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6 Best Private Student Loans Available

Private student loans for college are worth considering if federal financial aid isn’t enough to cover your tuition and other costs. But before you sign anything, it’s wise to shop around for the best private student loans.

To start your search, consider these six options — they’re our favorites, based on rates and features outlined below:

Read on to learn more about each of these lenders and how to choose the right lender for your college loans.

6 best private student loans

Here’s our list, in no particular order, of some of the best private student loans offered by the top lenders. To compile it, we looked for established lenders offering the best student loan rates and additional benefits, which are detailed below.

Each of these reputable lenders offers the ability to view your potential rate while only submitting to a soft credit check that won’t ding your credit report. Of course, there are other great choices out there, but think of our list as a jumping-off point as you start your research.

And whether you go with one of these or find another student loan lender that’s a better fit for you, make sure to shop around so you can get the best deal available for your situation.

1. College Ave

Overview: This online-only lender, which was founded by former Sallie Mae executives, distinguishes itself with increased flexibility. Borrowers can expect greater in-school and post-school repayment options than what’s found elsewhere. Also, students and parents alike will appreciate perks, such as no fees and low rates, in spite of the slow path to cosigner release available at College Ave.

Details:

  • Fixed rates from 3.34% to 12.99% and variable rates from 1.04% to 11.98%.
  • Loans from $1,000 up to 100% of the school-certified cost of attendance.
  • Student and parent loan options.
  • Available to undergraduate and graduate students.
  • Accessible for international students with a valid Social Security number (SSN) who apply with a U.S. citizen or permanent resident cosigner.

What to like:

  • No application, origination or prepayment fees.
  • Interest-rate reduction if you set up automatic payments with College Ave.
  • Student repayment options of 5, 8, 10 or 15 years.
  • Option for students to make full, interest-only or flat payments while in school or to defer payments until after graduation.
  • Parent repayment options of 5 to 15 years.
  • Option for parents to make full, interest-only or interest-plus payments while their student is in school.
  • Up to $2,500 can be deposited into a parent’s bank account to pay for student’s education costs.

What to keep in mind:

  • Students are required to apply with a cosigner — with the minimum credit score requirement set at 640.
  • Potential qualification for cosigner release isn’t available until more than half the scheduled repayment period has elapsed.
  • Repayment protections like forbearance aren’t clearly defined.

Visit College Ave

2. Sallie Mae

Overview: With a best-in-class cosigner release policy, Sallie Mae could be your top choice. The longest-running lender of the bunch, it also offers no fees, low rates and unique perks like study support and credit score tracking, all free of charge. One drawback is the borrower’s inability to select the length of their repayment term.

Details:

  • Fixed rates from 4.25% to 12.59% and variable rates from 1.25% to 11.35%.
  • Loans from $1,000 up to 100% of the school-certified cost of attendance.
  • Available to undergraduate and graduate students — even part-timers — as well as parents borrowing on behalf of students.
  • Available for private K-12 education, career training certificate courses, dental and medical school and/or residencies, other health profession loans, MBA loans and bar study fees.

What to like:

  • No origination fee or prepayment penalty.
  • Interest-rate reduction if you set up monthly payments by automatic debit with Sallie Mae.
  • Three repayment options to choose from: deferred, fixed or interest-only while you’re in school and during your grace period.
  • Borrowers and cosigners receive free credit score tracking from FICO.
  • Borrowers receive free tutoring for school or study resources through Chegg.
  • Borrowers can apply for cosigner release after graduation and when 12 on-time principal and interest payments have been made (without having used hardship forbearance or a modified repayment plan during that time).
  • Pause your loan repayment for up to 12 months using forbearance.

What to keep in mind:

  • Repayment terms of 5 to 15 years are available — but you can’t choose your specific term.

Visit SallieMae

3. Discover

Overview: Discover stands out, partly for its repayment flexibility. Enrolled students can either defer or begin repaying their loan right away, while graduates might qualify to postpone payments if necessary. The lender is also a top choice for private loan borrowers who don’t have a valid SSN but do have a U.S. citizen or permanent resident cosigner — it offers lower interest rates than does MPOWER Financing, another option for non-citizen students. Drawbacks could include Discover’s lone 15-year repayment term option and its lack of a cosigner release policy.

