Private student loans can be a valuable tool when it comes to paying for college. They typically offer low interest rates for qualified borrowers, have flexible repayment terms, and some even offer extra features like career coaching and more.
However, private student loans are the last choice when it comes to paying for college. Before you take out private loans, you should make sure you exhaust all other financial aid options, including federal loans.
Before you sign on the dotted line, make sure you understand what you're getting into. Student loans are a collateral on your future earnings, and you need to ensure you have a positive ROI (return on investment) of your education.
To make things easier, we've put together a list of the best private student loans to help you pay for college. If you want a simple tool to shop around and compare loans, check out Credible, as they make comparing your student loan options easy. In just 2 minutes, you can see what you qualify for and if it makes financial sense. Check out Credible here.
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Check out our list of the best private student loan lenders below:
Note: The student loan offers that appear on this site are from companies from which The College Investor receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The College Investor does not include all student loan companies or all student loan offers available in the marketplace. As always, shop around and compare!
Ascent
Ascent Student Loans is a solid choice as a private lender - as they offer both cosigner and non-cosigner loans for undergraduate and graduate students. They also offer a solid loan amount range from $2,001 - $400,000, competitive rates, and easy repayment terms.
What we love about Ascent is how clear they make their requirements to get the non-cosigned loan for juniors and seniors that considers more than just a credit score, which is rare in the private student loan industry. The qualify, students must:
- Be a college junior or senior enrolled full-time (or with an expected graduation date within 9-months of the date the loan application is submitted) in a degree program at an eligible institution.
- Be a U.S. citizen or have a U.S. permanent resident or Deferred Action for Childhood Arrival (DACA) status.
- Have satisfactory academic performance of 2.9 GPA or greater.
They offer loans starting at just $2,001 minimum, and they offer loan deferment while in school up to 9 months after graduation.
Read our full Ascent Student Loans review here.
Ascent Student Loans Details | |
|---|---|
Product Name | Ascent Student Loan |
Min Loan Amount | $2,001 |
Max Loan Amount | $400,000 |
Variable APR | 4.72% - 13.73% APR |
Fixed APR | 4.62% - 15.66% APR |
Loan Terms | 5, 7, 10, 12 15, or 20 years |
Cosigner Required | No |
Citizens Bank
Citizens Bank offers one of the most robust private student loan programs on this list. They let you borrow as little a $1,000, and all the way up to $350,000 depending on your degree. I personally love that they base the amount you can borrow on your degree program because it does help you focus on your ROI (return on investment).
Citizens Bank offers both student and parent student loans, which can be a potential alternative to Parent PLUS Loans. Given that we recommend most borrowers refinance Parent PLUS Loans, you can potentially take advantage of lower interest rates and fees up front.
You may qualify for multi-year approval when you apply with Citizens Bank. And you'll also have the option to defer payments until after you graduate or make interest-only payments while you're in school. Parent borrowers must make at least interest-only payments while the student is in school.
Finally, Citizens Bank also doesn't charge any origination fees, application fees, and has no prepayment penalties.
Check out our full Citizens Bank review here.
Citizens Student Loans Details | |
|---|---|
Product Name | Citizens Student Loan |
Min Loan Amount | $1,000 |
Max Loan Amount | $350,000 (depending on degree) |
Variable APR | 3.99% - 14.86% APR |
Fixed APR | 5.99% - 12.85% APR |
Loan Terms | 5, 10, or 15 years |
Cosigner Required | Yes |
College Ave
College Ave offers some of the lowest rates on student loans on the market today. They are one of the largest private student loan lenders, and have highly competitive rates on their loans.
College Ave offers a variety of repayment terms, which are more flexible than other private student loan lenders. You can get loans for 5, 10, 15, or 20 years. You must borrow at least $1,000, but you can borrow up to the cost of attendance.
College Ave also offers the ability for student to defer payments until after graduation or make interest-only payments while you're in school.
Read our full College Ave review here.
