Best Private Student Loans for College in August 2025

Heading to college and still need to cover some costs?

A smart loan choice today can lead to a stronger financial future. LendEDU’s latest analysis helps students and families compare top private lenders for the 2025–2026 school year—looking at rates, repayment plans, cosigner options, and perks like rewards for good grades—so you can cover college costs with confidence and invest more in your future.

We’ll cover the 15 most popular and trustworthy private student loan lenders in depth below, so you can explore all your options.

Reviews of the best private student loans lenders

If one of the companies listed below stands out, you can click its name and jump to its review to find out why it’s one of the best, what its pros and cons are, and who’s eligible.

Table of Contents

1. Reviews of the best private student loan lenders
   1. Best overall: College Ave
   2. Best for fast cosigner release: Sallie Mae
   3. Best repayment perks: Earnest
   4. Best for graduate students: SoFi
   5. Great for multi-year approval: Citizens Bank
   6. Best for high academic performers: Funding U
   7. Best for international students: MPOWER
   8. Best for customer service: ELFI
   9. Best for Texas: Brazos
   10. Best for bad credit: Ascent
   11. Great for principal reduction: Custom Choice
   12. Great student loan marketplace: LendKey
   13. Best for no cosigner: Edly
   14. Great for discounts: PNC
   15. Great for military families: Navy Federal Credit Union
2. Student loans 101: Learn before you apply

Best overall: College Ave

Best Overall

5.0 _/5

View Rates

---

Why it’s one of the best
College Ave offers personalized solutions to undergraduates, graduates, parents, and career trainees. Its online experience is the best of all the companies we reviewed, featuring interactive calculators and tools that let you customize your loan terms and see how each choice affects your total cost.

• Covers up to 100% of school costs
• Low starting interest rates
• Quick 3-minute online application
• Excellent educational resources and interactive tools
• You choose your repayment plan and term length
• Multi-Year Peace of Mind program for additional loans

• Cosigners can’t be released until halfway through repayment
• Higher interest rates for applicants with bad credit

College Ave vs. Sallie Mae

College Ave vs. SoFi

College Ave vs. Ascent

College Ave vs. Earnest

College Ave vs. LendKey

Rates & funding

Variable rates (APR)	5.59% – 16.85
Fixed rates (APR)	4.39% – 16.49%
Rate discounts	0.25% for automatic payments
Loan amounts	$1,000 – 100% of school costs

Eligibility

Loan types	Undergrad, grad, parent, career training
Min. credit score	Mid-600s
Min. income	$35,000 per year
Enrollment	Half time or more
Citizenship	U.S. citizen, permanent resident, or international
State	All 50 states

Repayment

In-school repayment	Full, interest-only, fixed, deferred
Repayment terms	5, 8, 10, or 15 years
Grace period	6 months for undergrads, 9 months for grads, apply for 6-month extension
Deferment	In-school and military
Forbearance	Up to 12 months, in increments of 3 or 6 months
Cosigner release	After finishing more than half of the scheduled repayment period and meeting additional criteria

Best for fast cosigner release: Sallie Mae

Best for Fast Cosigner Release

4.8 _/5

View Rates

---

Why it’s one of the best
Sallie Mae is the most recognized name in student lending, which helps it serve a broader range of borrowers than most competitors. It’s also an excellent choice for cosigners, offering one of the fastest paths to release of repayment responsibility in as little as 12 months with consistent on-time payments.

• Shortest path to cosigner release in as little as 12 months
• Receive funds for the full year with one application
• Covers up to 100% of school costs
• Low starting interest rates
• Part-time and career-training students are eligible
• Lower interest rates for in-school repayment

• No prequalification with a soft credit check
• Less loan customization than other lenders

Sallie Mae vs. College Ave

Sallie Mae vs. Ascent

Sallie Mae vs. SoFi

Sallie Mae Alternatives

Rates & funding

Variable rates (APR)	6.37% – 16.70%
Fixed rates (APR)	4.50% – 15.49%
Rate discounts	0.25% for automatic payments
Loan amounts	$1,000 – 100% of costs

Eligibility

Loan types	Undergrad, grad, parent, career training
Min. credit score	Mid-600s
Min. income	Not disclosed
Enrollment	Half time or more
Citizenship	U.S. citizen or permanent resident or non-U.S. citizen with a cosigner who is a U.S. citizen or permanent resident
State	All 50 states, plus Washington, D.C., and Puerto Rico

