Most people view going to college as a huge investment for your future. It can help provide you with certain skill sets as you prepare for your career. Not to mention it can also help substantially increase your earning potential over the course of your working life.
However, college isn’t a cheap investment by any means. In fact, many different statistics show that the average cost of undergraduate attendance in the US was almost $21,000 for the 2018 school year. On top of this, US students collectively owe $1.56 trillion in student loan debt.
There are two main types of student loans available for most prospective students, which are federal and private loans. Even with only these two main types of loans, there are severely types of federal loans and repayment programs that can help borrowers save a sizable amount of money over the course of your loan repayment duration.
If you choose to go this route, be sure to compare many different offers to ensure that you’re getting the best possible deal on fees and APR. Below we have outlined a number of the best private student loan providers that can help you pay off your student loans faster and for considerably less than what it would be if you didn’t consolidate or refinance your loan amounts.
Best Private Student Loan Providers
Credible kicks off our list because it is a unique company since it doesn’t actually offer its users student loans. Rather, it works by getting various companies to compete for your business. Think of it as a one stop shop to comparison shop so you know that you’re getting the best deal.
You will fill out a single application form with Credible, and from there you can get up to eight different rates from a number of student loan providers at once. This can not only save you plenty of money down the road, but it can save time as well since Credible shops the market for you.
When you use Credible, you’ll get a number of personalized interest rates in minutes so that you can compare the best rates and options for you in real-time. You’ll get loan offers from plenty of different top rated lenders, such as SunTrust, Discover, and Sallie Mae among others. The online platform is also extremely user friendly, as you can see all of your real time offers on one dashboard so you’re not having to jump back and forth to do your research. You can also adjust your view easily by using their filters to narrow down your choices to see what best fits your situation.
2. Sallie Mae
If you’re planning on continuing your education as a part-time student, then Sallie Mae might be a great financing option for you. Not only do they offer loans to part-time students, but Sallie Mae offers amazing flexibility when it comes to repaying your loan down the road. What’s really rare is that you can start making payments while you’re still in school, which can reduce the overall amount of interest that you’ll end up having to pay. Most providers make you wait until you’re done with school, but if you can afford to start making payments before then, why wait?
Their current variable interest rate can fall anywhere from 1.25%-11.15% APR, and their current fixed interest rate falls in the range of 4.25%-12.35% APR. Where you fall in these ranges will depend on your credit worthiness as dictated by Sallie Mae. A few other perks that go along with borrowing from Sallie Mae can be free credit score tracking, as well as some free tutoring through Chegg.com, which can be a great help in some courses that you find difficult.
3. College Ave
College Ave is an online lender that has made their name as the lender that offers customizable student loans to their borrowers. They offer plenty of tools to help you create and design a loan that works best for you. You can see what you qualify for, what rates you get for different durations, and other great things you want to view all without having to do a hard credit check. So you can customize a plan for you without it impacting your credit scores.
College Ave has current variable rates anywhere from 1.24%-11.98% APR, and fixed rates at 3.99%-12.99% APR. Their loans can cover 100% of the school certified costs of attendance minus any other financial aid you might already be getting. College Ave also offers a few ways to repay your loans which can help you pay back your loan sooner and at a reduced cost.
Commonbond is one of the original online lenders to offer private student loans. Their platform has continuously offered relatively competitive interest rates, but what’s even more great is their excellent repayment options that they provide. Commonbond currently has variable rates anywhere from 5.76%-9.42% APR, and fixed rates from 6.33%-10.74% APR. They also offer up to 24 months of forbearance over the life of the loan, which can be great if you run into a difficult time and are strapped for cash.
CommonBond also can cover 100% of the cost of attendance up to $500,000, which is more than enough for most people. The company also has a social promise to cover the cost of a child’s education in a developing country for every loan that they fund, which is a great mission that anyone can support.
LendKey is a loan service specifically for private loans. LendKey works to connect you with post-secondary funding that include loan offers that offer extended forbearance for longer term loans.
LendKey has private student loans with variable rates from 2.99%-7.77% APY and fixed rates 4.99%-8.49%. The loan amount you might qualify for will depend on the end lender. A neat thing that LendKey does is connect you with community lenders who can potentially refinance your loans and lower your overall interest rate, which can save you thousands if you do it right. In regard to their forbearance policy, they over 18 months’ worth of forbearance for 15 and 20 year loans, which is longer than what’s offered by many other providers.
Ascent is another loan provider that offers competitive rates, but what makes Ascent stands out is that they offer 1% cashback offer which you can secure upon graduation if you set up automatic payments for once you begin to pay back your loans.
Ascent offers competitive interest rates, with variable rates at 2.72%-13% APR and fixed rates at 3.53%-14.50% APR. Ascent will also cover up to100% of your costs of attendance minus any financial aid you might already have, up to a $200,000 aggregate limit. A small perk as you get started is that Ascent has no application fees, and they offer flexible repayment options that also have in-school repayment options. Ascent also offers up to 24 months of forbearance, which is longer than other lenders.
Social Finance’s – or SoFi’s – main product that they’re known for is student loan refinancing. However, they do offer some excellent unsecured private student loan options as well. Back in 2012, SoFi became the first company to refinance both private and federal student loans together, which really pioneered the way for student loan repayments today.
The company has grown over the years into an extremely well-known student loan company that is on the market. According to Forbes, SoFi has a 98% referral rate for new customers among their existing customers. They currently offer variable rates from 1.90%-11.66% APR, and fixed rates at 4.23%-11.76% APR. Their loans can cover the full cost of attendance, and they offer flexible repayment options that allow borrowers to start repaying as soon as you start your first semester.
