Best Private Student Loans for 2021

Mike Brown
Updated: January 15, 2021

Many or all of the companies featured provide compensation to LendEDU. These commissions are how we maintain our free service for consumers. Compensation, along with hours of in-depth editorial research, determines where & how companies appear on our site.

Private student loans can be used to pay for college after you’ve exhausted all of your scholarship, grant, and federal student loan options.

If you already filled out the FAFSA to see what other aid you qualify for, the next step is to compare private student loans to find the lowest interest rate.

To help you do this, we researched and analyzed lenders to find the best private student loans available today. Having a good credit score or creditworthy cosigner can increase your chances of being approved and qualifying for the lowest rates.

Compare the Best Private Student Loans

Lender Fixed APR Variable APR Repayment Terms APR Range
College Ave Student Loans

0.00%20.00%2

Fixed APR

0.00%20.00%2

Variable APR

5, 8, 10, or 15

Repayment Terms

0.00% – 0.00%

APR Range

What we like

  • Get prequalified for a loan, and see what interest rates you can personally expect, without any impact to your credit score
  • Choose between full, interest-only, flat, or deferred payments while in school
  • A grace period of up to 12 months if approved for an additional six

Additional Information

See our College Ave Student Loans Review and Important Disclosures

Servicer University Account Services (UAS)
Loan amounts $1,000100% of school-certified cost of attendance
Minimum credit score Not disclosed
Minimum income $35,000 per year
Fees Late payment fee of 5% of the unpaid monthly payment or $25, whichever is less, if payment isn’t made within 15 days of the due date
Sallie Mae

0.00% – 0.00%

Fixed APR

0.00% – 0.00%

Variable APR

5 – 15 years

Repayment Terms

0.00% – 0.00%

APR Range

What we like

  • Multi-Year Advantage lets borrowers get the money they need year after year
  • Four months of free Chegg ($100 value)
  • Wide range of repayment terms available

Additional Information

See our Sallie Mae Review and Important Disclosures

Servicer Sallie Mae
Loan amounts $1,000100% of school-certified cost of attendance
Minimum credit score Not disclosed
Minimum income Not Disclosed
Fees Late payment fee of 5% of the past due amount or $25; whichever is less
Earnest

0.00%0.00%

Fixed APR

0.00%0.00%

Variable APR

5, 8, 10, or 15

Repayment Terms

0.00%0.00%

APR Range

What we like

  • An eligibility check with no impact on your credit score
  • No fees
  • Skip one payment once per year

Additional Information

See our Earnest Student Loans Review and Important Disclosures

Servicer Earnest
Loan amounts $1,000100% of school-certified cost of attendance
Minimum credit score 650
Minimum income Not disclosed
Fees None
Custom Choice

0.00%0.00%

Fixed APR

0.00%0.00%

Variable APR

5, 10, or 15 years

Repayment Terms

0.00%0.00%

APR Range

What we like

  • Get prequalified for a loan without any impact to your credit score
  • Choose between full, interest-only, flat, or deferred payments while in school
  • 2% principal reduction per loan with proof of graduation
  • No fees

Additional Information

See our Custom Choice Review and Important Disclosures

Servicer American Education Services (AES)
Loan amounts $1,000$99,999 ($180,000 aggregate)
Minimum credit score 625
Minimum income Not disclosed
Fees None
Ascent

0.00%0.00%

Fixed APR

0.00%0.00%

Variable APR

5, 10, or 15 years

Repayment Terms

0.00%0.00%

APR Range

What we like

  • Get prequalified for a loan without any impact to your credit score
  • Multiple forbearance periods
  • 1% cash back upon graduation

Additional Information

See our Ascent Student Loans Review and Important Disclosures

Servicer Launch Servicing LLC.
Loan Minimum $1,000$200,000
Minimum credit score 540 for borrowers with a cosigner who has a credit score of 740 or higher, otherwise must have a minimum credit score of 600
Minimum income $24,000
Fees Late payment fee of 5% of the past due payment after ten days late. The minimum late fee is $5; the maximum is $25
SoFi

0.00%0.00%

Fixed APR

0.00%0.00%

Variable APR

5, 10, or 15 years

Repayment Terms

0.00%0.00%

APR Range

What we like

  • Get prequalified for a loan without any impact to your credit score
  • A 0.125% rate discount to SoFi members
  • Up to $360 when your student loan is funded
  • Career coaching

Additional Information

See our Ascent Student Loans Review and Important Disclosures

Servicer MOHELA
Loan amounts $5,000100% of school-certified cost of attendance
Minimum credit score Not disclosed
Minimum income None
Fees None
LendKey Student Loans

0.00% – 0.00%

Fixed APR

0.00% – 0.00%

Variable APR

5, 10, or 15

Repayment Terms

0.00% – 0.00%

Estimated APR

What we like

  • Get prequalified for a loan without any impact to your credit score

Additional Information

See our LendKey Student Loans Review

Servicer LendKey
Loan Minimum $1,000100% of school-certified cost of attendance
Minimum credit score 660
Minimum income $24,000
Fees Late payment fee of $5 or $15, depending on the lender, after payment is 15 days late

7 Best Private Student Loans

With so many private student loan lenders out there, it can be difficult to decide which is the best for you. To help solve this problem, we researched and analyzed lenders to find the best options for specific situations.