Repayment

In-school repayment	Interest only, fixed, deferred
Repayment terms	10 – 15 years
Grace period	6 months
Deferment	In-school, military, internship, residency, and fellowship
Forbearance	Up to 12 months, in increments of 3 months
Cosigner release	After 12 consecutive on-time payments

Best repayment perks: Earnest

Best for Repayment Perks

4.7 _/5

View Rates

---

Why it’s one of the best
Earnest is another lender with an excellent online experience and several benefits that won’t be found elsewhere. It offers a 100% rate-match guarantee (with a $100 Amazon gift card) and lets borrowers skip one payment each year if needed without penalty.

• 100% rate-match guarantee (with $100 Amazon gift card)
• 9-month grace period vs. 6 months for most others
• Skip one payment each year without penalty if needed
• No application or late payment fees
• 2-minute eligibility check with no credit impact

• Doesn’t allow cosigners to be released

Earnest vs. College Ave

Rates & funding

Variable rates (APR)	5.62% – 16.20%
Fixed rates (APR)	4.11% – 15.90%
Rate discounts	0.25% for automatic payments
Loan amounts	$1,000 – 100% of costs

Eligibility

Loan types	Undergrad, grad, parent
Min. credit score	650
Min. income	$35,000 per year
Enrollment	All states other than Nevada, plus Washington, D.C.
Citizenship	U.S. Citizen, Permanent Resident Card Holder (10-year non-conditional or 2-year conditional), Deferred Action for Childhood Arrivals (DACA) Recipient, Asylee, or H-1B visa with a U.S. Citizen cosigner.
State	All states other than Nevada, plus Washington D.C.

Repayment

In-school repayment	Full, interest-only, fixed, deferred
Repayment terms	5, 7, 10, 12, or 15 years
Grace period	9 months
Deferment	In-school, military, residency, fellowship
Forbearance	Up to 12 months
Cosigner release	No

Best for graduate students: SoFi

Best for Graduate Students

4.7 _/5

View Rates

---

Why it’s one of the best
SoFi is an excellent online bank that offers all types of financial products, including student loans. Its benefits are consistently some of the best available, with up to $250 earned for good grades, financial planning services, and the option to redeem points to pay down your student loan balance.

• Up to $250 with GPAs of 3.0 or higher
• Earn and redeem points to pay down your balance
• Financial planning services
• Covers up to 100% of school costs
• No fees
• Chooose your repayment terms
• Interactive calculators and tools to estimate costs
• Check your rate without affecting your credit

• Doesn’t offer loans for career training

SoFi vs. College Ave

SoFi vs. Sallie Mae

Rates & funding

Variable rates (APR)	5.99% – 14.30%
Fixed rates (APR)	4.44% – 14.30%
Rate discounts	0.25% for automatic payments
Loan amounts	$5,000 – 100% of costs

Eligibility

Loan types	Undergrad, grad, parent
Min. credit score	679
Min. income	None
Enrollment	At least half time
Citizenship	U.S. citizen, permanent resident, visa holder (international & DACA w/ cosigner)
State	All 50 states

Repayment

In-school repayment	Full, interest-only, flat, deferred
Repayment terms	5, 7, 10, or 15 years
Grace period	6 months
Deferment	In-school, military, residency, internship
Forbearance	Yes, must call to discuss options
Cosigner release	24 on-time payments

Great for multi-year approval: Citizens Bank

Great for Multi-Year Approval

4.7 _/5

View Rates

---

Why it’s one of the best
Citizens Bank does an excellent job of focusing on the borrower’s future with its benefits. It offers a Multi-Year Approval program, where borrowers can accept an offer to receive additional loans for future years without a new application.

• Multi-Year Approval to simplify funding needs for future semesters
• Multiple rate discounts
• 2-minute prequalification with no credit impact
• Rate quotes are valid for 30 days

• Cosigners can’t be released for at least 36 months

Rates & funding

Variable rates (APR)	5.97% – 16.47%
Fixed rates (APR)	4.39% – 15.46%
Rate discounts	0.25% for loyalty, 0.25% for automatic payments
Loan amounts	$1,000 – $100,000

Eligibility

Loan types	Undergrad, grad, parent
Min. credit score	640
Min. income	$12,000
Enrollment	At least half time
Citizenship	U.S. citizen or permanent resident (international w/ cosigner)
State	All 50 states, D.C., U.S. territories

Repayment

In-school repayment	Full, interest-only, flat, deferred
Repayment terms	5, 10, or 15 years
Grace period	6 months
Deferment	In-school, internship, residency, military
Forbearance	Up to 12 months in 2-month increments
Cosigner release	36 on-time payments

Best for high academic performers: Funding U

Best for High Academic Performers

4.7 _/5

View Rates

---

Why it’s one of the best
Though you may pay a higher interest rate and are limited in how much you borrow, Funding U stands out because you don’t need good credit or a cosigner to qualify; you just need to be a good student.