Details:

  • Fixed rates from 4.24% to 12.99%¹ and variable rates from 1.24% to 11.99%¹.
  • Loans from $1,000 to 100% of the school-certified cost of attendance.
  • Available for undergraduate, graduate, law school and MBA students as well as students seeking a professional degree or in residency.
  • International students applying with a U.S. citizen or permanent resident cosigner are also eligible to borrow — even if they don’t have a valid SSN.

Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.

What to like:

  • No application, origination, prepayment or late payment fees.
  • Interest-rate reduction if you set up monthly payments by automatic debit.
  • Prequalify for future loans using the bank’s multiyear borrowing option.
  • Four repayment options to choose from while you’re in school and during your grace period: deferred, fixed, interest-only or full payments.
  • Defer your repayment for six months after leaving school and for up to three years while on active military duty or working in public service or health care residency program.
  • Postpone payments for up to 12 months via forbearance.
  • Receive a one-time cash award for getting a 3.0 GPA or higher, plus a 2% rebate on your loan amount upon graduation².

What to keep in mind:

  • Repayment term of 15 years — you don’t get to choose a term, like with other lenders.
  • Borrowers can apply with a cosigner, but a cosigner release is not offered.

Visit Discover

¹ Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants and include an interest-only repayment discount and Auto Debit Reward. The interest rate ranges represent the lowest and highest interest rates offered on undergraduate Discover student loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of January 1, 2021. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Our lowest APR is only available to customers with the best credit and other factors. Your APR will be determined after you apply. It will be based on your credit history, which repayment option you choose and other factors, including your cosigner’s credit history (if applicable). Learn more about Discover Student Loans interest rates.

² Students who get at least a 3.0 GPA (or equivalent) qualify for a one-time cash reward on each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Reward for any applicable reward terms and conditions.

4. SoFi

Overview: SoFi is better known for student loan refinancing, but like Earnest, it launched a private student loan offering in 2019. You could prequalify and check your rate within minutes without affecting your credit. SoFi’s no-fee loans are worth considering, but be aware that half-time enrollment status is an eligibility factor.

Details:

  • Fixed rates from 4.23% to 11.26% and variable rates from 1.88% to 11.66%.
  • Loans from $5,000 up to 100% of the school-certified cost of attendance.
  • Available to undergraduate students, as well as graduate students pursuing a law, business or other eligible degrees — and parent borrowers.
  • Accessible to non-citizen students who apply with a qualified cosigner.

What to like:

  • No origination, disbursement, prepayment or late payment fees.
  • Interest-rate reduction (0.25%) if you set up monthly payments by automatic debit, plus an additional discount (0.125%) if you or your cosigner are already a SoFi member.
  • Repayment terms of 5, 10 or 15 years.
  • Four repayment options to choose from while you’re in school and during your grace period: deferred, fixed, interest-only or full payments.
  • Borrowers who lose their job while in repayment could qualify for up to 12 months of forbearance, awarded in three-month spans.
  • SoFi members are also eligible to benefit from the company’s other services, including career coaching and wealth management.

What to keep in mind:

  • Cosigner release is only available after making two years’ worth of on-time payments.

Visit SoFi

5. Earnest

Overview: This student loan refinance company began offering some of the best private student loan options in April 2019, and it’s a competitive lender for undergraduate and postgraduate students alike. Unlike most lenders, Earnest considers additional criteria, including savings history and career trajectory, when determining your interest rate. On the downside, if you need to apply with a cosigner to be eligible or to lower your rate, the online-only lender doesn’t offer a path to cosigner release.

Details:

  • Fixed rates from 3.49% to 12.78% and variable rates from 1.05% to 11.44%.
  • Loans from $1,000 up to 100% of the school-certified cost of attendance.
  • Available to undergraduates and to graduate students pursuing a law, medical, business or other eligible degrees.
  • Accessible to non-citizen students who have a valid SSN and a creditworthy cosigner.

