Student loans are a complicated and charged subject. For many of us, one of the first financial decisions we make in life is among the most consequential.
Agreeing to assume tens of thousands of dollars of debt as a teenager, possibly with no income and no promise of future employment, seems ill-advised to even the most casual observer. Yet it’s the norm, and it’s the only way for many students access higher education.
The best you can do for your financial future is to be as well-informed as possible. As you head into college, lots of offers may fly your way. Take a moment to step back, consider your financial needs, and choose the best path forward for you and your family. And if that path involves private student loans, it pays to choose the best company for your needs.
Best Private Student Loan Companies
These lenders are the top in the industry for private student loans and student loan refinancing.
However, regardless of their flexibility or perks, private student loan options are typically credit-based. You have to have good credit or apply with a creditworthy co-signer to qualify (which is different from federal student loans, most of which are need-based and don’t rely on a credit check).
If you don’t know your credit history, check your credit score before applying for a loan.
Credible is a lending marketplace where you can search for and compare prequalified rates for private student loans, personal loans, mortgages, credit cards, and mortgage and student loan refinancing. It partners with seven lenders that offer private student loans.
Credible’s features include:
- Loan Types. Credible’s partner lenders offer undergraduate and graduate student loans.
- Loan Options. Choose between variable-rate and fixed-rate loans. Annual percentage rates (APRs) vary by lender.
- Repayment Options. Access loan terms of between five and 20 years, depending on the lender you connect with through Credible.
- Availability. U.S. citizens who are students can apply. International students can apply for loans with Credible’s partner lenders as long as they have a creditworthy co-signer who’s a U.S. citizen or permanent resident.
- Co-Signer Release Options. Options for co-signer release (the ability to remove your co-signer from the loan after a set period) depend on loan terms, which vary by lender.
- Fees. You don’t pay a fee to use Credible. (Lenders pay fees to acquire customers through Credible.) However, you may have to pay fees like application fees and origination fees, depending on your lender. You have no obligation to apply or accept a loan offer from a lender that offers you a prequalified rate.
- Discounts and Rewards. Some lenders may offer discounts, such as an auto-payment discount on your interest rate. Availability of discounts varies by lender.
- No Hard Credit Check. Using the marketplace to see prequalified interest rates, you can shop around for the best lenders without putting in applications with every lender, which would result in multiple credit inquiries (which can lower your credit score). Once you have a prequalified offer, you can apply with the lender having a better idea of your chance of being approved, so your risk of rejection after a hard credit check is reduced.
- Prequalification in Minutes. To see rates, you answer a series of questions through Credible’s comparison engine. Then you see your loan options side-by-side in your Credible dashboard in just a few minutes. If you don’t want to wait for all the rates to come in, Credible can email, call, or text you when they’re ready.
Credible might be the best fit if you haven’t applied for a loan or credit before and are unsure of the kinds of loans your credit profile could qualify for. You can experiment by entering your information on its own, then entering information with a co-signer to see your options before applying and submitting to a hard credit check.
LendKey is an intermediary between lenders and borrowers. It primarily partners with credit unions and community banks to offer private student loans, student loan refinancing, and home improvement loans.
LendKey isn’t the lender. Its partner banks and credit unions originate loans and work with you through LendKey’s digital platform. LendKey’s features include:
- Loan Types. LendKey offers undergraduate and graduate student loans and student loan refinancing.
- Loan Options. LendKey offers loans with APRs as low as 1.49% variable or 3.99% fixed. You can borrow up to 100% of your school’s cost of attendance, a figure your school’s financial aid office names based on tuition, fees, room and board, textbooks, and other education expenses.
- Repayment Options. Loan terms are five, 10, or 15 years.
- Availability. To apply, you must be enrolled at least half time in a degree-granting program from an approved school and be a U.S. citizen or permanent resident.
- Co-Signer Release Options. If you apply with a co-signer, you may become eligible to release them of their obligation to the loan later as your credit improves. To qualify, you need to make a required number of consecutive on-time loan payments (as indicated in your loan agreement), provide proof of income, pass a credit check, and have no bankruptcies, foreclosures, or defaulted loans.
- Fees. Pay no application fees or origination fees when you apply for a loan through LendKey, regardless of the lender behind the loan.