College Ave Student Loans Details | |
|---|---|
Product Name | College Ave Student Loan |
Min Loan Amount | $1,000 |
Max Loan Amount | Cost of Attendance |
Variable APR | 3.24% - 14.86% APR |
Fixed APR | 3.99% - 14.96% APR |
Loan Terms | 5, 8, 10, or 15 years |
Cosigner Required | Yes |
Discover
Discover has been a solid private student loan option for the last few years. They offer both undergraduate and graduate private student loans, with competitive interest rates.
Their loan terms range from 5 to 20 years (15 years for undergraduates) and they offer a variety of ways to reduce your interest rate or even your loan balance!
Students who get good grades can earn a 1% cash back reward. Our favorite program is that they offer a 2% principal reduction after you graduate!
Check our out full Discover student loans review here.
Discover Student Loans Details | |
|---|---|
Product Name | Discover Student Loan |
Min Loan Amount | $1,000 |
Max Loan Amount | Cost of Attendance |
Variable APR | 4.74% - 13.99% APR |
Fixed APR | 5.49% - 14.99% APR |
Loan Terms | 5, 10, or 15 years (20 years for grad students) |
Cosigner Required | Yes |
Earnest
Earnest has traditionally been known for student loan refinancing, but they now offer fairly flexible private student loans as well.
They offer top notch rates and terms, and one of the most generous grace periods after graduation - at 9 months. They also don't charge fees for origination, disbursement, prepayment, or late payment.
The flexible terms continue with the option to skip a payment once every 12 months. And you can even put your loans in forbearance during an unpaid parental leave.
Check our out full Earnest student loans review here.
Earnest Student Loans Details | |
|---|---|
Product Name | Earnest Student Loan |
Min Loan Amount | $1,000 |
Max Loan Amount | Cost of Attendance |
Variable APR | 4.24% - 12.53% APR |
Fixed APR | 4.24% - 13.03% APR |
Loan Terms | 5, 7, 10, 12 or 15 years |
Cosigner Required | Yes |
ELFI
ELFI is one of the largest student loan originators, and as a result, they typically offer some of the lowest student loan rates available.
They offer extremely competitive rates, with standard loan terms and conditions. You can borrow from 5 to 15 years, and they can lend across the entire United States, including Puerto Rico.
The only major drawback is you must be enrolled in a bachelor's degree or more advanced education program.
Check our out full ELFI student loans review here.
ELFI Student Loans Details | |
|---|---|
Product Name | ELFI Student Loan |
Min Loan Amount | $1,000 |
Max Loan Amount | Cost of Attendance |
Variable APR | 2.69% - 11.79% APR |
Fixed APR | 3.21% - 11.99% APR |
Loan Terms | 5, 10, or 15 years |
Cosigner Required | Yes |
Funding U
Funding U is a new lender that makes the list because they focus on offering no cosigner private student loans. This is very rare - and so we wanted to include it.
To make it happen, they use alternative criteria to make loans possible.
However, they also have lower loan amounts and higher interest rates than other lenders. But if you're really looking for a non-cosigned student loan, this may be a good option.
Check our out full Funding U student loans review here.
Funding U Student Loans Details | |
|---|---|
Product Name | Funding U Student Loan |
Min Loan Amount | $3,001 |
Max Loan Amount | $15,000 Per School Year |
Variable APR | Not Offered |
Fixed APR | 7.49% - 12.99% APR |
Loan Terms | 10 years |
Cosigner Required | No |
LendKey
LendKey is another great lender that makes this list because they have great rates on their student loans and have a unique business model that allows them to do it. LendKey's loans are funded by credit unions and community banks - so you're getting a great loan, but it's handled by LendKey's online service. You never even realize that you have a private loan from a small bank.
LendKey doesn't have quite as much flexibility for borrowers during school. You can make interest-only payments or fixes $25 per month payments while in school (which is still pretty low but not quite as painless as full deferment). LendKey also doesn't offer loans to parents directly.
