Looking for a new private student loan?
Learn more below!
Private student loans are used by over one million students each year. Why? Well, the rising cost of higher education has made it difficult for students and families to afford college. Scholarships, grants, and federal student loans are all great ways to help meet your cost of attendance, but often these are not enough.
Many students are left with a sizable gap between their financial aid awards and the cost of attendance at college. Private student loan packages were created to help students fill that gap. You can boost your odds of getting approved for a private student loan by applying to lenders whose requirements you meet. Connecting with the best lender for you can help you get the college funding you need with fewer headaches.
At LendEDU, we work to add transparency to the private student loan market and help our users find the best lenders. Also, we strive to educate our users on responsible borrowing during college and responsible repayment after college. We put together this guide to help you navigate the confusing private student loan market. You will be an expert, ready to responsibly use private student loans to fund your education in no time.
Compare the Best Private Student Loan Options
Get personalized rates and repayment options from our top rated private student loan lenders below.
|Lender||Fixed APR||Variable APR||Repayment Terms||Estimated APR|
5.99% - 13.99%3Fixed APR
3.99% - 12.99%3*Variable APR
15 or 201Repayment Terms
What we like
See Discover Important Disclosures
5, 10, or 15Repayment Terms
What we like
See Ascent Important Disclosures
Easily Compare Private Student Loans
Find out what rates you are eligible for in 3 simple steps!
Easily Compare Private Student Loans
5 to 15*Repayment Terms
What we like
See Sallie Mae Important Disclosures
5, 8, 10, or 153Repayment Terms
What we like
See College Ave Student Loans Important Disclosures
7, 10, or 153Repayment Terms
What we like
See SunTrust Important Disclosures
5, 10, or 151Repayment Terms
What we like
Up to 15Repayment Terms
What we like
See PNC Important Disclosures
*Discover’s lowest rates shown include an interest-only repayment discount and a 0.25% interest rate reduction for automatic payments.
Our Top 7 Lenders for Private Student Loans
Before you apply, you should know that most lenders have a minimum FICO credit score for approval. In addition, you re much more likely to be approved for the best private student loan if you have a creditworthy cosigner. Each lender has its own specific underwriting criteria, so you may have a higher chance of approval by certain lenders. Read the detailed lender reviews to find out more about the eligibility requirements.
Here are LendEDU's top picks for the best private student loan companies:
- Sallie Mae
- College Ave
- Citizens Bank
1. Discover Student Loans
LendEDU Rating (4.73 / 5.0)
- 1% cash rewards for good grades2
- 0.25% auto debit reward while enrolled in automatic payments during repayment4
- Get a great interest rate with no fees
- Simple application - You could get a response in minutes
- 24/7 US-Based Customer Service
5.99% - 13.99%3
3.99% - 12.99%3
15 or 201
No origination or prepayment fees
1. Aggregate loan limits apply.
2. At least a 3.0 GPA or equivalent qualifies for a one-time cash-reward of 1% of the loan amount of each new Discover student loan. Reward redemption period is limited. Please visit https://www.discover.com/student-loans/policies/rewards-for-good-grades-policy.html for any applicable reward terms and conditions.
3. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans, including Undergraduate, Graduate, Health Professions, Law and MBA Loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable Margin percentage. The margin is based on your credit evaluation at the time of application and does not change. For variable interest rate loans, the 3-Month LIBOR is 2.25% as of April 1, 2018. Discover Student Loans will adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the "interest rate change date"), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Please visit https://www.discover.com/student-loans/interest-rates.html for more information about interest rates.
4. View Terms and Conditions
Discover is a well-known bank that is popular for its Discover credit cards. It also offers private student loans for undergraduate and graduate degrees. Discover undergraduate student loans allow you to borrow anywhere from $1,000 up to the full cost of attendance at your school, but aggregate loan limits apply. They offer variable interest rate loans that start at 3.99% (3-month LIBOR + 2.74%) and go as high as 12.99% (3-Month LIBOR + 8.99%) APR.1They also offer fixed rate loans that start at 5.99% and go as high as 13.99%. Lowest rates shown include an interest-only repayment discount, a 0.25% interest rate reduction for Auto Debit Reward and are applicable for applications submitted before 9/2/2018. How much you will pay depends heavily on your personal financial and credit situation or that of your cosigner. If you get a variable rate loan, your loan will fluctuate in accordance with the 3-month LIBOR rate.
Discover loans do not have any required fees including prepayment fees or late fees. Their term length is 15 years for the undergraduate loan and 20 years for the graduate loan. If you want to borrow money from Discover Student Loans, you will likely need a cosigner with good credit and steady income as many students have no credit history and don’t make enough income to qualify on their own. By applying with a cosigner, you increase your likelihood of getting approved and qualifying for a lower interest rate. It should be noted that Discover loans do not provide cosigner release so cosigners are responsible for the loan for the life of the loan.
While you’re in school, you can choose to make in-school payments where you make either interest-only or $25 fixed payments each month while you are studying and during your grace period. You can also choose to defer your loan repayments - which means that you do not have to make payments until 6 months after you graduate. They also try to help borrowers who are struggling with repayment by working out temporary alternative payment options.
To apply for a Discover student loan, you can fill out an online application. If you are approved, Discover will request documentation and contact your school for a school certification. This ensures that you don’t borrow more than the cost of attendance for that year. School certification can take anywhere from three to five weeks to complete. Discover also offers 24/7 U.S.-based customer service.
Discover Student Loans offers competitive interest rates and no required fees. The fact that they don’t charge late fees on your missed payments is also a rare perk. One of the benefits of Discover loans is that you get a 1% cash reward on each new loan when you get a GPA of at least 3.0.2 You can also get a 0.25% auto debit reward when you are enrolled in automatic payments.4
They encourage you to make small payments while you’re in school which will help decrease the cost of your loans by preventing interest from capitalizing. You have the option to make either interest-only or $25 fixed, monthly payments while in school and during the grace period to lower the overall loan cost. However, you can also choose to defer payments, meaning that monthly payments are not required until after the grace period or enrollment drops below half-time.
When shopping for a student loan, it’s important to compare your options. You might find a lender that offers lower rates. There are also other companies that offer private student loans without cosigners, such as alternative underwriting criteria that allow you to qualify for a loan if you have good grades and are planning to go into certain fields rather than just based on your credit score.
Discover Student Loans does not offer cosigner release, whereas some other lenders do. If you’re using a cosigner, this might be an important consideration when choosing a loan. Finally, Discover Student Loans checks borrowers’ credit to approve them for loans. This standard lending practice means your credit will take a small and temporary ding when you apply for a Discover student loan even if you decide not to take it.
2. Ascent Student Loans
LendEDU Rating (4.55 / 5.0)
- New undergraduate and graduate degree loans available
- 1% Cash Back at Graduation9
- In-school interest only, deferred repayment, and a $25 minimum payment plan are available
- 0.25% interest reduction for automatic payments
- No early repayment penalties, origination fees, application expenses, or disbursement charges when an application is submitted
- Variable rates as low as 3.83% APR1
- Choose a term length of 5, 10, or 15 years
- Fixed rates as low as 5.56%1
5.56% - 12.11%1
3.83% - 10.58%1
5, 10, or 15
No origination or prepayment fees
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB) or Turnstile Capital Management, LLC (TCM), which are not affiliated entities. Certain restrictions and limitations may apply. Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. All loan products may not be available in certain jurisdictions. Other terms and conditions apply. Ascent is a federally registered trademark of TCM and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
1. Ascent rates are effective as of 08/01/2018 and include a 0.25% discount applied when a borrower in repayment elects automatic debit payments via their personal checking account. Competitive rates calculated monthly at the time of loan approval.
- Ascent Independent non-cosigned loan: Variable rate loans are based on a margin between 4.00% and 12.50% plus the 1-Month London Interbank Offered Rate (LIBOR), rounded to the nearest 1/100th of a percent. The current LIBOR is 2.069%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 5.49% - 12.77%. Fixed rate loans have an APR range between 7.06% - 13.72%. Click here for Ascent Independent non-cosigned loan current rates and repayment examples.
- Ascent Tuition cosigned loan: Variable rate loans are based on a margin between 2.00% and 11.00% plus the 1-Month London Interbank Offered Rate (LIBOR), rounded to the nearest 1/100th of a percent. The current LIBOR is 2.069%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 3.82% - 12.82%. Fixed rate loans have an APR range between 5.54% - 14.59% Click here for Ascent Tuition cosigned loan current rates and repayment examples.