- Discounts and Rewards. Knock your interest down by 0.25 percentage points when you set up automatic payments for your loan.
LendKey’s loan options are pretty typical for the space without many financial perks that make it stand out from competitors. However, it’s a good option if you prefer to support and work with nonprofit credit unions or smaller community banks rather than large, for-profit institutions.
CommonBond is an online lender with a social mission. It offers private student loans and student loan refinancing.
Through its 1-for-1 Social Promise, the lender supports the education of a child in the developing world for every loan funded. It also facilitates CommonBond for Business, which lets employers offer student loan repayment as a perk.
But its social commitment and the promise of employer-assisted repayment aren’t the only benefits of working with the company. Its features include:
- Loan Types. CommonBond offers loans for undergraduate, graduate, and professional-degree students.
- Loan Options. The loans come with fixed interest rates between 3.74% and 10.74% APR or variable rates between 3.81% and 9.37% APR. You can borrow up to 100% of your school’s cost to attend, with a minimum loan amount of $2,000. The lifetime borrowing limit is $500,000.
- Repayment Options. Loan terms are five, 10, or 15 years. You can entirely defer payment on your CommonBond student loan while you’re enrolled in school and during a six-month grace period. Interest continues to accrue, but you avoid late fees and default. To get ahead of it and save money in the long run, you can opt for a different repayment plan: a fixed monthly payment of $25, interest-only monthly payments, or full monthly payments while you’re in school.
- Availability. Undergraduate and graduate students enrolled at least half time at a school in CommonBond’s network, which includes more than 2,000 Title IV-accredited universities or graduate programs, are eligible to apply.
- Co-Signer Release Options. You can apply to release your co-signer after you’re out of school and have made 24 consecutive on-time monthly payments. Approval is also subject to passing a credit check.
- Fees. Pay no application or origination fees when you apply for and borrow a loan from CommonBond.
CommonBond might be the best fit if you want to work with a lender that supports a social mission and put your money to work to provide education for children around the world.
Ascent is a student loan program created by financial technology company Goal Structured Solutions and lender Bank of Lake Mills. Ascent offers several features, including some its competitors don’t.
- Loan Types. Ascent offers student loans for undergraduate and graduate students as well as those seeking a Master of Business Administration (MBA), medical, dental, or law degree, or a Ph.D.
- Loan Options. Borrow up to 100% cost of attendance, up to $200,000. Choose between variable-rate and fixed-rate loans. Undergraduate juniors and seniors who don’t prequalify for a credit-based loan because of no credit score or income requirements can apply to borrow up to $20,000 per year through a loan that considers alternative factors that could make you eligible based on your potential future income, including your school, degree program, graduation date, major, and grade point average. (Note: It’s a typical student loan with a repayment term and interest. It’s not an income sharing agreement.)
- Repayment Options. Choose a five-, seven-, 10-, 12-, or 15-year repayment term for credit-based loans, with no early repayment penalty.
- Availability. Any students who are U.S. citizens attending an eligible institution can apply. Non-U.S. citizens can apply with a creditworthy co-signer who’s a U.S. citizen or permanent resident.
- Co-Signer Release Options. Apply to release your co-signer after making 24 consecutive on-time loan payments. Co-signer release isn’t available for Deferred Action for Childhood Arrivals students or students who are non-U.S. citizens.
- Fees. Pay no application or origination fees when you apply for and borrow a loan from Ascent.
- Discounts and Rewards. Ascent offers an auto-pay interest rate discount of 0.25 points. When you graduate, you can request a cash-back reward of 1% of your loan’s principal balance. You have to graduate within five years and set up automatic payments to be eligible.
Ascent is a good option for students who need more flexibility than most private lenders offer, especially if you’re unable to apply with a co-signer but don’t have a strong credit history of your own. It’s also a unique option offering expanded opportunities to cover professional degrees, including business, medical, dental, and law degrees and Ph.Ds.