What to like:

  • No origination, disbursement, prepayment or late payment fees.
  • A 0.25% interest-rate reduction if you set up monthly payments via automatic debit.
  • Repayment terms of five, seven, 10, 12 or 15 years.
  • Four repayment options to choose from while you’re in school and during your grace period: deferred, fixed, interest-only or full payments.
  • Borrowers receive a nine-month grace period before entering repayment.
  • Borrowers can skip a payment once per year (although this comes at the cost of interest accruing).
  • Deferment available for borrowers in the military.

What to keep in mind:

  • You may not get to choose from all of the five repayment term possibilities, depending on your application.
  • Cosigners on undergraduate loans must have an income of at least $35,000 and a credit score above 650, and they can’t be released from the loan.
  • Loans not available in Nevada.

Visit Earnest

6. Ascent

Overview: If you have trouble finding a cosigner during your search for the best private student loans, don’t forget to include Ascent among your lender considerations. The online company makes independent loans available to certain students (more on the criteria below) and at the same interest rates offered to borrowers who do apply with a guarantor. Ascent also borrows a couple of features from federal loans that you may or may not appreciate, including entrance counseling and a graduated repayment option that would see your monthly dues gradually increase over time.

Details:

  • Fixed rates from 3.39% to 14.50% and variable rates from 2.46% to 12.98%.
  • Loans from $1,000 up to 100% of your school’s cost of attendance with an aggregate maximum of $200,000.
  • Available to undergraduate and graduate students enrolled at least half-time.
  • Accessible to DACA students and other non-citizen students who apply with a U.S. citizen or permanent resident cosigner.

What to like:

  • No application fee or prepayment penalty.
  • Interest-rate reduction (0.25%) if you automate your monthly payments.
  • Repayment terms of 5, 7, 10, 12, or 15 years — with a graduated repayment plan available upon leaving school.
  • Three in-school repayment options for qualifying borrowers: deferred payment, fixed $25 payments and interest-only payments.
  • Expansive deferment and forbearance options in cases of returning to school, serving in the military, working a residency or internship and experiencing hardship.
  • Receive a 1% cashback bonus upon graduation.
  • Earn a $525 referral bonus when your peer borrows from Ascent.

What to keep in mind:

  • To qualify for the non-cosigned loan, you must:
    • Be a U.S. citizen or permanent resident.
    • Be an upperclassmen or graduate student.
    • Have a 2.9 or better GPA.
    • Have two or more years of credit history and meet the minimum credit score of 680 or have a previous year income of at least $24,000 with a satisfactory debt-to-income ratio.
  • Not all schools are eligible for Ascent loans.
  • Borrowers and cosigners are required to take a federal loan-like “financial wellness” course as part of the application process.
  • Two years of timely and full payments are required to release your cosigner (if one is attached to your loan agreement).

Visit Ascent

What stands out among the best student loans

A variety of factors differentiate the best private student loans. The main ones to focus on are interest rates and fees.

The amount of money you take out on your private school loans is only the beginning. Give yourself the best chance of maintaining a manageable level of debt by keeping your rates and fees as low as possible.

As you review different interest rates, remember that you can apply for more than one loan to see which one will give you your best deal. There are two ways you can do so without your credit score taking a hit:

  1. Many private student loan lenders do a soft pull on your credit, which enables you to see what you might be approved for without negatively impacting your credit score.
  2. If you were to file a formal application with more than one lender, you could avoid dinging your credit by rate shopping within a two-week window.

Besides looking for offers for the best private loans for college, also look for beneficial perks. For example, some lenders offer college students a lower rate for good grades. Others provide the ability to release your cosigner.

Once you’ve narrowed down your list of options, use a monthly payment calculator to estimate what your regular dues might be.

Best private student loans for your situation

If you peruse a list of the best private student loans that’s general in nature, you could miss out on lenders that cater specifically to your needs. Different lenders serve students attending certain types of schools, for example, or pursuing specialized degrees.

To check out the banks, credit unions and online companies that we think are best for your situation, click away here:

Is a private student loan right for you?

When you consider whether a private lender is right for you, remember that even the best private student loans for college don’t come with the same protections as federal loans.