2. Payments may be deferred. Subject to lender discretion, forbearance and/or deferment options may be available for borrowers who are encountering financial distress.
3. Making interest only or partial interest payments while in school will not reduce the principal balance of the loan. There are three (3) flexible in-school repayment options that include fully deferred, interest only and minimum repayment.
4. Flexible repayment plans may be offered with up to a fifteen (15) year repayment term for a variable rate *Ascent Tuition borrowers who choose a fixed rate option may ONLY select a loan term of five (5) or ten (10) years (60 or 120 months, respectively). *Ascent Independent borrowers who choose a fixed rate option may ONLY select a ten (10) year repayment term.). For certain loans with low balances, the minimum monthly payment amount may cause the loan amortization schedule to be less than the selected term.
5. Interest rate reduction of 0.25% for enrollment in automatic debit applies only when the borrower and/or cosigner signs up for automatic payments and the regularly scheduled, current amount due (including full, flat, or interest only payments, as applicable) is successfully deducted from the designated bank account each month. Interest rate reduction(s) will not apply during periods when no payment is due, including periods of In-School, Deferment, Grace or Forbearance. If you have two (2) returned payments for Nonsufficient Funds, we may cancel your automatic debit enrollment and you will lose the 0.25% interest rate reduction. You will then need to requalify and re-enroll in automatic debit payments in order to receive the 0.25% interest rate reduction.
6. All applicants (individual and cosigner) are required to complete a brief online financial literacy course as part of the application process to be eligible for funding.
7. Eligibility, loan amount and other loan terms are dependent on a number of factors, including: loan product, other financial aid, creditworthiness, school, program, graduation date, major, cost of attendance and other factors. Aggregate loan limits may apply. The cost of attendance is determined and certified by the educational institution.
8. The legal age for entering into contracts is eighteen (18) years of age in every state except Alabama where it is nineteen (19) years old, Nebraska where it is nineteen (19) years old (only for wards of the state), and Mississippi and Puerto Rico where it is twenty-one (21) years old.
9. In order to be eligible for the 1% Cash Back Graduation Reward, borrower must meet the following criteria after graduation:
- The student borrower has graduated from the degree program that the loan was used to fund.
- The student borrower may change majors and/or transfer to a different school, but must obtain the same level of degree (e.g. – undergraduate or graduate)
- The graduation date is more than 90 days and less than five (5) years after the date of the loan’s first disbursement.
- Any loan that the student has borrowed under the Ascent loan is not more than 30-days delinquent or in a default status as of the graduation date and until any Graduation Reward is paid.
Ascent Program for Funding Education, more commonly referred to as Ascent, is a private lender that offers education funding solutions for a variety of students. Its lending model, based on several credit tiers that offers the option for adding a cosigner to make the approval process easier for student borrowers. Ascent is partnered with a number of private lenders, including Richland State Bank and Goal Structured Solutions (GS2), to help underwrite and fund private education loans for students.
Ascent student loans are made available to borrowers working toward an undergraduate, graduate, or nursing degree, as well as international students attending college in the United States. Students may apply for an Ascent student loan as an individual or with a creditworthy cosigner. Loans are available for as little as $1,000 or as much as $200,000 (aggregated over time), based on the total qualified cost of attendance.
Private student loans offered by Ascent are structured with either fixed or variable interest rates, depending on the preference of the borrower. Fixed interest rates for student loans without a cosigner range from 7.07% up to 13.74% while fixed rates for loans with a cosigner range from 5.56% up to 12.11%. Variable interest rates for loans without a cosigner begin as low as 5.50% up to 12.78%, and variable rates for loans issued with a cosigner range from 3.83% to 10.58%. Borrowers who select a variable interest rate may experience an increase in the total cost of the loan should interest rates rise over time. Ascent private student loans can be repaid over the course of 5, 10, or 15 years, based on the needs and budget of the borrower. For each term of student loan repayment, borrowers can choose from one of three repayment plans.
In-school interest only payments are beneficial for students who want to pay down the accumulated interest on outstanding student loans balances while in school. Deferred repayment is also available, allowing students to delay repaying loan balances and accrued interest until up to six months after graduation or leaving school at least half-time. Also, borrowers may opt for a $25 minimum payment plan, which requires a payment each month while the student is enrolled at least half-time in school.
Ascent private student loan borrowers can receive an interest rate discount of 0.25% for using automatic payments, helping reduce the total cost of the loan over its lifetime. Additionally, student borrowers are not charged early repayment penalties, nor are they subject to origination fees, application expenses, or disbursement charges. Ascent private loans also allows cosigners to be released from the obligation as long as 24 on-time payments have been made in succession.
One standout feature of Ascent private student loans is the option for borrowers to easily add a cosigner to an application if their credit doesn't meet the requirements. While adding a cosigner to a private student loan application can help some student borrowers, Ascent still reviews the creditworthiness of all listed applicants to determine if a loan can be offered and at what cost.
The lender may ask for details surrounding income, debts owed, and assets in bank accounts. Students must also provide information about their selected college or university, the specific degree program they wish to pursue, and the estimated cost of attendance. All borrowers who apply for Ascent student loans either as the primary borrower or the cosigner must reside within the United States either as a citizen or as a permanent resident, and they must be of legal age to enter a contract (depending on the state, it might be 18 or older). It is also important that borrowers understand that once a repayment term is selected at the time of application, it cannot be changed once funds are disbursed.
3. Sallie Mae Student Loans
LendEDU Rating (4.75 / 5.0)
- New private undergrad and graduate loans available
- Borrow up to 100% of the school-certified cost of attendance3
- Interest rate reductions available2
- No application, origination, disbursement, or prepayment fees
- It takes about 15 minutes to apply and get a credit result
- Variable interest rates from 4.00% to 10.86% APR1
- Fixed interest rates from 5.74% to 11.85% APR1
5 to 15*
No origination or prepayment fees
See Sallie Mae Disclosures1,2,3,7
*This repayment example is based on a typical loan to a borrower who chooses a variable rate and the Fixed Repayment Option for a $10,000 loan, with two disbursements, and an 8.77% variable APR. It works out to 51 payments of $25.00, 119 payments of $160.54 and one payment of $119.94, for a Total Loan Cost of $20,499.20. Variable rates may increase over the life of the loan. This repayment example is based on a typical loan to a first-year graduate borrower who chooses a variable rate and the Fixed Repayment Option for a $10,000 loan, with two disbursements, and a 7.83% variable APR. It works out to 27 payments of $25.00, 59 payments of $223.52 and one payment of $205.09, for a Total Loan Cost of $14,067.77. Variable rates may increase over the life of the loan.
**Borrowers and cosigners who have an available FICO® Score, may receive their score quarterly after [the first] disbursement of their loan. The FICO® Score provided to you is the FICO® Score 8 based on TransUnion data, and is the same score that Sallie Mae uses, along with other information, to manage your account. FICO® Scores and associated educational content are provided solely for your own non-commercial personal review, use and benefit. This benefit may change or end in the future. FICO® is a registered trademark of the Fair Isaac Corporation in the United States and other countries.
Sallie Mae is the nation's largest private student loan lender. With over 40 years of experience and over 30 million customers, Sallie Mae has been an industry leader for a long time, helping many students and their families save when paying for college. Sallie Mae offers competitive private student loan interest rates and benefits that some other lenders don't. Sallie Mae offers different types of private student loans. The Smart Option Student Loan, is for students currently enrolled in undergraduate or graduate coursework working towards a degree.
Multiple rates and terms apply to the Smart Option Student Loan from Sallie Mae. Variable interest rates range from 4.00% APR to 10.86%1 APR, while fixed interest rates vary between 5.74% APR and 11.85% APR.1 Both of these include a 0.25% reduction for using automatic payments during enrollment.2 Furthermore, repayment terms range anywhere from 5 to 15 years.* Potential recipients of a private loan from Sallie Mae, including the Smart Option Student Loan, may borrow up to 100% of the official cost of attendance3, and no origination or disbursement fees apply.
Several repayment terms apply to each loan: While in school, the Smart Option Loan allows recipients to choose between deferring all payments, paying $25 per month* (saves an average of 13 percent on the total undergraduate loan cost when compared to the deferred repayment option), or paying just interest (save an average of 27 percent on the total undergraduate loan cost when compared to the deferred repayment option). Six months after leaving school, principal and interest payments must start being made. If in good standing, students may request to make 12 interest-only payments after six months.7 There are no origination, disbursement, or prepayment penalties for the Smart Option Student Loan.