SoFi is a top online lender well known for private student loans and student loan refinancing. SoFi borrowers become SoFi “members” for free and have access to banking, investing, financial planning, career coaching, member events, and rewards. Student loan features include:
- Loan Types. SoFi offers undergraduate and graduate private student loans, including loans for law school and MBA loans as well as student loan refinancing and parent loans. Like the federal parent PLUS loan, SoFi’s parent loans let parents take out loans in their name to pay for their child’s education to prevent the student from taking on any debt.
- Loan Options. SoFi’s student loan options let you choose from a fixed APR between 4.23% and 11.26% or a variable APR between 1.87% and 11.66%. Get funded up to 100% of your school’s cost to attend, with a minimum loan amount of $5,000.
- Repayment Options. Available loan terms are five, 10, or 15 years. SoFi offers deferment and forbearance options for borrowers experiencing job loss or financial hardship. Through its Unemployment Protection Program, you can apply to suspend monthly payments for three months (up to 12 months throughout the life of the loan) if you lose your job through no fault of your own.
- Availability. Any student, including U.S. citizens, permanent residents, and visa holders, can apply. Non-U.S. citizens must apply with a creditworthy co-signer who’s a U.S. citizen or permanent resident.
- Co-Signer Release Options. You can apply to release a co-signer from the loan after 24 months of complete on-time loan payments.
- Fees. Pay no application or origination fees to take out a loan, plus no late-payment fees or prepayment penalties.
- Discounts and Rewards. Reduce your interest rate by 0.25 percentage points when you set up automatic loan payments.
- No Hard Credit Inquiry: Get prequalified on SoFi’s website and see a quoted interest rate for your loan before officially applying and submitting to a hard credit check.
Customers tout SoFi’s customer service, so it’s a smart choice if that’s important to you. SoFi is also a good fit if you want to employ financial management tools to get started with banking or investing in addition to borrowing for school.
Earnest is a student loan servicing tech company that offers private student loans and student loan refinancing.
Earnest offers perks focused on flexibility and borrower success. Its features include:
- Loan Types. Undergraduate and graduate students residing in the U.S. are eligible to apply.
- Loan Options. Choose from a variable-rate loan with rates starting at 1.05% or a fixed-rate loan with rates starting at 3.49%. Borrow between $1,000 and up to 100% of the cost of attendance.
- Repayment Options. Loan terms range from five to 20 years. If you choose to defer repayment until after you leave school, you’ll have a nine-month grace period before your first monthly payment is due (interest continues to accrue). After at least six months of consecutive on-time payments, you can request to skip one payment every 12 months. Interest continues to accrue, and your repayment term is extended by the number of skipped months, both of which can result in a higher total cost. Choose whether your loan payments are due monthly or every two weeks. Paying every two weeks could reduce the amount of interest you accrue over the life of your loan.
- Availability. Earnest loans are available anywhere in the U.S. except Nevada. Applicants must be U.S. citizens or permanent residents or apply with a co-signer who’s a U.S. citizen or permanent resident.
- Co-Signer Release Options. Earnest doesn’t offer co-signer release and instead encourages borrowers to refinance a co-signed loan in their own name.
- Fees. Pay no origination fee or application fee to obtain a loan and no late-payment or prepayment penalties during repayment.
- Discounts and Rewards. Receive a 0.25-point auto-pay interest rate reduction.
This company accounts for college students who need flexibility from a lender as they start their careers after school. It could make a good fit for students in fields that don’t promise high salaries and job stability right after graduation.
7. College Ave
College Ave is a private student loan company that offers student loans and student loan refinancing for parents, undergraduate students, and graduate students, including those in medical school, dental programs, law school, or seeking an MBA.
Features of College Ave loans include:
- Loan Types. College Ave offers student loans and student loan refinancing for undergraduate students and graduate students, including those in medical school, dental programs, law school, or seeking an MBA. A parent can also take out a loan in their name to pay for their child’s education, and parents can opt to receive $2,500 of the loan directly for more control over how it’s used.
- Loan Options. College Ave offers loans up to 100% of your school’s cost of attendance, with a minimum loan amount of $1,000, with a fixed interest rate between 3.34% and 12.99% APR or a variable rate between 1.04% and 11.98%.
- Repayment Options. Choose a loan term of five, eight, 10, or 15 years. While in school, you can choose to defer payments, make a $25 monthly payment, make interest-only payments, or make full payments. Parent loans come with the same flexible repayment options as student loans (minus in-school deferment).
