How we chose the best private student loans
Since 2014, LendEDU has been reviewing private student loan lenders to determine the best in the industry. Our most recent evaluation consisted of 12 of our partners, including several of the largest in market share.
Here are the seven categories that we reviewed to score each lender:
Interest rates: The rate on your loan is the most significant indicator of how much your loan will cost over time. We valued lenders that offered low rates and discounts.
Repayment: Most borrowers will spend years repaying their student loans, and because of this, offering flexible repayment options was an important factor in our evaluation. Lenders that had borrower-friendly terms scored the highest.
Loan amount: When you take out a student loan, you want to make sure that the loan can cover all your expenses. Lenders that cover up to the total cost of education were scored highest. Important note: You should only take out what you need. Small student loans are available to avoid borrowing more than you need.
Cosigner benefits: Most estimates have over 90% of new private student loans including a cosigner. Lenders that allowed cosigners to be released from the loan were valued above those that didn't.
Fees: No private lender charging origination, application, or prepayment fees is eligible to be featured on this page. However, there are other fees that lenders may charge, such as late payment fees. The fewer fees charged by a lender, the better they scored.
Better Business Bureau (BBB) rating: The BBB rates businesses between an A+ and F on how likely it is to interact with its customers. For student loan borrowers who will likely have a question or two during the life of their loan, this is a valuable rating to reference. The higher the rating a lender received, the better they scored.
Benefits: To stand out amongst their competitors, most student loan lenders offer unique benefits and rewards. These benefits can include a free subscription, a graduation reward, unemployment assistance, and more. Lenders that provided benefits that helped borrowers better control the cost of their loan were scored highest.
Once we scored each lender, we then determined who was the best for different situations. If a lender wasn't the best for anything, or they didn't allow borrowers to choose between in-school or deferred payments, they were not included on this page.
Is a private student loan a good option for you?
Federal student loans are limited to a certain amount each year of undergraduate study. If you need to borrow more, your options might include federal Parent PLUS loans, private student loans, and some states have loan programs for residents or students in the state.
With all loans, you should understand your budget once you graduate. Once you pay for your basic necessities such as housing, food, and transportation, you should have enough left over to pay the monthly student loan payments from your expected starting salary. If it looks like this will be a problem, more student debt may not be the answer to pay for your college expenses.
Be sure you and your family compare all the costs and repayment options for the various student loan choices.
How to decide which private student loan is the best for you
While our evaluation of our private student loan partners was created as a starting point for students and their families to find the best private student loan, we recommend you do your own research as well.
When looking for a private student loan, comparing your options is the most important thing you can do. By doing this, you’ll be able to find an affordable loan that comes with borrower-friendly repayment terms. Here are the steps we recommend taking to find the best private student loan:
Compile a list of student loan lenders that you're interested in. Ideally, you’ll want to choose between reputable companies that have demonstrated an ability to support borrowers during repayment.
Review the eligibility requirements for each lender. All private lenders have their own unique eligibility requirements. Make sure you're eligible with a lender before applying to limit unnecessary hard credit checks. Remember, we recommend adding a cosigner to your loan to improve your chances of approval, but that cosigner is on the hook to pay back your loan if you are unable to. If you and your cosigner don't meet the eligibility requirements, you should remove that lender from consideration.
Review the loan terms. Make sure you understand what happens if you were to die or become disabled during the loan term. The lenders in our reviews all allow loan discharge for death or disability, but not all lenders have this feature. If you borrow from a lender that doesn’t allow for forgiveness due to death or disability, students should consider inexpensive life insurance to protect their cosigners. Although private student lenders do not have the same income-driven repayment plans as federal student loans, they might have forbearance programs if you lose your job during the repayment period. It can be helpful to understand those programs up-front.
Get quotes from the lenders you're eligible with. While most lenders display an interest rate range on their website, the only way to know the rate you'll receive is by prequalifying or submitting a complete application. Make sure to utilize soft credit checks when possible to reduce the total number of hard credit inquiries on your credit report.
Compare your quotes. Once you’ve received a rate estimate from each lender, compare your offers to see which lender offers you the lowest rate. Make sure to consider other factors like the repayment term, borrower protections, and unique benefits as well.