Some of the main benefits of the Smart Option Student Loan involve the different repayment plans plus the choice of fixed- and variable-interest loans. Those with a Sallie Mae loan have access to their free FICO Credit Score** as well. If you are interested in working with Sallie Mae, you can apply on the company's website. After you apply, Sallie Mae will run a credit check to determine if you're eligible. If you meet the initial requirements, you will be asked to upload certain documents that help Sallie Mae's underwriting team to determine if you actually qualify.
These loans are highly geared toward those currently enrolled in school. Good credit is expected for approval, but having a reliable cosigner increases the chances of approval and of getting a student loan.
4. College Ave Student Loans
LendEDU Rating (4.63 / 5.0)
- New private undergrad, graduate, and parent loans available
- Zero application fees, origination fees, or prepayment fees
- 0.25% interest reduction for automatic payments while in school
- Choose a term length of 5, 8, 10, or 15 years3
- Variable rates as low as 3.69% APR2
5.29% - 12.07%2
5, 8, 10, or 153
No origination or prepayment fees
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or Nationwide Bank, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1. As certified by your school and less any other financial aid you might receive. Minimum $1,000.
2. All rates include auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
3. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7% variable Annual Percentage Rate (“APR”): 96 monthly payments of $179.28 while in the repayment period, for a total amount of payments of $17,211.20. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
4. This informational repayment example uses typical loan terms for a graduate borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $15,000 loan that is disbursed in one disbursement and a 7.82% fixed Annual Percentage Rate (“APR”): 96 monthly payments of $255.99 while in the repayment period, for a total amount of payments of $24,574.78. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
5. This informational repayment example uses typical loan terms for a parent borrower who selects the Full Principal & Interest Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 6.83% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $114.82 while in the repayment period, for a total amount of payments of $13,778.89. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 07/1/2018. Variable interest rates may increase after consummation.
Choosing a private student loan lender can be difficult. If you need a new loan to help pay for your, or your child's, education, College Ave offers a simpler process, making it much easier to apply and obtain a private student loan. The private loans offered by College Ave fit into three different categories: Undergraduate student loans, graduate student loans, and parent student loans. These loans are offered to students currently enrolled in either an undergraduate or graduate school or to the parent of one of these students. Different interest rates apply to recipients depending on which loan they are eligible for.
- Undergraduates can choose a variable or fixed rate. Variable rates range between 3.69% and 10.94% APR2, and fixed rates range from 5.29% to 12.07% APR.2
- Graduate students can choose between a variable interest rate ranging from 3.69% and 8.89% APR2 and a fixed interest rate ranging from 5.29% to 5.29% APR.2
- Finally, rates for parents range from 4.96% to 9.94% APR2 for variable interest and 6.62% to 6.62% APR2 for fixed interest. These are some of the lowest private student loan interest rates on the market.
Both undergraduate and graduate students can choose to pay back private student loans during either 5, 8, 10, or 15-year periods at the start of full principal and interest payments. Parent loans can be paid back in any period from 5 to 12 years.
In addition to these term length options, there are five repayment options available for parent, graduate, and undergraduate student loans:
- The boldest choice is to start paying full principal and interest upon receiving the loan during school. This option saves the most money because interest does not have as much time to accrue.
- The next option is to simply pay interest every month while still enrolled at school. This is the second-most cost-saving plan.
- Students may also opt to make flat monthly payments toward their loans (payments of $25), which saves the third-most out of the four options.
- Finally, undergraduates and graduates can choose to defer all payments until graduation, in which interest accrues for the longest, resulting in the highest-cost loan (sometimes necessary, however).
- Parent loans have three different repayment options: full principal and interest; interest-only as described above; and a hybrid “interest plus” option. For the hybrid option, the borrower can choose an amount to pay, in $20 increments, over and above his or her interest-only payment each month in order to pay down the loan principal faster.
One of the best benefits of a College Ave undergraduate, graduate, or parent loan is the flexibility in payment options. Students have the option to defer or begin payments immediately with different payment options; additionally, they can choose different time periods for paying these loans. Parents can choose from three different repayments options and have a variety of time periods over which to repay, too. College Ave offers competitive private student loan interest rates, allowing the recipient to potentially spend less in interest as compared to loans from other lenders. In addition, there is a 0.25% AutoPay interest discount available if you set up a recurring payment.
Undergraduate students, graduate students, and parents of students can obtain 100 percent tuition coverage, and there are no application, origination, disbursement, or prepayment fees. The application process is extremely fast and simple, and applicants receive an immediate decision upon submission.
College Ave loans require applicants to have good credit, and having a creditworthy cosigner can greatly increase your chances of approval. College Ave offers promising options for private student loans.
5. SunTrust Student Loans
LendEDU Rating (4.53 / 5.0)
- New undergraduate, graduate, and graduate business loans available
- Principal and interest, interest-only, partial interest, and deferred payment options while in school4
- Up to 0.50% interest rate reduction for auto pay5
- Choose a term length of 7, 10, or 15 years3
- Variable rates from 3.88% to 12.88%2
- Fixed rates from 5.35% to 14.05%2
- Option to refinance existing private student loans into a new loan6
7, 10, or 153
No origination or prepayment fees
Before applying for a private student loan, SunTrust recommends comparing all aid alternatives including grants, scholarships, and both federal and private student loans.
SunTrust Bank, Member FDIC. © 2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue these programs without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and programs may not be available in certain jurisdictions.
1. The 2% principal reduction is based on the total dollar amount of all disbursements made, excluding any amounts that are reduced, cancelled, or returned. To receive this principal reduction, it must be requested from the servicer, the student borrower must have earned a bachelor’s degree or higher and proof of such graduation (e.g. copy of diploma, final transcript or letter on school letterhead) must be provided to the servicer. This reward is available once during the life of the loan, regardless of whether the student receives more than one degree.
2. Interest rates and APRs (Annual Percentage Rates) depend upon (1) the student’s and cosigner’s (if applicable) credit histories, (2) the repayment option and repayment term selected, (3) the requested loan amount and (4) other information provided on the online loan application. If approved, applicants will be notified of the rate applicable to your loan. Rates and terms are effective for applications received after 7/01/2018. The low APR assumes a 7-year $10,000 loan, with two-disbursements and no deferment. The high APR assumes a 15-year $10,000 loan with two disbursements.
The variable interest rate for each calendar month is calculated by adding the current One-month LIBOR index to your margin. LIBOR stands for London Interbank Offered Rate. The One-month LIBOR is published in the "Money Rates" section of the Wall Street Journal (Eastern Edition). The One-month LIBOR index is captured on the 25th day of the immediately preceding calendar month (or if the 25th is not a business day, the next business day thereafter), and is rounded up to the nearest 1/8th of one percent. The current One-month LIBOR index is 2.125% on 7/01/2018. The variable interest rate will increase or decrease if the One-month LIBOR index changes. One-month LIBOR will be 2.00% until 6/30/2018; rates shown use the One-month LIBOR of 2.125%, effective as of 7/1/2018.
The fixed rate assigned to a loan will never change except as required by law or if you request and qualify for the auto pay discount.
3. The 15 year term is only available for loan amounts of $5,000 or more. Payment examples (all assume a 45-month deferment period and a six-month grace period before entering repayment, and the Partial Interest Repayment option): 7 year term: $10,000 loan disbursed over two transactions with a 7-year repayment term (84 months), and a 8.468% APR would result in a monthly principal and interest payment of $199.90. 10 year term: $10,000 loan disbursed over two transactions with a 10-year repayment term (120 months) and an 8.938% APR would result in a monthly principal and interest payment of $162.92. 15 year term: $10,000 loan disbursed over two transactions with a 15-year repayment term (180 months) and a 9.423% APR would result in a monthly principal and interest payment of $136.90.
4. Any applicant who applies for a loan the month of, the month prior to, or the month after the student’s graduation date, as stated on the application or certified by the school, will only be offered the Immediate Repayment option. The student must be enrolled at least half-time to be eligible for the partial interest, fully deferred and interest only repayment options unless the loan is being used for a past due balance and the student is out of school. With the Full Deferment option, payments may be deferred while the student is enrolled at least half-time at an approved school and during the six month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date. The Partial Interest Repayment option (paying $25 per month during in-school deferment) is only available on loans of $5,000 or more. See footnote 3 for payment examples. With the Immediate Repayment option, the first payment of principal and interest will be due approximately 30-60 calendar days after the final disbursement date and the minimum monthly payment will be $50.00. There are no prepayment penalties.