- Availability. International students with a U.S. Social Security number are eligible to apply for loans with College Ave. Most private student loans are only available to students attending school at least half time, but College Ave makes loans available to students attending full-time, half-time, or less than half time at eligible schools.
- Co-Signer Release Options. You can apply to release your co-signer from the loan after half the repayment period has passed, you’ve made 24 consecutive on-time payments, passed a credit check, and had income for the past two years that’s more than twice your outstanding balance.
- Fees. Pay no application or origination fees to get a loan from College Ave.
- Discounts and Rewards. Students enrolled in an associate, bachelor, or graduate degree program at select community colleges and universities can apply for College Ave’s Career Loan with Success Rewards and receive $150 cash back when they graduate.
College Ave could be a good fit for students attending community colleges or taking only a class or two at a time, as it offers options that most competitors don’t.
8. Citizens Bank
Citizens Bank is a traditional bank with branches in New England and online banking available to anyone in the U.S. It offers private student loans and student loan refinancing in addition to banking, credit cards, home loans, auto loans, and investing services.
Citizens Bank student loans have multiple features:
- Loan Types. Citizens Bank offers private student loans for undergrad and grad students and student loan refinancing. Its parent loan lets a parent take out a loan in their name to fund their child’s education.
- Loan Options. Citizens Bank offers student loans with a minimum loan amount of $1,000, up to $150,000 max for the aggregate costs of your undergraduate education. Parent loan amounts are from $1,000 to $350,000. Get loans with a fixed APR from 3.99% to 10.92% or a variable APR from 1.19% to 10.67%.
- Repayment Options. Choose a five-, 10-, or 15-year repayment term. Parent loans come with either five- or 10-year terms. Both students and parents can make full payments or interest-only payments while the student is in school or defer payments while the student is in school for up to eight years.
- Availability. Available to U.S. citizens or permanent residents enrolled at least half time in a degree-granting program at an eligible institution. International students can apply for a loan with a creditworthy co-signer who’s a U.S. citizen or permanent resident.
- Co-Signer Release Options. You can apply to release your co-signer after 36 consecutive on-time payments.
- Fees. Pay no application, origination, or disbursement fees to apply or receive your loan.
- Discounts and Rewards. Get a 0.25 percentage point reduction on your interest rate for setting up automatic loan payments and an additional 0.25-point reduction if you or a co-signer have an existing account with Citizens Bank.
- Multiyear Approval. Instead of reapplying each school year or term, get approved once at the beginning of your first year to see how much you can borrow across your college career. In subsequent years, Citizens Bank only does a soft credit check for a quicker approval process and no impact on your credit score. Interest rates may fluctuate, so your new loan rate will be set with each new year.
Though its offers are pretty standard in the student loan space, this company is a good fit for anyone who prefers to work with a traditional institution, especially if you live in the northeast and want access to brick-and-mortar branches.
Discover is a decades-old financial institution best known for its credit cards. It’s rapidly expanded its capabilities in consumer banking and lending during the past 15 years.
Discover’s student loan features include:
- Loan Types. In addition to loans for undergrad and graduate students and their parents, Discover offers medical residency loans and bar exam loans for medical and law school graduates.
- Loan Options. Choose from variable-rate loans with rates between 1.24% and 11.99% APR or fixed-rate loans with rates between 4.24% and 12.99% APR for undergraduate loans. Borrow between $1,000 and up to 100% of the cost of attendance with 15-year terms.
- Repayment Options. Your loan may be eligible for an additional three-month deferment if you’re still within your grace period or the first three months of your repayment period. Discover offers flexible options for those having trouble making payments, including the ability to bring a delinquent loan current by making three consecutive payments, reducing your monthly minimum payment for at least six months, and reducing your interest rate for at least six months.
- Availability. To apply, you must be enrolled at least half-time in a degree-seeking program and be making satisfactory academic progress (as defined by your school). U.S. citizens and permanent residents can apply, and noncitizens can apply with a co-signer who’s a U.S. citizen or permanent resident. Students at least 16 years old can apply — a younger threshold than most lenders, which typically require applicants to be 18 years old (or the age of majority in their state).