Choose a lender. The lender you borrow from should offer you the most affordable loan, with borrower protections that help you in times of need during repayment. Once you select a lender, you can submit your application and wait for the lender to inform you of your next steps.
Private student loan FAQ
How do private student loans work?
Private student loans are a form of financial aid that students can use to cover the cost of their education. These loans are offered by banks, credit unions, and online lenders.
You’ll need to apply for a loan directly with a lender and meet certain eligibility requirements to be approved. If you can’t meet the eligibility requirements alone, you’ll need to add a creditworthy cosigner who can.
Most lenders allow you to borrow up to the total cost of attendance, minus any other financial aid you receive. Once your loan amount is finalized, the funds will be disbursed to your school to cover tuition and other expenses. Any remaining funds will be sent directly to you to use as needed.
When you start repaying your loan will depend on which in-school repayment plan you select. Your options include making full, interest-only, fixed, or deferred payments. If you choose full, interest-only, or fixed payments, you'll start making payments while attending school. If you defer your payments until after you graduate, repayment won't begin until your grace period is over. After your grace period, you’ll start making full payments for the duration of your loan term, typically from five to 20 years.
>> Read More: Pros and cons of private student loans
What are the eligibility requirements for a private student loan?
Each lender has its own eligibility requirements. Generally, you'll need to be a U.S. citizen or permanent resident, have good credit, attend a Title IV school at least half-time, and meet an income threshold.
If you can't meet those requirements independently, you'll likely need to add a cosigner to your loan application. Make sure your cosigner understands the risks of being added to the loan. If you’re unable to make your monthly payments, your cosigner will be responsible for continuing to pay back the loan.
If you can't meet the eligibility requirements and don't have a cosigner to add to your loan, there are student loan lenders that student loans without a cosigner and student loans for international students.
>> Read More: Private student loan eligibility requirements
How do student loan interest rates work?
Your interest rate is arguably the most important part of your student loan. For private loans, the interest rate you receive will depend on you or your cosigner’s credit and income, amongst other factors. If you have an excellent credit score and steady income, you are more likely to receive a lower interest rate.
Private student loans also come with either a fixed or variable interest rate. If you choose a fixed rate, your rate will remain the same for the duration of your loan. If you choose a variable rate, your rate will change throughout your loan term and increase or decrease depending on economic conditions.
With private student loans, interest accrues while you attend school. This means that your balance will be larger than your original loan amount when you begin repayment under a deferred repayment plan. However, lenders typically allow you to save on interest by selecting an in-school repayment plan where you make partial payments while still attending school.
>> Read More: Student loan interest rates
Do private student loans have fees?
Private student loans can come with fees; however, none of the lenders listed above charge an origination, application, or prepayment fee. We take this stance because we don't believe borrowers should be charged for taking out a loan or paying one off early.
That being said, let’s look at the different types of fees typically discussed with student loans.
Origination fee: This fee is charged when you take out a loan. It's usually calculated as a percentage of the total loan amount. For example, if you have a $10,000 loan with a 5% origination fee, the fee would come to $500. While federal student loans do come with an origination fee, none of the lenders in our list above charge one.
Application fee: This fee is charged to you when you fill out and submit an application for a loan. Like the origination fee, none of the lenders selected above charge this fee.
Late payment fee: This fee is charged to you if you don't make a payment on time. A lender may set this as a flat amount (e.g., $25) or a percentage of the missed payment (e.g., 5%). Some of the lenders in our list do charge this fee, so we recommend putting together a repayment plan that can help you ensure you stay on schedule with payments.
Prepayment fee: This fee is charged if you pay off your loan early. None of the lenders listed above charge this fee.
How do private student loans differ from federal student loans?
Federal student loans are offered by the Department of Education and require you to fill out the Free Application for Federal Student Aid (FAFSA) to determine eligibility. Federal student loans should always be considered before borrowing private student loans due to lower rates and friendlier repayment benefits, such as income-driven repayment plans and forgiveness programs.