LendKey has no origination fees, application fees, and doesn't charge a prepayment penalty if you pay the loan off early.
Read our full LendKey review here.
LendKey Student Loans Details | |
|---|---|
Product Name | LendKey Student Loan |
Min Loan Amount | $1,000 |
Max Loan Amount | Cost of Attendance |
Variable APR | 4.36% - 10.24% APR |
Fixed APR | 3.99% - 10.32% APR |
Loan Terms | 5, 10, or 15 years |
Cosigner Required | Yes |
Sallie Mae
Sallie Mae is probably one of the most well-known lenders on this list. And while they don't have the best reputation, they're the largest private student loan lender. As a result, they also offer some of the most competitive private student loans and parent loans out there.
You can take out Sallie Mae student loans starting at just $1,000 (which is one of the lowest) and can borrow up to the total cost of education. Sallie Mae has over 8 different student loan options to choose from and a variety of repayment plans too. Plus, borrowers receive 4 free months of Chegg Study and quarterly FICO score updates.
Read our full Sallie Mae review here.
Sallie Mae Student Loans Details | |
|---|---|
Product Name | Sallie Mae Student Loan |
Min Loan Amount | $1,000 |
Max Loan Amount | Cost of Attendance |
Variable APR | 4.62% - 14.96% APR |
Fixed APR | 4.50% - 14.83% APR |
Loan Terms | 5 to 20 years |
Cosigner Required | Yes |
Stride Funding
Stride isn't a student loan, but rather an income-sharing agreement (ISA). This is an alternative to a student loan which has a lot of positives, as well as a few drawbacks.
Unlike a student loan, this loan has no interest rate. Instead, you agree to repay the amount you borrow based on your salary after graduation. You can repay over 2 to 10 years and you only pay on your agreement if you earn over $30,000 per year. If you make less, you pay nothing during that period of time.
The drawback is that you can only borrow between $2,500 and $25,000 per year ($50,000 aggregate) and only at select schools for select programs.
Read our full Stride Funding review here.
Stride Funding Income Share Agreement Details | |
|---|---|
Product Name | Stride ISA |
Min Loan Amount | $2,500 |
Max Loan Amount | $25,000 Per Year |
Income Share Percent | 6% to 9% |
Lifetime Max | 2x Borrowed Amount |
Term Length | 5 to 10 Years |
Cosigner Required | No |
How To Compare Private Student Loans
It can be hard to know when it makes sense to borrow a private student loan, and what features you should look for. All of the lenders on the list above are great, but each person has a different financial need, so it can be hard to know which is right.
When it comes to comparing private student loans, we recommend borrowers look at the following:
- Interest Rate: Getting the lowest interest rate possible is the key to paying the least amount of interest on your loan. Remember, the higher the rate, the more you pay over the life of the loan.
- Term: This is how long you'll repay the loan for. Always keep the shortest term possible. The longer the term, the more interest you'll pay.
- Origination Fees: Look for loans that have low or no origination fees. However, if you can get a lower interest rate by paying a small origination fee, you should consider it. The origination fee is one-time, but the interest rate is ongoing.
- Application Fees: You should look for private loans with no application fees.
- Prepayment Penalties: You should look for loans that don't make you pay a penalty for paying the loan off early.
- Cosigner Release: 90% of private student loans require a cosigner. You should find a student loan that allows you to release the cosigner in the least amount of time possible. The best we usually see is 24 months of on-time payments.
- Flexible Repayment Terms: You should look for lenders that allow you flexible repayment options - such as deferment during school, and variable lengths after graduation. This will help you should you need it after graduation.
Fixed Rate vs. Variable Rate
There are two main types of interest rates on student loans - fixed rates and variable rates. Variable rates are usually "sexy" in that they are lower than fixed rates...today. However, variable rates can rise in the future if interest rates go up (they can also go down, but that's very rare). Fixed rate loans charge the same interest rate over the life of the loan.
