selections of specialized loans in the market:

• Undergraduate Smart Option Student Loan
• Graduate School Loan
• Parent Loan
• MBA Loan
• Medical School Loan
• Dental School Loan
• Health Professions Graduate Loan
• Law School Loan
• Bar Study Loan
• Medical Residency and Relocation Loan
• Career Training Loan (for trade schools and certificate programs)

Citizens Bank loan products:
As reported by Citizens Bank, they cover the major categories effectively but with fewer niche products:

• Undergraduate Student Loan
• Graduate Student Loan
• Parent Loan
• MBA Loan
• Law School Loan
• Medical School Loan

If you are pursuing a specialized path like a medical residency or a career training certificate, Sallie Mae is often the better (or only) choice between the two. For standard degree programs, both lenders are equally capable.

Application process and customer experience

The application experience sets the tone for your relationship with the lender. Both institutions offer modern, digital-first application processes that can be completed entirely online.

Prequalification:
Both Sallie Mae and Citizens Bank offer a prequalification tool. This allows you to check your estimated interest rate and eligibility with a soft credit inquiry, which does not impact your credit score. This transparency is vital for comparing options risk-free.

Speed and ease:
Sallie Mae is known for a rapid approval process, often providing credit decisions in minutes. Their specialized focus on student lending means their systems are optimized specifically for this workflow. Citizens Bank also offers a smooth digital application, and their Multi-Year Approval feature significantly improves the customer experience for returning students by eliminating the need to re-apply annually.

Both lenders offer mobile apps and online dashboards for managing payments. Customer service is available via phone and secure email, though user reviews for both lenders vary, as is common with large financial institutions.

Hardship and forbearance options

Financial difficulties can happen, and understanding what protections exist is a key part of responsible borrowing. It is important to remember that private student loans generally offer less flexibility than federal loans.

Forbearance:
Both lenders offer forbearance options if you encounter economic hardship, such as unemployment.

• Sallie Mae typically grants forbearance in 3-month increments, up to a total of 12 months over the life of the loan, according to their forbearance policies.
• Citizens Bank also offers academic and hardship forbearance, generally up to 12 months total, subject to approval.

During forbearance, interest continues to accrue, which will increase your total loan balance.

Discharge policies:
Both lenders offer loan discharge in the unfortunate event of the primary borrower’s death or total and permanent disability. This protection extends to the cosigner, meaning they will not be held responsible for the balance in these specific tragic circumstances.

Which lender is right for you

Choosing between Sallie Mae and Citizens Bank depends on your priorities, your educational path, and your financial profile.

Choose Sallie Mae if you:

• Need specialized funding: You are in a residency, bar study, or career training program that requires a niche loan product.
• Prioritize cosigner release: You want the option to release your cosigner after just 12 months (1 year) of on-time payments.
• Value academic perks: You would benefit from free access to Chegg Study and scholarship search tools.

Choose Citizens Bank if you:

• Want application convenience: The Multi-Year Approval feature saves time and protects your credit from repeated hard inquiries.
• Bank with Citizens: Existing customers can unlock loyalty rate discounts that make their loans cheaper than competitors.
• Have excellent credit: Citizens is known for offering highly competitive rates to borrowers with strong credit profiles.
• Plan to refinance later: Citizens offers a seamless path to student loan refinancing after graduation.

The best strategy:
Since both lenders offer free prequalification, the smartest move is to check your rates with both. If one lender offers a rate that is 1% lower than the other, that financial savings likely outweighs any specific borrower perk.

Frequently asked questions

While it is possible, it is difficult for most undergraduate students. Both lenders require a strong credit history and sufficient income to qualify alone. The vast majority of undergraduate borrowers on private loans utilize a creditworthy cosigner to get approved and secure competitive interest rates.

Rates vary daily based on market conditions and your individual credit profile. Generally, both lenders are very competitive. Citizens Bank may offer an edge for existing customers due to loyalty discounts, while Sallie Mae offers competitive rates across a wider variety of loan types. Prequalifying with both is the only way to know for sure.

Initial credit decisions are often available within minutes of submitting an online application for both lenders. However, the full process—including school certification (where your school verifies your enrollment and loan amount)—typically takes 2 to 4 weeks. It is best to apply at least a month before tuition is due.

Yes, but they use a “soft” credit check for prequalification, which does not affect your credit score. If you proceed to submit a formal application, both lenders will then perform a “hard” credit inquiry, which may temporarily lower your score by a few points.

Both Sallie Mae and Citizens Bank are reputable, top-tier lenders that provide reliable funding when federal aid falls short. Your choice should depend on whether you value the specialized flexibility of Sallie Mae or the streamlined, relationship-based benefits of Citizens Bank.

Key takeaways:

• Both lenders cover up to 100% of school-certified costs with no origination fees.
• Sallie Mae offers a faster path to cosigner release (12 months vs. 36 months).
• Citizens Bank offers Multi-Year Approval, allowing you to secure funding for your entire degree with one application.
• Prequalifying with both lenders is free, does not hurt your credit score, and allows you to compare personalized rates.
• Always exhaust federal student loans and scholarships before turning to private lenders.

Ready to find the best rate for your education? Compare rates from 8+ lenders to ensure you are getting the lowest possible cost for your loan.

References and resources

For further research and to verify current terms, consider visiting the following authoritative resources:

• Sallie Mae official website: For the most current rates, terms, and details on borrower perks like Chegg Study.
• Citizens Bank student loans: To review current loyalty discounts and Multi-Year Approval details.
• StudentAid.gov: The U.S. Department of Education’s official site for comparing federal loan options and limits.
• Consumer Financial Protection Bureau (CFPB): For unbiased information on student banking and borrower rights.