• No cosigner needed
• Loans not based on credit score
• Dedicated loan officer to help with borrowing and repayment

• Not available in every state
• High starting interest rate
• Low max loan amount ($20,000 max per school year)
• In-school monthly repayments required

Rates & funding

Variable rates (APR)	N/A
Fixed rates (APR)	7.99% – 13.45%
Rate discounts	0.50% for interest-only payments
Loan amounts	$3,001 – $20,000

Eligibility

Loan types	Undergrad
Min. credit score	None
Min. income	None
Enrollment	Full-time
Citizenship	U.S. citizen, permanent resident, or DACA
State	38 states

Repayment

In-school repayment	$20 fixed or interest-only
Repayment terms	5 or 10 years
Grace period	6 months
Deferment	In-school, military, or residency
Forbearance	24 months
Cosigner release	N/A

Best for international students: MPOWER

Best for International Students

4.6 _/5

View Rates

---

Why it’s one of the best
MPOWER is our choice for the best student loan option for international students. It caters to those studying abroad in the United States during college and working abroad after graduation. 

• No cosigner or collateral required
• Generous rate discount
• Unique visa support for international students

• Pricey origination fee
• Must make payments before graduation
• Limited repayment terms

Rates & funding

Variable rates (APR)	N/A
Fixed rates (APR)	Starting at 11.41%
Rate discounts	0.25% for automatic payments
Loan amounts	$2,001 – $100,000

Eligibility

Loan types	Undergrad, Graduate
Min. credit score	None
Min. income	None
Enrollment	Attend an eligible program at one 500+ schools in the U.S. or Canada
Citizenship	International student, DACA recipient, U.S. citizen, refugee, or asylum-seeker
State	Available in all 50 states

Repayment

In-school repayment	Interest-only
Repayment terms	10 years
Grace period	6 months
Deferment	In-school or military
Forbearance	24 months
Cosigner release	No

Best for customer service: ELFI

Best for Customer Service

4.5 _/5

View Rates

---

Why it’s one of the best
ELFI offers one-on-one assistance with a student loan advisor to help borrowers through the entire application process—just one of the many reasons ELFI is known for its customer service.

• Positive reviews from existing borrowers
• Assigned a dedicated student loan advisor for support
• Check your rate without affecting your credit score

• Doesn’t offer cosigner release
• Must be enrolled at least half-time

Rates & funding

Variable rates (APR)	5.97% – 16.47%
Fixed rates (APR)	4.39% – 15.46%
Rate discounts	None
Loan amounts	$1,000 – 100% of certified costs

Eligibility

Loan types	Undergrad, grad, parent
Min. credit score	680
Min. income	$35,000 per year
Enrollment	At least half-time
Citizenship	U.S. citizen or permanent resident
State	All 50 states, D.C., and Puerto Rico

Repayment

In-school repayment	Full, interest-only, flat, deferred
Repayment terms	5, 7, 10, or 15 years
Grace period	6 months
Deferment	In-school and military
Forbearance	Up to 12 months
Cosigner release	N/A

Best for Texas: Brazos

Best for Texas Students and Residents

4.4 _/5

View Rates

---

Why it’s one of the best
If you’re looking for an affordable private student loan and you’re a Texas resident, or studying at a Texas school, add Brazos to your list. Brazos offers a wider range of term length options than most lenders, allowing you to align your monthly payment and overall loan cost with your post-graduation goals.