5. Earn an interest rate reduction for making automatic payments of principal and interest from a bank account (“auto pay discount”). Earn a 0.25% interest rate reduction when you auto pay from any bank account and an extra 0.25% interest rate reduction when you auto pay from a SunTrust Bank checking, savings, or money market account. The auto pay discount will continue until (1) automatic deduction of payments is stopped (including during any deferment or forbearance) or (2) three automatic deductions are returned for insufficient funds during the life of the loan. The extra 0.25% interest rate reduction when you auto pay from a SunTrust Bank account will be applied after the first automatic payment is successfully deducted and will be removed for the reasons stated above. In the event the auto pay discount is removed, the loan will accrue interest at the rate stated in your Credit Agreement. The auto pay discount is not available when your payments are deferred or when the loan is in forbearance, even if payments are being made.
6. Private student loans that can be refinanced with a new SunTrust private student loan are private student loans and private consolidation loans that the student applicant used for, or to refinance loans used for, certain postsecondary expenses, not currently past due. Loans that cannot be refinanced into this loan are (1) private student loans for which the student applicant is not the primary borrower, (2) Federal student loans and (3) student loans made by an educational institution. Loans being refinanced must have been used for “qualified higher education expenses”. Qualified higher education expenses, as defined by the Internal Revenue Code, generally include tuition and fees, room and board, costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study, an allowance for books, supplies, transportation, and miscellaneous personal expenses, and a reasonable allowance for the documented rental or purchase of a personal computer.
7. The minimum loan amount is $1,001 with exceptions based on the student’s state of permanent residence, as follows: Alaska: $5,001, Colorado: $3,001, New Mexico: $2,501, Oklahoma: $5,101, Rhode Island: $5,001, South Carolina: $3,701. The maximum annual loan limit to cover in-school expenses for each academic year is determined by your school’s cost of attendance, minus other financial aid such as federal student loans, scholarships or grants, up to $65,000 for the Custom Choice Loan or up to $95,000 for the Graduate Business Loan. The loan amount must be certified by the school. In any event, the loan amount cannot cause the aggregate maximum student loan debt (which includes all student loans and certain unsecured consumer debt) to exceed $150,000 for the Custom Choice Loan or $175,000 for the Graduate Business Loan, per applicant (on cosigned applications, separate calculations are performed for the student and cosigner). If you choose the In-School Refinance Option, the maximum amount that you can refinance is subject to the aggregate maximum student loan debt limit ($150,000 or $175,000) minus the amount that you are applying for to cover in-school expenses.
8. A cosigner may be released from the loan upon request to the servicer, provided that the student borrower is a U.S. citizen or permanent resident alien, has met credit criteria, and met either one of the following payment conditions: (a) the first 36 consecutive monthly principal and interest payments have been made on-time (received by the servicer within 10 calendar days after their due date) or (b) the loan has not had any late payments and has been prepaid prior to the end of the first 36 months of scheduled principal and interest payments in an amount equal to the first 36 months of scheduled principal and interest payments (based on the monthly payment amount in effect when you make the most recent payment). As an example, if you have made 30 months of consecutive on-time payments, and then, based on the monthly payment amount in effect on the due date of your 31st consecutive monthly payment, you pay a lump sum equal to 6 months of payments, you will have satisfied the payment condition. Cosigner release may not be available if a loan is in forbearance.
9. The legal age for entering into contracts is 18 years of age in every state except Alabama (19 years old), Nebraska (19 years old, only for wards of the state), and Mississippi and Puerto Rico (21 years old). Private student loans funded by SunTrust are not available to students or cosigners who are permanent residents of Iowa or Wisconsin.
10. Principal and interest payments may be deferred while the student is enrolled at least half-time at an approved school, and during the six month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date. Any accrued but unpaid interest will be capitalized (added to the unpaid principal loan balance) when repayment of principal and interest begins. There are no prepayment penalties. Making interest only or partial interest payments during in-school deferment (including the grace period) will not reduce the principal balance of the loan.
Often scholarships and federal student loans aren't enough to cover the costs of college. This is why many banks and lenders offer private student loans to help bridge the gap. If you're looking for a private loan that fits your needs, consider seeing what SunTrust has to offer. SunTrust is expanding access to funding, so now even more families can pay for college with a Custom Choice Loan®. SunTrust offers the Custom Choice Loan for undergraduate and graduate students.
Both undergrads and graduate students may qualify for the Custom Choice Loan. Variable rates range from 3.88% to 12.88%2 while fixed rates range from 5.35% to 14.05%.2 Repayment terms for this loan include 7, 10, and 15 years.3 Students have the choice of starting repayment immediately, making interest-only payments while in school, making partial interest payments while in school, or deferring payments until 6 months after leaving school. The minimum amount to borrow for this loan is $1,001 while the maximum is $65,000. The total amount of student debt that SunTrust allows is $150,000, including all other private student loans and federal student loans.7
SunTrust offers a unique benefit to students for graduating. For both undergraduates and graduate students, SunTrust will reduce 2% of your principal balance for graduating college.1 Though this might not seem like much, when you're dealing with tens of thousands of dollars, it can really help. Another great benefit of SunTrust is that they offer a 0.50% interest rate reduction5 for making principal and interest payments through auto pay.5 Though an auto pay reduction is common, most lenders only give 0.25%.
SunTrust doesn't charge any application, origination, or prepayment fees. Additionally, SunTrust offers a cosigner release after making 36 months of on-time principal and interest payments.8 This is great for borrowers whose parents or other cosigners who are concerned about being held accountable for an extended period of time. Additionally, SunTrust offers an In-School Refinance Option that gives students the option to refinance existing private student loans into a new private student loan.6 This option combines existing student loans with the funds needed for next semester into one new loan. Lastly, SunTrust has a quick application process that can be done completely online.
To be eligible for a SunTrust student loan, the student must be enrolled at least half-time in a degree seeking program at an approved school, be a U.S. resident or permanent resident, and must be the legal age of majority (if you don't have a cosigner)9, or at least 17 years of age at the time of application if applying with a cosigner who meets the age of majority requirements in the cosigner's state of residence. If you do not have substantial credit history, you may need to apply with a cosigner to be eligible and to receive better rates. Generally, if you want the best private student loan interest rates that SunTrust offers, it can help to use a qualified cosigner.
6. Citizens Bank Student Loans
LendEDU Rating (4.55 / 5.0)
- New private undergrad, graduate, and parent loans available
- 0.25% interest reduction for automatic payments while in school3
- 0.25% interest reduction for already having a Citizens Bank account3
- Rates as low as 5.25% APR for fixed rates1
- Rates as low as 4.07% APR for variable rates1
- 5, 10, and 15 year repayment terms1
- No application, origination, disbursement, or prepayment fees
5, 10, or 15
No origination or prepayment fees
Variable rate, based on the one-month London Interbank Offered Rate ("LIBOR") published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of July 1, 2018, the one-month LIBOR rate is 2.10%. Variable interest rates range from 4.07%-12.04% (4.07%-11.94% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 5.25%-12.19% (5.25% - 12.09% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown requires application with a cosigner, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.
Borrowers must be enrolled at least half-time in a degree-granting program at an eligible institution. Borrowers must be a U.S. citizen or permanent resident or an international borrower/eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For borrowers who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank- participating school.
Please Note: International Students are not eligible for the multi-year approval feature.
The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply. Borrowers whose loans were funded prior to reaching the age of majority may not be eligible for cosigner release. Note: Co-signer release is not available on the Student Loan for Parents or Education Refinance Loan for Parents.
Borrowers must be a creditworthy U.S. citizen or permanent resident residing in the U.S. and must have attained the age of majority in their state of residence. The student whose education expenses will be paid for with the loan proceeds must be a U.S. citizen or permanent resident and must be enrolled at least half-time in a degree granting program at a Citizens Bank-participating school. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank-participating school.
Multi-year approval funds available for future use are subject to a soft credit inquiry at time of your next request to verify continued eligibility. After we make the initial Loan to you, we may refuse to allow you to take out additional loans under the multi-year approval feature, terms and conditions will be outlined in your promissory note. Please Note: International students are not eligible to receive an offer for multi-year approval.
With over $130 billion in assets and over 1,200 branches, Citizens Bank offers many options and benefits for borrowers who are looking to save money on their private student loans. Citizens Bank provides a variety of private student loans for undergraduate students, graduate students, and parents of students.