So, should you get a fixed rate or variable rate student loan? For most private loans, you should go for a fixed rate loan. The reason is, we are in a rising interest rate environment. Rates will only rise in the future since we're at historic lows today. You can see the best student loan rates here.
Given that you're still in school, you'll have several years before you make payments - during which time your rates could rise with a variable rate loan. So, while variable rates are attractive today, you might be regretting that decision in the future.
Now, if you're refinancing an existing student loan and know the timeline of your debt repayment, getting a variable rate loan is less risky. You can see the best places to refinance a student loan here.
Understanding Cosigner Release
It is near impossible to get a private student loan without a cosigner. In fact, 90% of all private student loans have a cosigner.
The reason? Because private student loans act much more like car loans or mortgages - you need to have income, a high credit score, and more to qualify.
For most college students, they simply don't have credit (yet), a high income (because they're students), or an employment history (once again, because they're students). That's why most banks require a cosigner.
However, banks and lenders have realized that cosigners don't like to be cosigners, and they want to get off the loans as soon as possible - that's where cosigner release comes into play.
Cosigner release is a program offered by lenders where, after a specific number of on-time payments, the cosigner can be removed from the loan. Many banks offer cosigner release after 24-36 on-time payments. This basically proves that the borrower is able to handle the student loan themselves, and they no longer need the protection of having a cosigner.
When getting a private student loan, look for loans that have short cosigner release programs. This will allow your cosigner to be removed faster, which is always an added benefit.
Important Considerations For Borrowers
Given that most private student loans require a cosigner, it's important that cosigners and borrowers know and understand what they are getting into. If the borrower can't pay the loan, the cosigner is fully responsible for the debt - and failure to pay could negatively harm both the borrower's and cosigner's credit.
Also, if something were to happen to the borrower (such as death or disability), the cosigner is typically 100% responsible for the loan.
That's why recommend that borrowers get term life insurance for the duration of the student loan - payable to the cosigner. The value of the policy should be the loan value plus interest. That way, if anything were to happen to the borrower, the cosigner is protected.
Check out Bestow to get a quick quote online in about 5 minutes. You'll see that life insurance for college students is typically very cheap - and this can be a great way to protect your family should something happen. You don't want to be responsible for your cosigners loans.
Private Loans vs. Income-Sharing Agreements
Income-sharing agreements are becoming popular alternatives to student loans as a way to pay for college. Income-sharing agreements are tools where you can get money for college in exchange for repaying a portion of your income after graduation.
There are limits to income-sharing - you typically have a minimum salary you need to achieve before you start repayment. Then, you only pay a certain percentage of your income, up to a certain amount. The goal is your repayment is based on how successful you are due to your education. You can find the Best ISAs here.
Learn more about income-sharing agreements here.
Common Private Student Loan Questions
Here are some common questions people ask when thinking about private student loans:
What's the difference between private and federal loans?
Private loans are offered by independent banks and lenders, whereas federal loans are offered by the Department of Education. Private loans are subject to traditional credit and income criteria, where federal loans are offered to all students regardless of income or credit.
Do private loans offer better interest rates?
Potentially. Your interest rate is determined by a number of factors, including credit history, income, cosigner, school, loan term, and more.
Do private loans offer loan forgiveness?
No, private loans do not offer loan forgiveness.
Do private loans offer deferment and forbearance?
Some private loans offer deferment and forbearance. It's important to shop around and compare lenders to see if they offer options such as deferment if you think you'll need to use it.
What repayment plan options are available for private loans?
Each private loan lender sets its own repayment options. Most only offer fixed repayment plans, but some lenders offer graduated or extended plans.
Final Thoughts
Getting a private student loan can be confusing. That's why we've listed the top 5 places to get a private student loan so that you can compare your options quickly and easily.
It can take upwards of a month or more to get the paperwork done and your loan funded. Make sure that you're giving yourself enough time to apply and get approved so that you don't miss any deadlines at your school.
Ascent Student Loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 12/1/2022 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.
Editor: Clint Proctor Reviewed by: Claire Tak