- Co-Signer Release Options. Discover doesn’t provide an option for co-signer release.
- Fees. Pay no application or origination fees, late fees, or prepayment penalties.
- Discounts and Rewards. Undergraduate and graduate students are eligible to receive a 1% cash-back reward on the disbursed loan balance as long as their GPA for any term the loan covers is 3.0 or higher. Incoming first-year students can receive the reward for a high school GPA of 3.0 or higher. Set up automatic loan payments to receive a 0.25 percentage point interest rate deduction on any Discover student loan. Earn a reward of 2% of your outstanding principal balance when you graduate.
- Multiyear Option. Apply with a co-signer, and you may qualify for multiyear approval, which means you get to see how much you can borrow for your entire education. In subsequent years, you and your co-signer apply with prefilled applications and a soft credit check.
Discover is a smart option for borrowers who want assistance and motivation to establish strong finances. Its products support building or rebuilding credit. And its flexible options let you stay on track, even if you make a mistake or experience financial hardship as you get started after school.
The bank also offers a Discover it cash-back credit card for students with 5% cash back at places students commonly shop, like Amazon, grocery stores, and restaurants. And its fee-free cash-back online checking account is a good option that can travel with students during and beyond school.
10. Sallie Mae
Sallie Mae is a go-to private student loan lender that’s been around since 1972. Since its founding, it’s gone through iterations, which might confuse some borrowers into thinking this is a government or government-associated lender.
In its current iteration, Sallie Mae simply offers private student loans. In the past, it has originated federally guaranteed loans as well as serviced federal student loans — but it no longer does either of those.
Current Sallie Mae private loan features include:
- Loan Types. In addition to undergraduate, graduate, and parent loans, Sallie Mae offers bar study and medical residency loans. Or borrow to pay for professional training and trade certificate courses at a non-degree-granting school, like culinary school or a technical college. Parents can take out a loan in their name to pay for their child’s higher education. They can also take out a family education loan to pay for their child’s K-12 private school cost with a three-year repayment term.
- Loan Options. Sallie Mae offers loans between $1,000 and up to 100% of your school’s cost of attendance. Choose from variable-rate loans with rates between 1.13% and 11.23% APR and fixed-rate loans with rates from 4.25% to 12.59% APR.
- Repayment Options. Choose from terms of five, 10, or 15 years.
- Availability. Students can apply whether attending school full-time, half-time, or less than half-time. Applicants must be U.S. citizens or permanent residents or apply with a co-signer who’s a U.S. citizen or permanent resident.
- Co-Signer Release Options. You can apply to release your co-signer after making 12 consecutive on-time payments.
- Fees. Pay no application or origination fees. Sallie Mae charges a late-payment fee of 5%, up to $25.
- Discounts and Rewards. Set up automatic loan payments, and get a 0.25 percentage point deduction on your interest rate. Undergraduate borrowers get four months free of Chegg Study, a personalized online homework help service.
This lender is the best option for anyone who wants to borrow for education most lenders don’t cover, including K-12 and trade schools.
Before applying for a private loan, look for college scholarships and grants that could fund some of your education without debt. Then fill out your Free Application for Federal Student Aid to see your aid options, including federal student loans.
After you exhaust these free or cheap options for financing college, private student loan lenders can fill in any gaps.
When you compare private student loan companies, most of them will promote their financial appeal: the lowest interest rates and no fees. You need to go deeper to make the best decision for your (or your child’s) future finances.
Just about any lender you find can offer low interest rates if your credit looks good. And most have eliminated fees to stay competitive. What sets them apart are their unique perks and programs. Review those closely to find the lender that best sets you up for financial success after college.
For example, SoFi’s integrated financial services and community let you learn about and manage your finances all in one place. Earnest accounts for the job search and early career hurdles you might face after school. Discover offers rewards and repayment assistance to support borrowers with low or unstable income. Look for perks and programs that fit your lifestyle and financial needs.
If you’re looking for refinancing options, perks and repayment flexibility are just as crucial as they are with new loans. When you refinance a federal student loan with a private lender, you may save money with a lower interest rate. But you also forfeit tons of options for repayment and loan forgiveness that come with federal loans.