• Competitive rates
• Many term-length options
• Excellent transparency and openness

• Available to Texas students and residents and non-Texas residents attending eligible Texas colleges or universities.
• Can’t be used at for-profit schools or most community colleges
• Noticeable lack of reviews from actual customers

Rates & funding

Variable rates (APR)	Starting from 4.32% incl. a 0.25% ACH discount
Fixed rates (APR)	2.96% – 7.63%
Rate discounts	0.25% for automatic payments
Loan amounts	$1,000* – 100% of school-certified costs

Eligibility

Loan types	Undergrad, Graduate, MBA , Law, Medical, Health Professions, Doctoral
Min. credit score	680 (borrower or cosigner)
Min. income	$35,000 (borrower or cosigner)
Enrollment	Be enrolled with at least half-time status at an accredited and not-for-profit four-year institution within the United States
Citizenship	U.S. citizen or permanent resident; non-citizens with a work or student visa and DACA recipients can qualify with an eligible cosigner
State	Texas

Repayment

In-school repayment	Immediate, interest-only, or deferred
Repayment terms	5, 7, 10, 15, or 20 years
Grace period	6 months
Deferment	In-school, military, or residency
Forbearance	Up to 12 months for economic hardship or natural disaster forbearance (in 3 months increments) Up to 36 months for active-duty military forbearance
Cosigner release	Yes, after you make 24 on-time payments (or prepaid by 24 months) and pass a credit check

Best for bad credit: Ascent

Best for Students With Bad Credit

4.8 _/5

View Rates

---

Why it’s one of the best
Ascent offers traditional cosigned and non-cosigned student loans. Students with poor or no credit history can instead get an outcomes-based loan, which is based on other criteria, such as where they’re attending school, what they’re majoring in, and their GPA.

• Loans available without credit history (or with poor credit)
• Grace period up to 9 months after graduation
• Career support available
• UPCash reward when you graduate (1% of principal balance)
• 1% autopay discount for non-cosigned outcomes-based student loans

• Outcomes-based loans are only available to juniors and seniors
• $2,001 minimum loan amount (more than many lenders)

Ascent vs. College Ave

Ascent vs. Sallie Mae

Rates & funding

Variable rates (APR)	5.01% – 14.02%
Fixed rates (APR)	3.39% – 13.76%
Rate discounts	0.25% for automatic payments
Loan amounts	$2,001 – $200,000

Eligibility

Loan types	Undergraduate, grad, parent, career training
Min. credit score	620 for cosigned, no min. for outcomes-based
Min. income	$24,000
Enrollment	At least half-time, must be  a junior or senior for no-cosigned loans
GPA	2.9 GPA or higher and meet your school’s SAP requirements
Citizenship	U.S. citizen or permanent resident (international & DACA w/ cosigner)
State	All 50 states

Repayment

In-school repayment	Full, interest-only, flat, deferred
Repayment terms	5, 7, 10, 12, or 15 years
Grace period	9 months
Deferment	In-school, military
Forbearance	Up to 24 months (increments of 4 months)
Cosigner release	12 on-time payments

Great for principal reduction: Custom Choice

Great for Principal Reduction

4.3 _/5

View Rates

---

Why it’s one of the best
Custom Choice reduces your principal balance by 2% when you graduate, which is the highest graduation reward we’ve seen.

• 2% principal reduction upon graduation
• Prequalification without a credit check
• Covers up to 100% of school costs
• Flexible in-school repayment options, including deferred payments

• 36 months before you can request cosigner release

Rates & funding

Variable rates (APR)	5.39% – 15.57%
Fixed rates (APR)	4.43% – 14.04%
Rate discounts	0.25% for automatic payments
Loan amounts	$1,000 – $99,999

Eligibility

Loan types	Undergrad
Min. credit score	Undisclosed
Min. income	Undisclosed
Enrollment	Undisclosed
Citizenship	U.S. citizen or permanent resident (international w/ cosigner)
State	47 states

Repayment

In-school repayment	Full, interest-only, flat, deferred
Repayment terms	7, 10, or 15 years
Grace period	6 months
Deferment	Natural disaster
Forbearance	Up to 12 months (increments of 2 months)
Cosigner release	36 on-time payments

Great student loan marketplace: LendKey

Great for a Student Loan Marketplace

4.2 _/5

View Rates

---

Why it’s one of the best
LendKey is a marketplace that connects borrowers with community banks and credit unions. It’s a unique approach to student lending that could reward borrowers with better rates.