SoFi also doesn’t require a hard credit check to see what you qualify for and at what rates. They only do a hard pull when you officially apply. SoFi also offers perks for when you’re done with school, offering job search, career planning, and other types of support for people just entering the workforce.
Earnest is an online lending company that prides itself on being a loan provider that brings “low interest loans to high potential people” as the company claims. The company does offer some competitive rates. But like SoFi, you’ll need to meet their potential high-income requirements in order to qualify for the best rates they offer.
Their current variable rate goes from 1.49%-11.69% APR, and the current fixed rate goes from 4.20%-13.03% APR. Earnest also covers up to 100% of your school certified cost of attendance, and they offer a nine-month grace period once you graduate before you need to start paying them back, which is longer than most places. You can also skip a payment once a year in the event that an unexpected event happens.
Discover has typically been known for their wide range of credit cards, but they do offer a great selection of student refinancing options with great rates too. The company offers various types of student loans, including undergraduate, graduate, MBA, law, and dental loans. Their variable rates go from 1.24%-10.99% APR, and their fixed rates go from 4.24%-12.39% APR. Like most lenders, Discover can cover 100% of your cost of attendance. Discover also offers rewards for good grades. If your GPA is 3.0 or better, you can get a 1% cash reward on each new Discover student loan that you take out.
10. Citizens Bank
Citizens Bank as a company has been around since 1828 but is now trying to earn a spot in the student loan market. Citizen Bank offers several fixed and variable rate private student loans and parent loans, with their variable rates ranging from 1.24%-10.56% APR and their fixed rate ranging from 4.25%-11.04% APR. Their loan amounts cover up to 150,000% for undergraduate loans, and you can also access your credit score with no additional charge.
11. Custom Choice
Custom Choice Loans used to be offered to borrowers as part of a partnership between SunTrust Bank and Cognition Financial, but when SunTrust ended its student loan program, Cognition Financial found a new partner in Citizens bank to offer new loans starting in July of 2020. Custom Choice Loans are truthfully the best for an upperclassman who is confident they can take advantage of the Grad Reward, where borrowers received a 2% principal reduction when they can prove that they have graduated.
Custom Choice also doesn’t have any late payment fees and offers a grace period that can be extended up to six months. The only real downside is that if you’re enrolled less than half time, Custom Choice doesn’t offer you a loan, as they are trying to focus primarily on full-time students as a company.
12. Advantage Education
Advantage Education Loans are a product of the nonprofit Kentucky Higher Education Student Loan Corp. Their fixed loans feature interest rates and have borrower friendly features like no late payment fees, rehabilitation for defaulted loans, and up to 24 months of deferment if you face some challenging times such as losing your job.
You can even qualify for the Advantage Refinance Loan if you didn’t finish your degree. There are also no restrictions on their education programs, so in addition to typical degree programs you can refinance student loans used for certificate or diploma programs. So even if you’re going to school for a nontraditional education path, Advantage Education can help you achieve your goal. It is worth noting that your maximum loan amount will depend on your credit and your debt-to-income ratio.
What To Look For In A Private Student Loan
When you’re searching for a private student loan, there are a few main things to look for. The first thing is the APR amount. If you are offered a fixed rate APR, the interest rate stays consistent over the course of the loan. If you’re offered a variable rate, it will likely start lower, but can change and get higher as you repay it back to the lender.
You will also want to look at any fees that the loan or lender might charge, such as an application fee. Most of the top-rated student loans lenders won’t, so you should keep that in mind when reviewing the many options. You should also check what credit scores are needed, as private student loans often require good credit if you’re applying without a cosigner.
Another big thing to keep in mind is looking at the different repayment options that are offered. You should see if you qualify for a student loan with a lender who offers more flexible repayment options. It’s always best to try and find the most flexible options that best suit your needs, so the repayment options offered should always be taken into account in your decision.
One final thing to look for would be any additional perks a lender might offer. Things like cashback or additional support when it comes to job searching once you graduate are getting more and more common, so make sure to look for these benefits!
Is A Private Student Loan Right For You?
The big question you should always ask yourself before you ever apply is if a private student loan is right for you, which is going to depend on a few different factors. A private loan can be a great way to fund your education, especially if you can’t pay directly out of pocket like most people. These loans can help, but you should make sure you aren’t paying more due to a higher APR than others that are on the market. You can usually borrow more with private lenders compared to federal loans, so using a private loan can be great. You can also do so with higher borrowing limits as well.
The other big question you should ask yourself if you’re planning on taking out a private student loan is that if you’ll be able to pay it back once you’ve graduated. Before you take out any student loan, make sure you do a return on investment calculation to make sure your income will be enough to pay the minimum amounts while being able to pay for other necessities as well. The key is to only borrow what you’ll be able to pay back. To get a better understanding of what the amount might be for you, do some homework to see what the estimated salaries are for the occupation that you’re looking to get once you’ve gotten your degree.
You should also keep in mind that many private student loan lenders offer interest rates depending on your creditworthiness. If you’re looking to take out a private student loan, you will want to have a good credit score, unless you have a cosigner who can help balance out our credit if you’re still building it up.
Will You Get A Private Student Loan?
If you don’t have the best credit and can’t find a good cosigner, then private student loan options may charge you a higher interest rate compared to federal borrowing options. These private loans will provide fewer repayment options if your credit isn’t that great and could provide less opportunities for any type of forgiveness down the road.
While private student loans might not be the most preferable form of borrowing, they can be a useful tool to help you finish your higher education and secure a higher income over the course of your career. If you’re able to handle your loans responsibly, the right student loans can help you achieve your academic goals and prepare you for a successful career in the field of your choice.