Best private student loans
Starting on your college funding strategy early is crucial. Many students underestimate the total cost of higher education, which extends beyond tuition to include essentials like textbooks, commuting expenses and living arrangements. These costs can quickly add up, creating a significant financial burden.
When planning how to pay for your education, it's wise to first investigate scholarships, grants, and federal student loan options. Federal student loans often stand out as the most advantageous borrowing choice for students, thanks to their unique set of benefits and protections.
However, if federal loans won't cover all your expenses, private student loans can help. While they may lack some of the safeguards associated with federal loans, private loans have their own set of advantages, such as potentially higher borrowing limits, more customizable repayment terms and faster approval processes. These features can make private loans an attractive option when additional funding is needed.
To help you navigate your options, we've compiled a list of the most competitive private student loan offerings currently available.
Start exploring your student loan options here now to see what you're eligible to receive.
Best private student loans
Here are some of the best private student loans currently available, broken down by six categories:
- Best overall: College Ave
- Best for low rates: Earnest
- Best for parents: Sallie Mae
- Best for no fees: Discover
- Best for students with bad credit: Ascent
- Best for students with good credit: SoFi
Best overall: College Ave
College Ave gets our nod for the best private student loan because this lender checks all the boxes. They provide loan amounts that vary from as low as $1,000 to the total cost of your entire school-certified expenses like tuition, fees and housing. Student loans rates are competitive, at 3.59% to 17.99% for fixed undergraduate loans. Variable rate loans range from 5.34% to 17.99% for undergraduate loans.
With an undergraduate or graduate student loan from College Ave, you have numerous in-school repayment options, including paying interest-only or a flat $25 monthly. Keep in mind that while in-school payments aren't mandatory, your loans will still accumulate interest during that time. By making even small payments while in school, you can manage the accruing interest and prevent your loan balance from growing excessively.
Repayment terms are for five, eight, 10 or 15 years. When choosing a repayment term, remember that shorter-term loans generally come with higher monthly payments than longer-term loans.
Best for low rates: Earnest
Earnest provides low interest rates with APRs that range from 4.29% to 16.49% on fixed-rate undergraduate loans (with autopay discounts) and APRs that range from 5.62% to 16.85% on variable-rate undergraduate student loans. Graduate loans come with APRs that range from 4.29% to 14.30% for fixed-rate loans and 5.89% to 15.97% for variable-rate loans.
This private student loan lender offers four repayment options during school: interest-only payments, full principal and interest payments, $25 monthly payments or payment deferral. And, unlike many lenders, Earnest offers several payment options, including repayment terms for five, seven, 10, 12 or 15 years. If you can afford a higher payment, it may make sense to pay off your loan with a shorter-term loan to save money on interest.
Also, the minimum loan amount is only $1,000, so if you have a minimal financial gap to cover after federal financial aid, you don't need to incur more debt with a larger loan. And if you need more money, Earnest loans can cover up to 100% of school-certified costs of attendance.
Best for parents: Sallie Mae
Sallie Mae is one of the largest and most well-known student loan servicers in the United States. The government sponsored the organization since its start in 1972 before Sallie Mae transitioned into a private company in 2014.
Sallie Mae offers a Smart Option Student Loan, which it touts as a student loan with a cosigner. Your cosigner can be a parent, spouse, relative or any adult. Students can choose fixed or variable annual percentage rates (APRs) starting at 3.49% and 5.04%, respectively, which includes a 0.25% automatic payment discount. According to Sallie Mae, the process, from application to disbursement, takes around 10 business days or less.
Check Sallie Mae student loan rates here.
Best for no fees: Discover
More than just a credit card company, Discover also provides private student loans with several perks, including no application, origination or late fees. Discover's no-fee student loans combine with lower interest rates and cash rewards for good grades to lower the costs of borrowing for students.
Discover's student loan APRs are as low as 6.12% for variable-rate loans and 5.29% for fixed-rate loans. They allow you to borrow up to 100% of school-certified costs, such as tuition, housing and books, minus any financial aid you receive. The company's minimum borrowing amount is only $1,000 and it only offers a single repayment term of 15 years.
Best for students with bad credit: Ascent
Many students have poor credit scores because they lack an established credit history. That's one reason why most private student loan companies require a cosigner to offset the lender's perceived risk. Ascent is bucking that trend by offering non-cosigned loans to undergraduate, graduate, DACA and international students.
For example, students without established credit can apply for the Non-Cosigned Outcomes-Based loan without a cosigner, and your eligibility is based on your school, program, major, GPA and other criteria. And if your credit history is shorter than two years, you don't need to meet any minimum income requirements.
Best for students with good credit: SoFi
You'll likely need good credit to qualify for a private student loan with SoFi. While SoFi doesn't publish minimum credit score requirements on its website, it does evaluate your credit history and debts when reviewing your application.
If you have decent credit, SoFi's student loans offer a wide array of benefits, including flexible repayment options, no fees and career services. With the autopay discount applied, the APRs for fixed-rate loans start as low as 3.54%, while the APRs for variable-rate loans begin at 5.54%.
The bottom line
When comparing private student loans options, remember that a low interest rate is important, but it shouldn't be your sole focus. To find the most suitable loan for your specific financial circumstances, evaluate multiple aspects, like the total amount you can borrow, the range of interest rates offered, flexibility in repayment plans and any associated fees, to identify the loan that's best for your unique circumstances.