• Compare offers from community banks and credit unions
• Referral program ($200 bonus per successful referral)
• Soft credit check to see potential lenders
• Career counseling and job placement services through NextJob

• Fees and rates vary by lender
• $2,000 minimum loan amount (more than many lenders)

LendKey vs. College Ave

Rates & funding

Variable rates (APR)	4.54% – 8.62%
Fixed rates (APR)	4.39% – 10.39%
Rate discounts	0.25% for automatic payments
Loan amounts	$1,000 – 100% of costs

Eligibility

Loan types	Undergrad
Min. credit score	680
Min. income	$24,000
Enrollment	At least half-time
Citizenship	U.S. citizen or permanent resident
State	45 states

Repayment

In-school repayment	Full, interest-only, or flat
Repayment terms	10 years
Grace period	6 months
Deferment	Must call to discuss
Forbearance	Up to 18 months (6 month increments)
Cosigner release	24 on-time payments

Best for no cosigner: Edly

Best for No Cosigner

3.9 _/5

View Rates

---

Why it’s one of the best
Edly is the only company on this list that offers an income-based repayment solution that protects you in case of job loss or if you don’t get a high starting salary right out of college.

• Income-based repayment option to keep loans manageable
• Available without a cosigner
• No payments if you make less than $30,000 or lose your job
• Prequalification without credit check

• Short grace period (four months)
• Only available if you’re within two years of graduating
• Still must meet minimum credit score requirements
• Higher payments if you make more money

Rates & funding

Variable rates (APR)	Earlier of 60 or 84 completed payments, 2.25x the borrowed amount, or 23% APR
Fixed rates (APR)	N/A
Rate discounts	None
Loan amounts	$5,000 – $25,000

Eligibility

Loan types	Junior/senior, graduate, career training
Min. credit score	None
Min. income	None
Enrollment	Full-time
Citizenship	U.S. citizen or permanent resident
State	Undisclosed

Repayment

In-school repayment	None
Repayment terms	60 payments or 2.25x borrowed amount
Grace period	None
Deferment	If income drops below certain threshold
Forbearance	None
Cosigner release	12 on-time payments

Great for discounts: PNC

Great for Discounts

3.6 _/5

View Rates

---

Why it’s one of the best
PNC doesn’t offer benefits that are up to par with most competitors, but it does offer an automatic payment rate discount that is double (0.50%) the industry standard, which could be valuable to those who already use the bank.

• Larger autopay discount
• Loans for undergrads, grads, health professionals, law students, and more
• Low starting interest rates
• Flexible repayment terms (5, 10, and 15 years)
• Small minimum loan amount ($1,000)

• Max $75,000 annual loan limit
• No soft credit inquiry option when checking eligibility
• Late fees

Rates & funding

Variable rates (APR)	8.44% – 15.64%
Fixed rates (APR)	6.69% – 13.89%
Rate discounts	0.50% for automatic payments
Loan amounts	Undisclosed

Eligibility

Loan types	Undergrad, grad, bar study
Min. credit score	Undisclosed
Min. income	Undisclosed
Enrollment	At least half-time
Citizenship	U.S. citizen or permanent resident
State	All 50 states

Repayment

In-school repayment	Full, iInterest-only, deferred
Repayment terms	5 – 15 years
Grace period	6 months
Deferment	Undisclosed
Forbearance	Undisclosed
Cosigner release	48 on-time payments

Great for military families: Navy Federal Credit Union

Great for Military Families

3.5 _/5

View Rates

---

Favorite feature
Navy Federal Credit Union is known for stellar customer service for military families; you can expect that same service with your student loan.

• Great for military families
• Available for undergrad and grad students
• Known for its great member service
• Cover up to 100% of school costs
• Career assistance available

• Limited repayment terms (max is 10 years)
• Higher interest rates
• No soft credit inquiry option when checking eligibility
• Only available to members of the credit union

Rates & funding

Variable rates (APR)	7.79%+
Fixed rates (APR)	5.50%+
Rate discounts	0.25% for automatic payments
Loan amounts	Up to 100% of costs

Eligibility

Loan types	Undergrad, grad
Min. credit score	None
Min. income	None
Enrollment	Undisclosed
Citizenship	U.S. citizen or permanent resident
State	All 50 states

Repayment

In-school repayment	Full, interest-only, or flat
Repayment terms	5 or 10 years
Grace period	6 months
Deferment	Undisclosed
Forbearance	Undisclosed
Cosigner release	24 on-time payments

What is a private student loan?

One definition of a private loan is: an educational loan originated and serviced by a private lender. Popular private student loan companies include the following:

• Earnest
• SoFi
• Sallie Mae
• Discover
• College Ave

It’s essential to consider the pros and cons of private student loans. Like federal student loans, private loans can help you pay for eligible educational expenses. 