Unfortunately, federal student loans come with borrowing limits that can limit students’ ability to cover their entire cost of attendance. Because of this, many turn to private student loans to bridge the gap.
Private student loans are offered by banks, credit unions, and online lenders. These loans typically allow you to borrow up to the total cost of attendance. Unlike federal student loans, you can’t fill out one application to determine your eligibility for all private student loans. Each lender sets its own eligibility requirements, typically including income and credit minimums.
Whether you borrow from the government or a private lender, always understand if your after-graduation budget will allow you to pay back your student loans before deciding to use them for your education.
>> Read More: Federal vs. private student loans
Recap of the best private student loan companies
LENDERRATES (APR)OUR PICKCOLLEGE AVE4.44% – 15.32%2Best overallSALLIE MAE4.50% – 16.20%Best for cosignersEARNEST4.45% – 16.20%Best for no feesASCENT4.62% – 15.66%Best for forebearance flexibilitySOFI4.49% – 13.80%Best for member benefits
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Can I Get Private Student Loan Forgiveness?
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
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There’s no such thing as private student loan forgiveness — in most cases, at least.
Two exceptions: If you die or become permanently disabled, as morbid as that sounds, some private lenders will forgive your loan balance.
If you have federal student loans, on the other hand, you can get them partially or fully forgiven through income-driven repayment plans and other federal student loan forgiveness programs.
Even though there aren’t formal private student loan forgiveness programs as for federal student loans, there are a few things you can do to try to ease the burden of your private student debt: Talk to your lender about alternative repayment options; consider deferment or forbearance; or look at student loan refinancing.
1. Talk to your lender about your options.
If you’re struggling to keep up with your private student loan payments, talk to your lender about your options for lowering your monthly bill. Different lenders have different programs for helping borrowers manage payments.
Your lender may be willing to offer you flexible repayment options beyond what we’ve outlined in this chart, so it’s always worth asking. If you don’t know how to phrase your request, try using this sample letter that the Consumer Financial Protection Bureau created to help borrowers ask private lenders for a lower payment. But private lenders aren’t obligated to honor the letter’s request, says Natalia Abrams, executive director of the nonprofit Student Debt Crisis.
Your lender may be willing to work with you to find a repayment solution that fits your needs. If that’s the case, your lender will want to know why you’re struggling to make payments, says Michael VanErdewyk, founder of ReliaMax, a company that insures and services private student loans. Let’s say you’re struggling because you have too many different types of debt. If you have just six months of payments left to go until you pay off your car loan, for example, a lender might let you defer your student loan payments until then, VanErdewyk says.
2. Consider deferment or forbearance.
Many private lenders offer deferment or forbearance, two options that let you temporarily postpone your loan payments. Deferment is typically an option if you’re going back to school or entering the military. Lenders offer forbearance to borrowers who are struggling to make payments because they lost their job, got sick or experienced another financial challenge. In other words, deferment is typically planned, whereas forbearance is a tool for borrowers to use when unexpected circumstances pop up, says Joe DePaulo, co-founder of private student lender College Ave Student Loans.
With both deferment and forbearance for private student loans, interest still accrues during the time when you’re not making payments, so you should go this route only if you really need it. This is different from federal student loan deferment, in which interest doesn’t accrue for borrowers with subsidized loans.
3. Lower your interest rate by refinancing.
If you have good credit, you may be able to get a lower interest rate on your private student loans by refinancing. When you refinance, you choose a new lender that can offer you a lower rate, and that lender will pay off your original lender. Most lenders also let you choose between a fixed interest rate, which stays the same throughout the life of your loan, and a variable interest rate, which changes as the economic markets change. You can compare several student loan refinancing options on NerdWallet’s refinancing page.
Find your best repayment strategy
In addition to these options, create your own repayment strategy to tackle your private student loans. For example, pay the minimum monthly amount toward each of your loans, and then put any extra cash you have toward your loan with the highest interest rate. Tell your lender to apply your extra payment to your loan balance instead of your next monthly payment — that will help you get rid of your most expensive debt faster.
About the author: Teddy Nykiel is a former personal finance and student loans writer for NerdWallet. Her work has been featured by The Associated Press, USA Today and Reuters. Read more
What is a confidential understudy loan?