With three different sets of student loans, there is a wide variety of interest rates (APRs) associated with the Citizens Bank student loan package. There are stipulations to consider with payment plan decisions as well. Starting with the different types of payment plans, recipients may choose among making principal and interest payments upon receiving funds from the loan, making only interest payments while still enrolled in school, and deferring payments until graduation.
There are three different term lengths to choose for all three types of student loans: 5, 10, or 15 years (student loans for parents excludes the 15-year term). Interest rates are heavily dependent on the type of loan, repayment term, and payment plan.
Undergraduates looking to repay a student loan over five years can expect the lowest interest rate range. For immediate repayment or interest only payments, variable interest rates range from 3.24% - 11.09%, and deferred payment plans have a variable interest rate ranging from 5.68% - 10.33%.
For undergraduates looking to obtain a private loan from Citizens Bank with a repayment plan of 10 years, several different interest rates may apply. When choosing to immediately make principal and interest payments or just make interest payments, an interest rate ranging from 4.09% to 11.19% is applicable while the decision to defer payments until after graduation warrants an interest rate range of 5.97% - 11.85% (immediate repayment and interest only repayment); for deferred payment plans, interest rates range from 6.55% - 10.85%.
Undergraduates wanting a loan with a repayment plan of 15 years can expect interest rates for immediate repayment and variable interest only payment plans to range from 4.29% - 11.24%. Deferred payment plans have an interest rate range of 6.24% - 10.49%. Fixed interest rates range from 6.29% - 11.90% (immediate repayment and interest only repayment); for deferred payment plans, interest rates range from 6.69% - 11.05%.
Transitioning to graduate student loans, five-year payment plans for immediate repayment and interest only payment plans have an interest rate range of 3.24% - 10.44%.
Interest rates for 10-year payment lengths for grad loans for immediate repayment and interest only payment plans range from 4.09% - 10.69%; deferred payment plans have interest and a rate range of 5.81% - 10.45%. Fixed interest rates for immediate repayments and interest only payment plans range from 5.99% - 11.24%; the fixed interest rate range for deferred payments is 6.43% - 10.97%.
For 15-year payment terms on grad loans, variable interest rates for immediate repayment plans and interest only payment plans range between 4.29% - 10.89%, and deferred payment plans have an interest rate ranging from 5.82% - 10.70%. Fixed interest rates for immediate repayment and interest only repayment plans range from 6.19% - 11.45%; deferred payment plans see an interest rate range of 6.88% - 11.42% APR.
Though these are not the lowest rates in the industry, and are not as low as federal student loans, you can still consider Citizens Bank's options low interest student loans - especially when you compare them to lenders that only offer loans with interest rates over 10%.
Aside from the higher interest rates, Citizens Bank loans charges no application, origination, disbursement, or pre-payment fees with these loans. Student loan coverage varies depending on education level; for instance, undergraduates can receive up to $90,000 while graduate students are eligible for $295,000, in total. If automatic payments are made during enrollment in school, a 0.25% interest rate reduction may be applicable. Additionally, if a Citizens Bank student loan is acquired while the borrower currently has a Citizens Bank account, an extra 0.25% reduction is available. This overall total discount available to potential borrowers is 0.50% in interest.
If you are interested in working with Citizens Bank, you can apply on the company's website in about 15 minutes. The process is fairly straightforward and easy to do. Once you apply, Citizens Bank will run an initial credit check to determine if you may be eligible. If you meet the initial requirements, you will be asked to upload certain documents that help Citizens Bank's underwriting team determine if you actually qualify. One of the greatest things about Citizens Bank is its 24/7 customer service. The company has people standing by to help you at any point along the process, whether you are just applying or already have a loan with the company.
In addition, Citizens Bank offers some great resources to help borrowers determine what they should do. On the Student Services section of the website there is an Education Refinance Loan Calculator, a College Savings Goal Calculator, and even a calendar to track student loan payments.
These student loans apply to those with good credit, and cosigners greatly increase the chances of being approved and receiving a low interest loan. A graduate, undergraduate, or parent of a student are eligible for these loans.
7. PNC Bank Student Loans
LendEDU Rating (4.65 / 5.0)
- Undergraduate, graduate, health professions, residency, & bar study loans available
- Full, interest-only, and deferred payment choices when in school
- 0.50% interest reduction for automatic payments while in school1
- Variable rates as low as 5.03% APR1
- Zero application fees, origination fees, or prepayment fees
Up to 15
No origination or prepayment fees
Annual percentage rate (APR) is a measure of what a loan will cost and takes into account the interest rate, loan amount, repayment term and the timing of all payments. Variable rate APRs currently range from 5.03% APR to 11.23% APR. Fixed rate APRs currently range from 6.01% APR to 12.29% APR.
Get 0.50% off your interest rate with automated payments from your checking or savings account when making scheduled payments that include both principal and interest. If automatic payment is discontinued, you will no longer receive an automatic payment discount. A federal regulation limits the number of transfers that may be made from a savings or money market account. Please contact your financial institution for more information on transfer limitations on savings account.
With all of the different private student loan lenders out there, it can be hard to make a decision about which is best for you. In researching and analyzing the top lenders in the industry, we have found that PNC offers some of the best private student loans on the market. One of the things that makes PNC a solid option is that the company offers a variety of different private student loans depending on what level of school you are in. PNC offers undergraduate loans, graduate/professional loans, health and medical school loans, medical residency loans, and bar study loans.
For each of the different loans available through PNC, the borrower has the option of choosing a fixed rate loan or a variable rate loan. For all loans besides bar study loans, current variable APRs start at 5.03% and go up to 11.23%. Alternatively, current fixed APRs start at 6.01% and go up to 12.29%. For bar study loans, current variable APRs start at 4.48% and go up to 11.48% while current fixed APRs start at 6.38% and go up to 12.99%. PNC has some of the lowest private student loan interest rates in the market. Your interest rate will be determined based on your creditworthiness and other factors. These low-interest private student loans compete with federal loans for qualified borrowers.
For all of PNC's private educational loans, borrowers are given up to 15 years to repay them. They can choose, however, to pay them off as quickly as possible. Additionally, borrowers can choose three repayment options while in school: immediate repayment (full payments), interest-only payments, or deferred repayments. The first option saves the most money over the life of the loan, while deferring will cost the most as interest will accrue. Interest-only payments are recommended for people who cannot afford full payments but do not want their loan balance to increase due to accruing interest. Deferred repayment will start six months after leaving school.
Undergraduates can borrow up to $40,000 a year or $225,000 in total including federal student loans and other private student loans. Students attending graduate school or a medical/professional school can borrow up to $65,000 a year or $225,000 in total including federal student loans and private student loans. Those looking for a residency loan or a bar study loan can borrow up to $15,000 annually and have the same total limits mentioned above.
The choice of three repayment options is a benefit of PNC's educational loans. This allows borrowers to choose the repayment plan that most fits their personal situations. Another great benefit of PNC student loans is the 0.50% interest rate reduction for setting up loan payments to be automatically deducted from a checking or savings account. This is double the typical reduction of 0.25%. Also, like most other lenders there are no application, origination, disbursement, or prepayment fees with PNC loans. PNC's website provides plenty of information and resources to help you with the financial aid process and to help you understand your educational loans and some best practices for repayment.
Another benefit that PNC offers that is not offered by all lenders is a cosigner release after 48 months of consecutive on-time payments (though you must provide proof of income and pass a credit check). This means your cosigner's responsibility for your loans can be released based on an evaluation that you are able to stay in good standing on your own with repayment. Finally, PNC has a quick and easy application process that can be done completely online.
Like most other private educational loans, applying with a cosigner increases your chances of being approved and receiving a lower interest rate. Consider applying with a qualified cosigner to obtain a lower rate, which helps you save on the total cost of your loan. Overall, PNC is a good option to consider for private student loans.
To be eligible for a PNC private educational loan, you must meet the following requirements:
- Be enrolled at least half time as determined by your school
- Be a U.S. citizen or permanent resident
- Have lived in the U.S. for the previous two years
- Meet the credit criteria, or have a cosigner who meets the criteria, has two years of continuous income or employment history
- Meet the debt-to-income requirements
Private Student Loan Information
Educational loans are offered by private banks to students pursuing associate, undergraduate, and graduate degrees. Private debt is used to help college students afford the increasing average cost of college. Privately issued student loans can be used for tuition, textbooks, room and board, and all related education expenses.
Unlike federal student loans, private student loans are not offered by the Department of Education. Instead, non-federal student debt is issued by private banking institutions. There are hundreds of private student debt lenders on the market so finding the best option can be a little tricky.