But unlike federal loans, private student loans don’t come with the same benefits, including access to forgiveness programs, income-driven repayment plans, and generous forbearance and deferment options.

Private student loans are also credit-based, which means you need to meet specific credit and income requirements to get approved or have a cosigner who meets them. Instead of a flat, fixed interest rate for all who qualify, your interest rate can be fixed or variable and is based on your creditworthiness.

Key private student loan terms to know before applying

Interest rates

When you take out a private student loan, the lender charges you interest—basically a fee for borrowing the money. Student loan interest rates can be either fixed or variable.

• Fixed rates stay the same for the life of your loan. What you see is what you get, and your monthly payments won’t change.
• Variable rates can go up or down over time based on market conditions. They often start out lower than fixed rates but could end up higher.

Your interest rate is usually based on a mix of factors, including your credit score, income, debt-to-income ratio, and whether you have a cosigner. In general, the stronger your financial profile (or your cosigner’s), the better rate you’ll get.

One important thing to know: Some lenders show you their lowest possible rates, but only the most qualified borrowers actually get them. So it’s always smart to get a few quotes and see what offers are available to you.

When choosing a private student loan lender, nearly 75% of borrowers say a low interest rate is the most important term.

— LendEDU private student loans survey

Interest capitalization

Interest capitalization is when the interest accrued during your periods of deferment (while you’re in school, your grace period, etc.) is added to your principal amount. You’re then charged interest on the higher principal balance. 

To avoid this, look for loans that offer in-school repayment options—such as interest-only or flat payments. This allows you to pay some or all of the accrued interest, thus lowering your total costs when your periods of deferment end and you enter repayment. 

Cosigner requirements

Some private lenders require cosigners to qualify for a loan. Lenders also have different policies regarding when to release your cosigner (if at all), such as after you make consistent payments for a period of time. 

Repayment options

See what repayment terms are available, typically from five to 20 years. The longer the repayment term, the lower your monthly payment could be, but you’re paying more interest over time. Lenders may also offer varying repayment terms, such as making fixed or interest-only payments while in school or making payments once you graduate.

To help you research, consider these highest-rated lenders our team has chosen based on available interest rates, repayment terms, and cosigner benefits. 

70% of borrowers would recommend taking out a private student loan.

— LendEDU private student loans survey

Types of private student loans

The student loans we’ve ranked and reviewed above are undergraduate student loans for college freshmen through seniors. If you’re applying for a graduate or professional program, or if you have any specific needs or financial challenges, you can seek out which loan is the best fit for your situation.

How do private student loans work?

Understanding how student loans work can help you determine whether they’re the right fit for you.

How much can you borrow?

Each lender has a range of loan amounts, which can start around $1,000 or $2,000. Many go up to the total cost of attendance for the academic term as determined by your school. Lenders may also require you to subtract other financial aid received from your eligibility.

You can request to borrow a certain amount, but the amount you get is based on what the lender determines after reviewing your total costs and other aid. Lenders may also consider your and your cosigner’s credit history, income, and other factors to calculate your loan amount.

Lenders may also have a maximum aggregate loan amount, ranging from $75,000 to $120,000 for undergraduate students and $150,000 to $400,000 for graduate students.

When are the funds disbursed?

You can apply for loans for a single term, an entire academic year, or even multiple years. The funds are often disbursed around the start of each semester—your school will determine the exact timing. 

How are the funds disbursed?

Most lenders disburse student loan funds to your school. If funds are left over after paying tuition and fees, room and board, and other eligible expenses, your school will give you the remaining balance, which you can use for other approved costs. 

You may receive the funds through a paper check, direct deposit, or even a debit card, depending on what you’ve set up with your school.

What can I use the funds from private student loans for?

Approved expenses for private student loans are often the same as for federal student loans. That includes the following:

• Tuition and fees
• Room and board
• Books and supplies
• Off-campus housing
• Transportation
• Computers and software
• Other necessary equipment

Of course, lenders aren’t looking over your shoulder or watching your bank account to ensure you only use your loan proceeds for approved purposes. Using loan funds for lifestyle-related expenses can leave you with more debt, affecting your financial health for years after you graduate.

How does repayment work?

Private student loan repayment terms can range from five to 20 years, but your options may vary by lender. 

Potential options include the following.