Confidential understudy loans are regularly given by a bank or monetary foundation, (rather than bureaucratic understudy loans, which are presented by the public authority).
Kinds of private understudy loans
There are private understudy loans for understudies in undergrad, graduate, authentication, dental, clinical, and wellbeing calling programs. Sallie Mae likewise offers private understudy loans for graduates reading up for the final law test, or moving for clinical and dental residencies.
What can private school credits be utilized for?
Whether you're concentrating on the web or nearby, non-public school advances — as well as government understudy loans — for school and graduate school can be utilized to pay for your schooling costs, which for full-time and half-time understudies might include:
Educational cost
Food and lodging
Expenses
Books
Supplies
Transportation
PC for school
Acquire what you want for the whole school year. Apply just a single time with a solitary credit check and subsidizes will be sent straightforwardly to your school or college to cover each term as mentioned. You can drop future payment depending on the situation with no punishment. No extra premium is charged until cash is shipped off your school.
Who is qualified for private understudy loans?
Government and confidential understudy loans utilize different qualification rules.
Administrative understudy loans are presented by the public authority. You can finish up the FAFSA to decide qualification.
For Financed Advances, the US Branch of Training pays the interest while the understudy is in school half time, effortlessness (whenever offered) and approved suspension periods.
For Unsubsidized Credits, the borrower is liable for paying interest during the in-school or elegance periods, or a post-school suspension.
Confidential understudy loans, presented by banks and monetary foundations, depend on your reliability. Your credit — and your cosigner's credit — are assessed, alongside other data gave on your application. Applying for a confidential understudy loan with a financially sound cosigner might expand your opportunities for endorsement and may assist with getting you a superior rate.
You ought to for the most part consider government understudy loans first, and afterward take out a confidential understudy loan on the off chance that you actually need cash for school.
Instructions to search for private credits for school
There are contrasts between confidential credits for school. It's critical to find a respectable understudy loan bank; here are far to view as the right one:
Begin with your school to check whether they offer a bank list.
Affirm that the bank works with your school of decision.
Ask others for proposals on banks they've utilized for their understudy loans.
Ensure you're taking a gander at the right confidential understudy loan for your schooling. There might be various credits for undergrad, graduate, proceeding with schooling, or declaration courses.
Instructions to look at private understudy loans
Whenever you've found several moneylenders, you can contrast their confidential understudy loan choices with see what each offers:
What is the financing cost range?
Might you at any point pick a variable or fixed financing cost?
Are there educational loan charges, similar to a start expense?
Is there a decision of in-school reimbursement choices (fixed, interest just, or conceded)?
Are there helps that assist you with bringing down your loan fee?
Is there a program that allows you to make more sensible installments (like interest just) for a while after you graduate?
Do you approach your FICO® FICO assessment?
Are there different advantages that make the confidential credit for school important?
Is the organization trustworthy, with numerous long periods of involvement?
Applying for private understudy loans
You can apply for private school credits straightforwardly from every bank's site. You ought to apply after you've pursued your school choice and when you know the amount you really want to get, so you will not need to submit separate understudy loan applications for schools you're thinking about.
Step by step instructions to get a confidential understudy loan for school
There's ordinarily no expense to apply for private understudy loans, however there are a couple of things you ought to be aware before you start:
You'll finish up essential individual data and monetary data.
You'll be approached to pick the financing cost type and reimbursement choice for your credit.
You by and large can apply with a reliable cosigner during the application interaction. On the off chance that you apply with a cosigner, they'll need to supply their monetary data in the understudy loan application.
Our confidential understudy loan application process just requires around 15 minutes to get a credit result.
Comprehend the understudy loan application process
What amount would it be advisable for you to get for in confidential understudy loans?
As far as the amount you ought to take out for school, get just what you want to stand to repay later. Contemplate your future vocation and the amount you might make in your picked field. To assist with assessing your future pay potential, you can visit the US Branch of Work at bls.gov.
What amount could you at any point get in confidential understudy loans?