Traditional banks, online lenders, credit unions, and community banks all offer student loan options to borrowers. To qualify for a private loan you must be creditworthy. This means you must have an established credit history, stable income, and be working. Ninety percent of students will need the help of a cosigner to get approved for a collegiate loan.
Typically, private student loans can be used to cover your full cost of attendance
Private Student Loan Facts
Here are some important facts about private student loans:
- 1.4 million students use private student loans each year
- The average new loan is $10,000
- 90% are originated with a cosigner
- Private student loan rates start at 2.06% for qualified borrowers
- There are hundreds of private student loan lenders
- You can apply online in about 15 minutes
Private Student Loan Application Process
Applying for the best private student loans is easy. These days, most private student loan lenders prefer that you apply online. Many of the top platforms even offer mobile-friendly applications for easy access on the go.
Here are the general steps to the private student loan application process:
- Research your costs and options to see if you need a private student loan
- Compare options using LendEDU's free comparison tool(optional)
- Choose a lender to apply to
- Fill out basic background and education information
- Have a cosigner fill out required information (if applicable)
- Upload required documents
- Wait for full approval/denial from lender
The application process is fairly straightforward. Applications usually take about 15 to 30 minutes if you are prepared. Before starting your application, collect your personal information, school information, as well as any pay stubs and personal identification documents.
It's not uncommon to need a cosigner to get approved. This is often the case, as most students do not have the creditworthiness or credit history required to get a loan by themselves. After the student has filled out their portion of the application, the student can add a cosigner.
At this point, the cosigner will be asked to complete his or her portion of the application. After you submit the application, the private lender will pull your credit file alongside your cosigner’s credit file. Your application will then be sent to the lender’s underwriting team. Within a few hours or days you will hear back regarding the status of your application. You may be asked to electronically upload supporting documents such as a driver’s license.
After you’ve been approved for a private student loan, you will need to sign the promissory note. By signing the promissory note, you enter into a legally binding contract to repay your student loan debt in full plus any interest.
Once you’ve signed the promissory note and uploaded all supporting documents, your private student loan will be disbursed directly to your school.
Private Student Loan Eligibility Requirements
Qualifying for private student loans has become more challenging in recent years, particularly after the recession of 2008 to 2009. Private student loans now require all borrowers to meet certain eligibility requirements. The biggest requirement is that applicants be creditworthy. Lenders will consider a number of factors to make a decision about whether to approve a loan, examining an applicant’s credit score, assets, debt, income, and even chosen college or university and proposed field of study.
Each lender has its own specific requirements for determining whether to approve an applicant for a private student loan. Generally, a borrower must have at least an average credit score of close to 700 (on a scale of 300 to 850). Otherwise, you'll likely need a cosigner to qualify for a private student loan. The majority of private student loans issued today have cosigners as most applicants are young adults or teenagers who do not have a credit history or are not considered to be a good credit risk.
How a Cosigner Helps
A cosigner is a person who signs a loan agreement along with the primary borrower. The cosigner agrees to pay the loan if the borrower cannot do so, regardless of the reason (including unemployment, death, or disability). A cosigner is taking a significant risk in agreeing to sign a student loan, as his or her credit score will be negatively impacted by a missed or late payment, and because he or she will become responsible for the debt if the primary borrower goes into default. A cosigner is usually a family member or close friend with a good credit score. Many lenders do offer cosigner release programs, however, where the primary borrower can have the cosigner released from the loan by making a certain number of on-time payments after graduation.
Benefits of Using a Cosigner
- More likely to be approved
- Receive a lower interest rate
- Have someone to motivate you to stay on top of loans
- Cosigner may be discharged later through refinancing
Risks of Using a Cosigner
- Credit of primary borrower and cosigner will both be affected if payments are missed
- Cosigner's retirement could be delayed
- Cosigner will be required to make payments if primary borrower does not
As mentioned earlier, most students will need the help of a cosigner to get approved for a private line of collegiate credit. Cosigners can also help you get the lowest private student loan interest rates that a lender offers.
A cosigner can be any creditworthy adult willing to accept responsibility for the loan in the case that the primary borrower does not make payment. Cosigners are usually parents or grandparents, but virtually anyone can cosign a loan.
Cosigners should know that their credit may be affected if the primary borrowers do not repay their loans. Late payments and missed payments will also affect the credit of the cosigners. Also, creditors will look to collect from the cosigner if the primary borrower falls well behind on their payments. In some cases, cosigners may be left on the hook even if the student passes away or becomes seriously disabled.
Cosigning private student debt in not a simple decision. Cosigners need to consider their own financial objectives and circumstances before signing that promissory note. After graduation, the process of student loan consolidation and refinancing may allow a cosigner to be released.
In general, cosigners will need to make at least $25,000 annually and have good credit (above 680 FICO score). Moreover, cosigners must not have a debt-to-income ratio above 40 percent. A cosigner's credit will be checked during the application process.
In addition to having a good credit score, most banks also require that applicants for private student loans be U.S. citizens or either permanent or temporary resident aliens. Unlike federal student loans, private student loans typically do not require students to be enrolled for any set number of credit hours. Private student loans can also be used for any educational expense, which may include rent, clothing, parking passes, or even travel.
Ultimately, qualifying for a private student loan as a borrower will depend on your creditworthiness. If you have a high credit score and a decent income of at least $25,000 per year, then you may be approved for a private student loan without a cosigner. Otherwise, you will likely need a cosigner in order to be eligible for a private student loan.
>> What Next? Check if your eligible for a private student loan
Private Student Loan Interest Rates
3.62% - 12.99%
4.75% - 12.99%
Private student loans come in many shapes and sizes. Private student loan interest rates are determined by the private lenders issuing the loans. Rates can start as low as 2 percent for very qualified borrowers. For others, rates can be as high as 12 percent or more. Unlike federal student loans, privately issued credit can be customized to fit the financial objectives of the student. Most public banks allow students to select a variable or fixed interest rate.
Fixed interest will have a constant rate for the lifetime of the loan. For example, if you receive a 6 percent fixed rate, you will be responsible for paying 6 percent in interest each year for the life of the loan. Fixed rates usually start well above variable rate options. As a rule of thumb, fixed interest rates start about 1.5 percentage points above variable interest rates.
In contrast, variable interest rates fluctuate over the lifetime of the loan. Variable rates usually start well below fixed interest rate options. Why? Well, variable interest rates move with market interest rates. If market interest rates go up, variable rates will also increase. If market interest rates go down, variable interest rates will also decrease. Variable rates are usually based off the LIBOR interest rate index.
It is up to you to choose either a variable or fixed private student loan interest rate. Each option has its benefits, and potential risks. After you’ve been approved for an educational loan, you will make the final decision on the type of rate you would like.
>> What Next? Compare private student loan interest rates
Once you’ve been approved for a private student loan, the lender will verify your enrollment and cost of attendance with your school.
In general, private educational debt is disbursed directly to the school. These funds will then be credited to your account at your school. If there is money left over, the school will issue you a check for the difference. Some schools even allow students to electronically transfer extra funds to their bank accounts.
Most private student loan lenders give you a choice of a few repayment options while you are in school. Popular options include:
- Full deferment
- Interest only
- Interest and principal
- Flat payment
Depending on the option you select, you may be required to make payments while you are in school. Most students choose to defer all of their payments during school. This means no student loan payments are required while you are taking classes.
That being said, students who elect to pay interest only payments during school will save thousands of dollars on average. By paying your interest in school, you avoid compounding interest charges.
Furthermore, many lenders even offer discounts if you make payments while you are in school. Depending on the option you select, this may be a requirement.
The best private student loans often come standard with 10- or 15-year term lengths. Your term length is the period of time you choose to repay your loan. The longer the term length, the lower your monthly payment, and higher your interest rate. The opposite is true for short term lengths.
If you opt to defer your loan payments, you will have a short grace period after you graduate. After your deferment period ends, you will be required to make monthly principal and interest payments. Reputable lenders will not charge you fees to make additional principal payments. So if you want to pay off your private student loans quickly, you can do so without additional fees.
Making payments is easy. Most students elect to make their payments electronically. Most lenders offer a 0.25% discount for making electronic payments. Setting up electronic payments is easy and can be done in less than 15 minutes.
Private Student Loan Servicers
Student loan servicers are your main point of contact regarding your loans. Your servicer will:
- Accept your payments
- Help decide optimal repayment plans
- Assist you with any general questions regarding your loans
- Help you in times of hardship
Student loans can be complex. From private student loan interest rates to loan terms to the companies that handle your loans, it can be confusing to know exactly what is going on. Communicating as needed with your loan servicer can help to ensure that you stay current on your private student loans and manage your debt in the best possible way.