Federal student loans offer income-driven repayment plans, deferment and forbearance, as well as forgiveness program options. Some private school loans do offer hardship options in case your income hits a snag, but not all have this.

Also, private loans for college — much like federal direct unsubsidized loans — start accruing interest immediately. This contrasts with subsidized federal student loans, for which the Department of Education will pay the interest until you graduate and during any deferment.

Keep in mind, too, that you’ll likely need a cosigner. That’s because private student loan offers are based on your creditworthiness, and most college students are too young to have much of a credit history.

If you do get a loan with a cosigner, make sure all your payments are on time. If not, your cosigner will be responsible — and missing payments or going into default can damage their credit as well as yours.

If you see tough financial times ahead, reach out to your lender immediately to find out if you can adjust your repayment plan. It doesn’t hurt to ask. Plus, the sooner you handle the situation, the better your chances of a good outcome.

Like all financial tools, private loans for college can be a lifesaver if you use them wisely. They are best used as a backup when you can’t get enough federal student loans to cover your tuition and other education costs. In that case, private student loans can be a great way to finish off the funding for your education.

Private student loan FAQs

Here are few more things you might be wondering about borrowing and repaying private student loans…

How do private student loans work?

For private student loans, you typically shop around with banks, credit unions and online lenders to find the best overall loan offer for you. Unlike federal loans, private loans are credit-based, meaning that your eligibility and terms depend on your credit history. If you’re a student with a thin or poor credit file, you could improve your application by adding a creditworthy cosigner.

Once you’ve gained approval, your lender will certify the funding amount with the college or university you’re attending. You may be allowed to borrow up to 100% of your cost of attendance, minus other financial aid. The funds are usually disbursed directly to the school, with any leftover amount credited to you later.

Your private lender may have a loan servicer that manages the repayment of your debt. Keep in mind that private loans have few safeguards if you run into trouble after leaving school, so they’re often used as a supplement for federal loans, rather than as a substitute.

Who qualifies for a private student loan?

Creditworthy students, including undergraduates, graduate and professional students — as well as their parents or legal guardians — can qualify for private student loans. To be eligible, the primary borrower or their cosigner must meet lenders’ underwriting criteria. Besides your credit history, credit score and debt-to-income ratios, lenders may also set requirements related to your age, school and citizenship.

Fortunately, many lenders cater to nontraditional applicants, such as those who can’t find a cosigner, attend school part-time or aren’t permanent U.S. residents, among other cases. The most reputable lenders also allow you to prequalify to check your eligibility and rates before submitting a formal application and undergoing a credit check.

Can you negotiate a lower rate on private student loans?

The rate you’re awarded on private student loans depends on the creditworthiness of you or your cosigner, if you have one. To score the lowest advertised rates, you or your cosigner may need an excellent credit score (starting around 700), though a merely “good” score (about 600 or higher) should at least help you qualify.

Lenders typically rely on their underwriting process to determine each borrower’s interest rate, so negotiation isn’t usually possible. With that said, you could lower your awarded interest rate by opting for a variable rate over a fixed rate or by scoring rate discounts for enrolling in autopay or making a certain number of consecutive payments. Rate reductions are also achievable through academic performance, or by graduating or opening a bank account with the same lender.

Can private student loans be forgiven?

Unlike with federal loans, there are no national private loan forgiveness programs. However, there are dozens of local loan repayment assistance programs available for private education debt. These programs are available to borrowers depending on their location and occupation.

In some cases, local governments, organizations or employers promise to cover a portion — or even the entirety — of your loan balance in exchange for your employment in an underserved field or geographical area. Check out our database of 120-plus loan repayment assistance programs to see if any could be a fit for your situation.

Can you transfer private student loans to federal ones?

No, private student loans can’t be transferred to the federal government. Private loans are owned by your lender, unless they’re sold to another loan servicer or you elect to refinance them with a different private financial institution.

If you have one private student loan and three federal loans, for example, the only way to combine all four would be through student loan refinancing. However, refinancing would strip those federal loans of their government-exclusive protections, so refinancing may not be the right move for every borrower.

Andrew Pentis contributed to this report.

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