How much cash you can get from a private schooling credit fluctuates by moneylender. Assuming your moneylender requires "school accreditation," your school confirms your enlistment and guarantees that you're not getting more than the expense of participation (counting your government understudy loans, grants, and awards).
Do you want a decent financial record for private understudy loans
Confidential advances for understudies are credit-based. That implies that a loan specialist will check out at your set of experiences of getting cash and repaying it. Government understudy loans, then again, are by and large in view of monetary circumstance and administrative rules as opposed to credit. (Note: A credit check is led for the Government In addition to Credit.)
In the event that you don't have a record, you might require a cosigner. A cosigner can be a parent, relative, or some other financially sound person. Their great financial record might assist you with getting a confidential understudy loan.
Alongside you, a cosigner acknowledges liability regarding reimbursing your confidential understudy loan. On the off chance that you keep your credit on favorable terms, making on-time installments, it tends to be an incredible method for building your own credit. In the event that you fall behind or don't take care of your advance, your cosigner's credit can endure in the event that they don't make installments.
What occurs after you apply for a confidential understudy loan?
After you apply for our private schooling credits for school or graduate school, you'll commonly get a credit choice in the span of 15 minutes of applying. Once supported, you'll likewise get notification to audit, acknowledge, and virtual sign your credit terms.
Your school should guarantee your credit sum before it very well may be dispensed (paid to the school). Then you'll get a Last Revelation explaining the subtleties.
You reserve the privilege to drop your confidential understudy loan as depicted in the Last Revelation before it's dispensed (shipped off) your school.
Realize what occurs after your credit is supported
Dealing with your confidential understudy loans
Beginning with your most memorable semester, it'll be useful to monitor both your government and confidential understudy loans. Here are a few ways to oversee understudy loans and obligation:
You might apply for another credit each year that you're an understudy.
You might should be signed up for school half-time.
Premium gathers on your understudy loan over the lifetime of the advance. Making in-school installments might bring down the complete expense of your advance.
When you leave school, regardless of whether you graduate, you'll for the most part have an effortlessness time of a half year before you start to make head and interest installments.
As you keep on taking out government or confidential understudy loans all through your years in school, keep a rundown of the moneylenders, the amount you're getting — and remember to capably get.
Find out about dealing with your understudy loans
Questions? Need assistance applying?
Call us at
877-279-7172
footnote1. For applications submitted straightforwardly to Sallie Mae, advance sum can't surpass the expense of participation less monetary guide got, as ensured by the school. Applications submitted to Sallie Mae through an accomplice site might be exposed to a lower greatest credit demand sum. Various individual costs (like a PC) might be remembered for the expense of participation for understudies enlisted half-time.
footnoteSallie Mae doesn't give, and these materials are not intended to convey, monetary, charge, or legitimate exhortation. Counsel your own monetary guide, charge consultant, or lawyer about your particular conditions.
footnoteExplore government credits and contrast with ensure you figure out the terms and elements. Confidential understudy loans that have variable rates can go up over the existence of the credit. Government understudy loans are legally necessary to give a scope of adaptable reimbursement choices, including, yet not restricted to, pay based reimbursement and pay contingent reimbursement plans, and credit pardoning and suspension benefits, which other understudy loans are not expected to give. Government advances for the most part have start expenses, however are accessible to understudies paying little mind to pay.
footnoteFederal understudy loan data was accumulated on Walk 1, 2023 from studentaid.ed.gov.
footnoteSallie Mae gives pay to its accomplices to their reference of educational loan clients.
HomeUnderstand AidTypes of Monetary AidLoansFederal Versus Private Credits
With regards to paying for school, vocation school, or graduate school, government understudy loans can offer a few benefits over confidential understudy loans.
Need a credit to help pay for school? Think about government credits first!
In the event that you apply for monetary guide, your school will probably incorporate understudy loans as a component of your monetary guide bundle. It's essential to comprehend what sorts of advances you are advertised. By and large, there are two kinds of educational loans — government and private.
Bureaucratic understudy loans and administrative parent credits: These advances are financed by the central government.
Confidential understudy loans: These credits are nonfederal advances, made by a moneylender like a bank, credit association, state office, or a school.
Assuming you really want to get cash to pay for col
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