Student loan servicers work on behalf of the bank or private lender that provided the money for your education. The loan servicing company essentially makes sure that your loans are being paid by collecting and keeping track of your payments. They work with you to help them stay on top of your student loan debt.
If deferment or forbearance is an option under the terms of your private student loans, you will need to talk directly to your student loan servicer — not the lender — to discuss applying for these plans. When you apply for a private student loan, you are assigned a loan servicer by the lender.
Finding out who services your private student loans can be as simple as looking at bills that may come in the mail each month. If you do not receive paper bills from your student loan lender, you can find out who services your student loans by requesting a copy of your credit report. You are entitled to a free credit report each year, which you can obtain from one of the three major credit reporting agencies.
You can use the servicer’s website to determine how much debt you have, how much interest has accrued, and to make sure that you are on top of your payments. You can also contact your servicer to discuss issues that you may be having.
For example, if you recently have become unemployed, you can contact your servicer to discuss forbearance or deferment options for your private student loans.
Working with private student loan servicers can require a fair amount of patience and attention to detail. Student loans can be complex, especially because many borrowers have more than one. Many students have had difficulty working with their student loan servicers in the past, complaining that payments have not been credited to their accounts or that paperwork has gone missing.
Working with student loan servicers requires that borrowers keep careful records of all payments made and that they maintain composure during contact with their servicers. Keep careful notes of all conversations that you have and make a note of who you speak to and when you speak to them.
Always be polite and courteous when on the telephone with your student loan servicer. Be sure to have copies of your student loans on hand, which can be obtained directly from your student loan lenders. If you do not have copies of your loans and other documents regarding your accounts, request them from the servicer or the lender.
Your private student loan servicer acts as the middleman between you and your borrower. Maintaining a good relationship is often critical to keeping your private student loans in good standing and ensuring that you can pay off your student loans in a timely fashion. If you do have concerns about how your student loans have been serviced, consider contacting the Consumer Financial Protection Bureau to register a complaint.
Differences Between Federal Student Loans and Private Student Loans
|Federal Student Loans||Private Student Loans|
|Given by the federal government.||Given by a private institution such as a lender, bank, or credit union.|
|Always have a fixed interest rate.||Can have a fixed or variable interest rate.|
|Repayments are not required until after graduation.||Repayments may be required while in school or not until after graduation.|
|Loans are based on the FAFSA and Expected Family Contribution.||Loans are based on the creditworthiness of the students and their cosigners, if applicable.|
|You do not need a cosigner.||Most private lenders require a cosigner.|
|Loans are based on the FAFSA and Expected Family Contribution.||Loans are based on the creditworthiness of the students and their cosigners, if applicable.|
When it comes to paying for college, most students will have to take on some form of debt. There are two forms of loans that most students will consider: federal and private student loans. Understanding the difference between these two types of loans — including the advantages and disadvantages of each — is the key to making a smart choice about your financial future.
Federal Student Loans
Federal student loans are generally considered to be the best option for most students. They offer a variety of protections for borrowers, such an income-based repayment plans, forbearance, and loan forgiveness if you work in certain fields.
Federal student loans are not based on credit worthiness and do not typically require a cosigner. Federal student loans are offered at a fixed interest rate, have specific limits on the amount that can be borrowed each year for undergraduate and graduate school, and a lifetime limit on total borrowing.
Federal Student Loan Benefits
There are a number of different types of federal student loans, each of which has its own benefits. Direct subsidized loans, also known as subsidized Stafford loans, are for undergraduate students with a demonstrated financial need. Borrowers are not responsible for any interest that accrues while they are still in school.
On the other hand, unsubsidized Stafford loans are available to both undergraduate and graduate students. These loans are not based on financial need, and they do accrue interest while borrowers are in school.
Other Types of Federal Student Loans
In addition, the federal government offers PLUS loans to graduate and professional students and to parents. These loans are based on a borrower’s credit score. Grad PLUS loans do not have limits and can be used to pay for either graduate or professional loads.
Similarly, Parent PLUS loans can be taken out by parents to pay for undergraduate education for dependent children. There is no limit on the amount of money that can be taken out for these loans, but parents must have a solid credit history to qualify.
Risks of Private Student Loans
- Generally higher interest rates than federal student loans
- Fewer benefits than federal student loans
- Interest generally accumulates while student is still in school
- Cannot be discharged in bankruptcy
- Credit will be damaged if payments are missed
Students should always use federal student loans and other forms of financial aid before considering student loans offered by a private bank. Before signing that promissory note, you should know that privately issued student debt does have risks.
Like other types of loans, privately-issued educational credits do need to be paid back with interest. If you elect to defer your student loan payments while you are in school, the interest owed will accumulate and be added to the balance of the loan. If you let you interest accumulate and capitalize for too long, you might find yourself owing much more than you had originally planned.
Soon after graduation, you will be required to start the repayment of your loans. If you cannot repay your college debt you put your credit at risk. Missed payments or late payments equates to negative marks on your credit. Before taking out student loans of any kind, you should judge your ability to repay your debt after graduation.
Unlike other types of consumer debt, privately-issued financing cannot typically be discharged during bankruptcy, which means it's nearly impossible to escape privately-issued debt.
Federal student loans come with many built-in borrower protections such as income-based repayment. Private student loans usually have no income-based repayment options nor forgiveness options.
Best Private Student Loans for Parents
Many parents start saving for their child's education before the child can speak. Starting early is definitely a smart strategy and the earlier you start, the more likely you are to save up. Often, however, parents cannot fully cover the cost of a higher education with this saved money in addition to their incomes.
When parents still want to support their child's education, they might choose to take out loans in their own names. This way, the child will not have to graduate with debt and can start their real financial career in the green.
There are many lenders who allow parents of students to take out loans in their own names as opposed to just having them cosign on a loan in the name of their child. Furthermore, taking out a private loan as a parent may provide better interest rates as compared to having a student take one out, even if a parent cosigns.
The process of applying for and receiving private student loans as a parent is, in most cases, the same that a student would go through. Parents still need to submit paperwork to the lenders so they can pull their credit.
Like when a student takes out a loan, the funds will typically be sent directly to the school. This is done so the funds are only used for school purposes and nothing else.
Other Private Student Loan Companies
CommonBond Student Loans
CommonBond is an online lender that started in 2011 by offering student loan refinance options. They have since branched out to offer private student loans as well. The company was founded by three Wharton MBA grads who wanted to make the student loan lending experience cheaper and more seamless for borrowers.
With CommonBond, you can save a significant amount of money on your student loans with its low loan rates. You can borrow up to the cost of attendance at your school.
They offer great low fixed interest rates that start at 3.40% and go up to 9.21% APR. How much you will pay depends on your cosigner’s personal credit and financial situation. That’s because, unlike other private student loans which will lend to students if they have a high enough credit score, you absolutely must apply with a qualified cosigner. However, the good news is that they offer cosigner release. After just two years of on-time payments your cosigner can be removed from the loan. The term lengths on their loans are 10 years.
CommonBond charges a 2 percent origination fee, which is included in its calculated APR. It has no other prepayment or application fees. Among similar online private student loan lenders, charging an origination fee is somewhat rate, but despite this its rates are still competitive so long as you qualify for a rate at the lower end of the spectrum. If your cosigner has bad credit, you might still qualify for a loan, but you could be paying a much higher rate.
Applying is straightforward and only takes a few minutes. You fill out an online application by sending a few details about yourself. If you’re approved, they’ll ask you for some personal documents and also contact your school to verify your enrollment and your cost of attendance. They’ll then disburse your loan to your school’s financial aid office.
There are a number of great benefits of getting a CommonBond student loan. The first is that they offer relatively low fixed rates. That means that the amount you pay will never change over the life of your loan.
While they do require a cosigner, they also offer cosigner release after just two years of on-time payments, which is a shorter term than many other student loan lenders.
They also offer you the opportunity to postpone your payments if you experience financial difficulties. They support you until you get back on track.
In addition, CommonBond has award-winning service and their application process is both quick and easy. The last thing you want to do is spend forever on the phone trying to contact an unhelpful customer service agent or spend hours filling out a student loan application. Finally, CommonBond operates on a 1-for-1 system where they provide education for a child in the developing world for every student loan they give out.
