Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Student Loans Best Small Student Loans Updated May 23, 2023   |   10-min read Written by Zina Kumok Written by Zina Kumok Expertise: Student loans, credit scores, personal loans, banking, education planning Zina Kumok is a personal finance writer dedicated to explaining complex financial topics so real people can understand them. As a former newspaper reporter, she has covered everything from murder trials to the Final Four. Learn more about Zina Kumok Reviewed by David Haas, CFP® Reviewed by David Haas, CFP® Expertise: Student loans, college financial planning, retirement planning, divorce, health insurance, life insurance, investment management David Haas, CFP®, advises families, professionals, executives, and business owners on how to build better financial futures. His expertise includes financial planning, investment management, and insurance. David is a board member of the Financial Planning Association of New Jersey. Learn more about David Haas, CFP® We always recommend starting with federal student loans, however, many companies can offer extra financial support in the form of a small student loans. Our best overall pick is College Ave to get any size student loan. When you’re a college student, it seems like you always need more money. Maybe you need to replace a laptop or make a deposit on an apartment for a summer internship. When you need a little money quickly, taking out a small student loan can be the fastest option. The minimum amount you can borrow is usually $1,000, which will likely cover most of your expenses. The 5 best small student loans First, max out your federal student loans before applying to one of the private lenders listed below. Federal student loans offer superior features including income-driven repayment plans and eligibility for loan forgiveness programs. The lenders listed below all offer small private student loans, but eligibility requirements and minimum loan amounts may differ. Make sure you meet these requirements before applying. College Ave View Rates Editorial Selection: Best Overall Minimum loan amount of $1,000Choose a repayment term of 5, 8, 10, or 15 yearsNo limitations on how you use the funds College Ave offers variable-rate loans with rates ranging from 0.94% APR to 11.98% APR, and fixed-rate loans with rates ranging from 2.94% APR to 12.99% APR. The minimum loan is $1,000; the maximum is the annual cost of attendance minus any other financial aid. College Ave offers five-, eight-, 10- and 15-year repayment terms. College Ave offers four different repayment options for students while they are attending school, including: Full principal and interest: These are the highest monthly payments for students, but you’ll pay the lowest interest while in school and reduce the size of the loan upon leaving.Interest-only: These are the second-highest monthly payments.Flat payment: You’ll pay $25 while in school, the lowest payment you can have without deferring your loans. Unfortunately, the total size of the loan will grow with the amount of deferred interest.Deferred payment: If you can’t afford to pay anything in college, opt for deferred payments. You won’t have to make payments, but you’ll end up paying more total interest over the life of the loan and the size of the loan will include all the deferred interest upon leaving school. Sallie Mae View Rates Editorial Selection: Best for Cosigners Minimum loan amount of $1,000Cosigner release is available after the borrower makes just 12 consecutive on-time paymentsHolds the largest share of private student loans in the industry Sallie Mae is among the most well-known student loan companies. The minimum loan amount is $1,000, and the maximum is the annual cost of attendance minus other financial aid. Sallie Mae offers variable-rate loans with rates ranging from 1.13% to 11.23% APR and fixed-rate loans ranging from 3.50% to 12.60% APR. Sallie Mae offers the following repayment plans: Interest-only: This is the most expensive repayment option for students but also results in the least amount of total interest paid over the life of the loan.Flat payment: Students can make $25 monthly payments while in school.Deferred payment: Students can defer payments while enrolled. This is the most expensive repayment option but a good choice for students who can’t afford payments. Like other student loan companies, Sallie Mae requires a cosigner for borrowers who don’t qualify on their own. A cosigner is an adult with a good credit score and steady income who agrees to take on the financial and legal responsibility of your student loans if you default. After graduating, borrowers can apply to have the cosigner removed from the loan after they’ve made 12 on-time monthly payments. Earnest View Rates Editorial Selection: Best for No Fees Minimum loan amount of $1,000No origination, application, prepayment, or late payment feesPrequalify without impacting your credit The minimum amount for an Earnest student loan is $1,000, and the maximum is the annual cost of attendance minus other financial aid. Variable rates start at 0.99% APR, and fixed rates start at 2.94% APR. While you’re enrolled, you can choose from four different payment plans: Full interest and principal: You’ll make regular payments on your student loans, which will result in you paying the least amount of total interest.Interest-only: You’ll cover the interest that accrues on the loan. These payments may be greater than the $25 fixed monthly payments, but this depends on the interest rate and loan amount.Flat payment: You’ll pay $25 a month while still in school.Deferred payment: You won’t owe anything while still in school, but you’ll end up paying the highest total interest over the life of the loan. Earnest has a nine-month grace period, while most other lenders only offer six months. Ascent View Rates Editorial Selection: Best for Eligibility Minimum loan amount of $2,001Borrowers experiencing financial difficulty can enter forbearance for up to 24 monthsOffers no cosigner loans One thing that makes Ascent stand out from others on this list is the option to apply for a no cosigner student loan. Private student loan companies almost always require a cosigner because students typically don’t have enough income or credit history. Ascent recognizes that many students don’t have adults who are eligible or willing to be cosigners. Ascent offers both non-cosigned loans and cosigned loans. Interest rates for cosigned variable-rate loans range from 1.47% to 9.05% APR, while rates for fixed-rate loans range from 3.28% to 11.26% APR. Interest rates for non-cosigned loans range from 4.05% APR to 10.80% APR, while rates for fixed-rate loans range from 5.95% APR to 13.02% APR. Discover View Rates Editorial Selection: Best Good Grades Reward Minimum loan amount of $1,000Discover rewards students who earn at least a 3.0 GPA in high school, college, or graduate schoolOnly offers one repayment term Discover offers variable-rate loans with rates ranging from 1.29% APR to 10.59% APR and fixed-rate loans with rates ranging from 3.99% to 11.59% APR. The minimum amount for a Discover student loan is $1,000, and the maximum is the annual cost of attendance minus other financial aid. Unlike other lenders, Discover offers a one-time cash reward worth 1% of the loan balance if you earn a 3.0 GPA or higher. Discover offers the following types of repayment plans: Interest-only: Monthly payments cover the interest that accrues on the loan.Fixed payments: You’ll pay $25 a month while you’re enrolled and during the six-month grace period.Deferred payment: All payments are deferred until you either graduate or drop below part-time status, whichever comes first. This repayment option will result in the most interest paid over the life of the loan. How to take out a small student loan Taking out a small student loan can be fairly straightforward, but the process depends on whether you’re taking out a private loan or a federal loan. Read below to see how the processes differ. 1) Fill out the Free Application for Federal Student Aid (FAFSA) To take out federal student loans, you have to complete the FAFSA. The FAFSA is required to receive federal student loans, federal and state grants, and work-study. Many schools also require the FAFSA to qualify for internal scholarships and grants. The FAFSA asks questions about you and your family’s finances to determine whether you qualify for need-based aid. If you do, you’ll receive grants that will reduce how much you need to borrow in student loans. If you don’t qualify for any need-based aid, you’ll still be eligible for unsubsidized federal student loans. Many students don’t complete the FAFSA because they assume they won’t qualify for financial aid, but every student who completes the FAFSA can receive unsubsidized federal student loans even if they don’t qualify for other aid. For the 2022–23 school year, the FAFSA was available on October 1, 2021. The exact FAFSA due date depends on your college. You must complete the FAFSA every year you want to be eligible for financial aid or unsubsidized federal student loans. 2) Apply for free financial aid Students should also apply for free financial aid like grants and scholarships. Unlike student loans, these awards do not have to be repaid. There are two types of awards you can win: internal and external. Internal awards, otherwise known as scholarships, are granted by the institution you’re attending. You typically don’t have to submit a separate application to be eligible for internal awards, but this depends on the school’s policies. External awards are given by third-party organizations and companies. You can find external grants and scholarships on a website like Cappex. 3) Take out federal student loans Borrowers should max out federal student loans before taking out private student loans. Federal student loans offer more loan forgiveness programs, income-driven repayment options, and extended deferment and forbearance programs. The annual limit for federal student loans is between $5,500 and $12,500, depending on your year in school and whether you’re an independent or dependent student. Dependent students are younger than 24 and live at home or receive financial assistance from their parents. Independent students are 24 or older, married, veterans, current service members, or meet other criteria, which can be found here. If you’ve hit the annual federal student loan limit and still need more money to pay for college, your parents can also apply for federal Parent PLUS loans. These are federal loans that parents can borrow on their child’s behalf. The annual limit for a Parent PLUS loan is the cost of attendance minus any other financial aid. Some states also have loan programs for residents who are attending in-state or out-of-state colleges or out-of-state students who attend colleges in-state. Terms and availability of these loans vary, but they can be a very good deal for students and parents. New Jersey, for example, offers NJClass loans that can come with better rates than a Parent PLUS loan. Another option is a private student loan in your name. 4) Apply for private student loans to fill the gap The process of taking out a private student loan is different than taking out a federal student loan. Instead of filling out the FAFSA, you’ll complete a loan application form. The lender will run a credit check on both you and a cosigner unless you apply for a no-cosigner student loan. When you fill out the application, you’ll have to state how much you need to borrow. Once you are approved by the lender, you will then select a repayment term and payment plan. The repayment term refers to how long it will take to pay the loan back. Most private lenders offer terms ranging from five to 20 years. Generally, lenders offer lower interest rates for shorter loans, but the monthly payments will be higher. Interest rates will be higher for longer-term loans, but monthly payments will be lower. Choose a repayment plan that you can easily afford while in college. If you can’t afford to pay anything, then you’ll have to defer payments until after you graduate. How you can use small student loans Students typically use small student loans to cover miscellaneous expenses, like fees for studying abroad, the cost of a new laptop, or rent. And while attending college can be pricey, you should only use student loans for tuition, bills, and other necessary expenses. Remember, the more money you borrow, the more you’ll have to pay back—with interest—after you graduate. When you’re calculating how much to borrow, take this into account. What happens if you borrow more than you need? If you have taken out a larger federal student loan balance than necessary, you can return that money to the financial aid department or loan servicer within 120 days of disbursal. Contact the financial aid department to find out what your next steps are for returning the excess funds. If you end up borrowing more in private loans than you need, there’s usually no easy way to give the money back. Start by contacting the lender and asking if there’s a way to refund the money. If you can’t just give it back, the best course of action would be to put the money toward your student loan balance immediately. The sooner you apply the extra funds toward your student loans, the less interest will accrue. Go online and make a lump sum payment. If you have multiple private student loans, use the extra money for the loan with the highest interest rate. Another option is to keep the funds in a savings account for next semester’s expenses, which will allow you to take out fewer loans.