Deferred repayment

As with federal student loans, you won’t have to make payments while in school or during your grace period after you graduate, leave school, or fall below half-time enrollment. Depending on the lender and type of loan, the grace period can be six months, nine months, or longer.

Immediate repayment

If you can afford it, you may make full payments right away. Even while you’re still in school!

Interest-only repayment

With this option, you’ll pay only the monthly interest that accrues on your loans. Then, once you’ve left school and reached the end of your grace period, you’ll start making full payments for the length of your repayment term.

Fixed repayment

Your lender may allow you to make a low fixed monthly payment, often $25, while in school and during your grace period. After that, you’ll start making full monthly payments.

You’ll choose which repayment term and process you want when you apply for your loan. Read the entire loan agreement before signing it to ensure it’s the right one. 

Repayment plan examples

For example, let’s say you take out a $10,000 loan with a 7% interest rate and a 10-year repayment term and graduate two and a half years later. Assuming a six-month grace period, here’s what your balance will look like with each possible repayment option after three years:

Repayment option	Monthly payment	Balance after 3 years
Deferred repayment	$0	$12,100
Fixed repayment	$25	$11,200
Interest-only repayment	$58.33	$10,000
Immediate repayment	$116.11	$7,693.03

Note: If you choose a deferred or fixed repayment option, your monthly payment at the start of your full repayment term will be higher due to the increased balance. 

How does interest work on a private student loan?

Private lenders may offer fixed interest rates or both fixed and variable interest rates.

Fixed rates

With a fixed-rate loan, your interest rate will remain the same for the life of the loan, giving you more predictability. In contrast, variable interest rates can fluctuate over time based on economic conditions.

Variable rates

Variable rates often start lower than fixed rates, but not always. And your rate can go down, but the opposite is also true. You can choose which type of interest rate you want, but your lender will determine your interest rate based on your and your cosigner’s creditworthiness. You can view lenders’ annual percentage rate (APR) ranges on their websites. 

You can choose when you start making monthly payments, but interest starts accruing on your loans upon disbursement. If you don’t make payments while in school, the lender will capitalize the accrued interest once repayment begins and add it to your balance. 

How to choose the right private student loan for you

Take our quiz below, and we’ll send you in the right direction!

How to apply for a private student loan

For federal student loans, you just fill out the Free Application for Federal Student Aid (FAFSA) to apply. Do this before considering private student loans to maximize your student loan benefits. 

With private loans, you must apply with the lender you choose. You don’t need to do so as early as possible. Remember that the whole process can take several weeks, so don’t wait until right before your term starts.

Before applying, check your credit score using a free service, such as Experian’s credit monitoring service, to gauge your credit health and whether you need a cosigner (which is common). 

Minimum credit score requirements often start in the mid-600s, but the higher your score, the better your odds of qualifying for a low interest rate.

Why you should shop around 

Once you’re ready, it’s important to compare interest rates, repayment terms, and other features from at least three lenders. Many private student loan companies will let you prequalify and get rate quotes with a “soft” credit check, which won’t hurt your score. 

These quotes aren’t final—you’ll get final terms after you submit an official application and undergo a “hard” credit check—but they can help you narrow down your list of options to a single lender.

Once you decide on a lender, you’ll apply online through its website, providing details about yourself, your cosigner (if applicable), your school, and more. 

If you’re approved, the lender will submit the details to your school for certification and then return to you with a loan amount. If you agree to the terms, you’ll sign the loan agreement, and the lender will disburse your loan based on your school’s schedule.

What if you’re denied a private student loan?

If you’re denied a student loan, the lender will provide you with an adverse action letter detailing the reasons. If you applied on your own, you might have better luck if a parent or loved one with good credit is willing to cosign the application.

Otherwise, you might need to look into other funding sources, such as scholarships, grants, work-study, or a part-time job. 

You could also check with your school’s financial aid office about a short-term institutional loan or consider a less expensive school.

How we rated the best private student loans

Since 2015, LendEDU has evaluated student loan lenders to help readers find the best student loans. Our latest analysis reviewed 725 data points from 25 lenders and financial institutions, with 29 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These data points are organized into broader categories, which our editorial team weights and scores based on their relative importance to readers. These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Higher star ratings are ultimately awarded to companies that create an excellent borrower experience. This includes offering online eligibility checks, cost transparency, competitive interest rates with no fees, flexible repayment plans, and unique benefits that support borrowers throughout repayment.