Despite the fact that there are many great benefits to CommonBond student loans, there are also some drawbacks. While their 2 percent origination fee is included in their calculated APRs, there are other lenders who offer lower rates – perhaps because they do not have origination fees.
They also require a cosigner and do not provide student loans with alternative lending criteria such as your grades, leadership skills, or future career. This could be a problem for students who don’t have friends or family members who are willing or able to co-sign a student loan for them.
CommonBond student loans are an attractive student loan option. It is extremely easy to apply for a CommonBond loan and they have great customer service. They also have low fixed rates on their loans. Despite this, it might be difficult for you to get approved for a CommonBond loan given their cosigner requirements. If you can get approved, they are a great option and also allow you to feel good about paying your student loans since they help sponsor a child’s education in a developing country for every loan that they disburse.
Raise Student Loans
Raise Student Loans is an online lender that is the student loan arm of Cognition Financial Corporation. The company began in 2001 and is based in Boston, Massachusetts. They provide flexible loan options for borrowers.
Raise offers private student loans with variable interest rates. Their variable rates start as low as 5.58% and go as high as 15.98%. The initial rate you’ll pay will depend on either you or your cosigner’s personal financial and credit situation. After that, your rate will fluctuate based on interest rates, but your rate will never go higher than 16%.
Unlike some undergraduate student loan lenders which default to 10-year loan terms, Raise offers loan terms of 5 years, 7 years, and 10 years. If you expect to repay your student loan quickly, this allows you to save money on your interest rate since shorter terms get lower rates. They have no origination or prepayment fees.
They also allow you to choose between immediate repayment on your loan or interest-only repayment. With immediate repayment, you start making monthly payments on the principal and interest within 30 to 60 days of your loan disbursement. If that’s not what you want, you could choose interest-only repayment, which means that you’ll make monthly payments while you’re in school but that you’ll only pay interest. They do not have an option that will defer the payments on your loan until after you graduate like most private student loans do.
They often require that borrowers have a cosigner since they make their loans based on your personal financial and credit history. Since most college students don’t have a high income and have either no credit score or a low credit score, having a cosigner with good credit and a well-paying job will increase your odds of getting approved and lower your interest rate. They run a hard credit check with your initial application.
To qualify for a loan from Raise Loans, all you have to do is fill out a short online application. The application takes only a few minutes and gives the company permission to pull your credit. They then provide you with a loan offer and you can configure your loan options to suit you including things like loan terms and repayment types. You then confirm your details by sending them documentation and they verify your loan with your school. After that, you accept the loan and they send the funds to your school.
There are a number of great benefits from getting a Raise student loan. For example, they have a lot of flexibility on their term lengths allowing you to potentially get a lower rate by choosing a shorter term length. They also encourage you to repay your loans while in school, which could work for you - especially if you’ve got a well-paying part-time job. Since this encourages you to repay your loans faster, you’ll save money on interest over the life of your loan.
Despite the benefits of Raise Loans, there are a number of drawbacks. Their private student loans have relatively high maximum interest rates and they also are variable rate loans which means that their rates could increase over the life of your loan. The requirement of repaying at least the interest on your loan while you’re in school could also be difficult for many college students who struggle to make ends meet.
Finally, they only offer loans to those who attend a list of eligible schools. They also don’t offer loans nationwide. They only disburse loans to borrowers who are residents of the following states: Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, South Carolina, Tennessee, Texas, Washington or West Virginia. Your cosigner must not be a permanent resident of Wisconsin.
While Raise student loans offers some great flexibility in their loan options, they offer higher rates than other lenders without added benefits. They also require that you begin repayment right away which might be difficult for many students.
SixUp Student Loans
SixUp is a student loan company that was started by first-generation college students and immigrants. The founders grew up in low income households and were raised by single parents. They struggled to find student loan financing and wanted to make it easier for other students like them. So, they started SixUp a student loan lender that makes credit decisions based on you and your potential, rather than just your credit score.
SixUp is an online student loan lender that looks at a set of alternative criteria in order to make lending decisions. They don’t typically require a cosigner, even if you don’t have a credit score or you have a low credit score. While they do take your credit into account when deciding whether to approve your application and how much you’ll pay, low or no credit won’t necessarily disqualify you from getting a loan. Instead, they also look at your grades and the college that you’re attending in order to make their lending decisions.
SixUp offers loans of between $2,500 and $15,000 per school year - up to a maximum of $60,000. They offer both fixed rate and variable rate loans. Their fixed interest rate loans range from 6.49% to 9.49%. Their variable interest rate loans start between 5.61% and 9.61%. The amount that you will pay depends on you, your academic record, and what school you attend. With variable rate loans, your rate also depends on fluctuations in interest rates.
SixUp does not charge fees if you repay early or to apply. However, they do charge a 1% origination fee. They also require that you pay $20 a month while in school and for six months after you graduate. This helps you establish your credit history and ensures that you don’t owe as much once you start repayment since it helps prevent some recapitalization of your interest or the growth of the balance of your debt while you’re in school.
In order to apply, you fill out a quick online application. To do so, you need your personal information, as well as a transcript from high school or college, your financial aid award letter, and information about your existing personal debt or student loan debt.
There are a number of great benefits from choosing SixUp. It can be very difficult for children in low-income families to get private student loans because often their parents do not qualify as cosigners and they don’t know anyone else who could co-sign for them. For that reason, many of these students are unable to attend college or have to go to much cheaper schools. A lender like SixUp that looks at your potential instead of your credit score, means that more students are able to apply for and get private student loans.
Even if your parents could qualify as cosigners, there are a number of reasons why they might not want to be. For example, if your parents are considering buying a home, co-signing your student loans could impact their debt-to-income ratio and limit the amount that they could take out via a mortgage. Or if you die or become disabled, they could be responsible for your loan.
Another benefit of SixUp student loans is that they encourage students to make minimal payments while in school to build up their credit history and ensure that they reduce the amount of interest that they’ll pay over the life of their loan.
One of the big downsides of SixUp student loans is that they are only offered in certain states. You must be a resident in Arkansas, Florida, Georgia, Massachusetts, Nebraska, New Mexico, North Carolina, Oregon, Texas, Virginia, or West Virginia to qualify. Their ideal candidate is also a Pell grantee, a first-generation college student, or another underserved student. These qualifications limit who could potentially apply for and qualify for a SixUp student loan.
They also have relatively high interest rates compared with other private student loan options that require cosigners. While these are lower than other student loan options that do not require cosigners, it’s important that you consider the added cost before choosing to take out a SixUp student loan.
SixUp provides something that wasn’t widely available previously – the ability to take out student loans without a cosigner if you don’t have perfect credit. While their rates are higher than other lenders, they are making post-secondary education accessible for those from low-income families.
LendKey Student Loans
LendKey offers products from local not-for-profit credit unions. This model allows the company to offer great rates and benefits.
Because LendKey is essentially a collection of independent credit unions, there are no firm rates and repayment terms offered on the website. They do say, however, that private student loan interest rates start as low as 4.51% APR (including a 0.25% auto-pay discount) and go as high as 9.69% APR.
When applying for a private student loan with LendKey, borrowers may receive interest rate discounts for good academic performance.
LendKey charges no application, origination, or prepayment fees.
LendKey's specific rates and term lengths will vary based on which credit union you are matched with.
As mentioned, many of LendKey's credit union partners will offer an interest rate discount for good academic performance. Additionally, LendKey will reduce your interest rate by 1 percent once you enter repayment and have repaid 10 percent of the loan. These are both great benefits that not many other lenders offer.
Another benefit of LendKey's credit union partners is that many of them offer cosigner release after some amount of on-time, full payments.
The last great benefit of LendKey is the company's fast application process. It only includes 3 steps and takes approximately 15 minutes. First, they will check your eligibility and show a list of your matched lenders. After you choose a lender, you will continue on to finish the application process. After that, you will have to verify your identity, upload a transcript (besides first semester freshmen) and some other documents. After that, LendKey reviews your documents and looks at your credit history and lets you know if you are approved for a private educational loan.
Because LendKey works with a variety of different lenders, reviews you may find on the internet may be different than your personal experience. When applying through LendKey, try and look up specific reviews of the lenders that you are matched with.
LendKey's private student loans are great for people looking for:
- A variety of lender options
- Unique benefits and discounts
- An individual experience
- Rates start as low as 4.51% APR with auto-pay
- 0.25% auto-pay discount
- Cosigner release available
- Interest rate reductions for good grades
- No application, origination, disbursement, or prepayment fees
- 1% interest rate reduction after 10% of loan is repaid