The following companies are LendEDU partners who have been extensively vetted by our Editorial Team. Our partners update us of any product changes, so we can be sure to keep the information on this page accurate for our readers. Note that these lenders don’t represent all of the options available to you.

Click a lender’s name to jump down to that section:

  • Best overall: College Ave
  • Best for flexible repayment: Sallie Mae
  • Best for no fees: Earnest
  • Best for earning a reward upon graduation: Custom Choice
  • Best for multiple forebearance periods: Ascent
  • Best for working with local banks and credit unions: LendKey
  • Best for customer benefits: SoFi

College Ave

Best for: Overall

College Ave Student Loans

Editorial Rating (5.0 / 5.0)

  • Get prequalified for a loan, and see what interest rates you can personally expect, without any impact to your credit score
  • Choose between full, interest-only, flat, or deferred payments while in school
  • A grace period of up to 12 months if approved for an additional six
Variable rates

0.00%20.00%2

Fixed rates

0.00%20.00%2

Repayment terms

5, 8, 10, or 15 years

Loan amounts

$1,000100% of school-certified cost of attendance

College Ave is our top-rated private student loan lender offering loans that can cover up to 100% of your cost of attendance, including tuition, fees, books, housing, transportation, and more.

Prospective borrowers can prequalify and see what interest rates they may receive with no impact on their credit score. Applying for a loan can be completed in three minutes.

Borrowers can defer payments until after school or choose between making full, interest-only, or flat $25 payments while in school. The standard six-month grace period may be extended by an additional six months by applying and receiving approval.

>> CHECK RATES AT COLLEGE AVE


Sallie Mae

Best for: Flexible repayment

Sallie Mae

Editorial Rating (4.62 / 5.0)

  • Get prequalified for a loan, and see what interest rates you can personally expect, without any impact to your credit score
  • Four months of free Chegg ($100 value)
  • Wide range of repayment terms available
Variable rates

0.00% – 0.00%

Fixed rates

0.00% – 0.00%

Repayment terms

5 – 15 years

Loan amounts

$1,000100% of school-certified cost of attendance

Sallie Mae is one of the largest private student loan companies in the country. The company began in 1972 as a government-sponsored organization, but in 2004 became fully privatized.

Some benefits include offering loans to non-U.S. citizens with a U.S. citizen or permanent resident as a cosigner, offering loans to part-time students, and offering the shortest cosigner release period of all companies reviewed.

Sallie Mae was determined to be the best for flexible repayment due to its wide range of repayment terms. Borrowers can defer payments until after school or choose between making interest-only or fixed $25 payments while in school. Unfortunately, prequalification is not available. To see rates and loan options, the company must conduct a hard credit check.

>> CHECK RATES AT SALLIE MAE


Earnest

Best for: No fees

Earnest Student Loans

Editorial Rating (4.77 / 5.0)

  • An eligibility check with no impact on your credit score
  • No fees
  • Skip one payment once per year
Variable rates

0.000.00

Fixed rates

0.000.00

Repayment terms

5, 10, 15

Loan amounts

$1,000100% of school-certified cost of attendance

Earnest is our top-rated lender offering no fees on student loans. This means no origination, late payment, or prepayment fees, letting borrowers stay focused on repaying their principal and interest.

Other benefits include getting your choice of repayment, including choosing between making payments every two weeks or monthly, skipping a payment once a year, and a grace period that is 50% longer than most other lenders.

Flexible repayment plans include your choice between five term lengths during repayment and deferring payments until after school or making interest-only or fixed $25 payments while in school. Earnest offers an eligibility check that will not impact your credit score.

>> CHECK RATES AT EARNEST


Custom Choice

Best for: Earning a reward upon graduation

Custom Choice

Editorial Rating (4.58 / 5.0)

  • Get prequalified for a loan without any impact to your credit score
  • Choose between full, interest-only, flat, or deferred payments while in school
  • 2% principal reduction per loan with proof of graduation
  • No fees
Variable rates

0.000.00

Fixed rates

0.000.00

Repayment terms

7, 10, or 15 years

Loan amounts

$1,000$99,999 ($180,000 aggregate)

Custom Choice has over 25 years of experience facilitating more than $23 billion in private student loans for lenders and schools. The company has helped more than one million families pay for their education.

Custom Choice is our highest rated lender offering a reward for borrowers who graduate. This reward is a 2% principal reduction per loan after showing proof of graduation.

Borrowers have the option to defer payments until after school or make full, interest-only, or flat $25 payments while in school. Prequalification is available and can be completed within minutes with no impact on your credit score.

>> CHECK RATES AT CUSTOM CHOICE


Ascent

Best for: Multiple forbearance periods

Ascent Student Loans

Editorial Rating (4.38 / 5.0)

  • Get prequalified for a loan without any impact to your credit score
  • Multiple forbearance periods
  • 1% cash back upon graduation
Variable rates

0.000.00

Fixed rates

0.000.00

Repayment terms

5, 7, 10, 12, or 15 years

Loan amounts

$1,000$200,000

Ascent is a private student loan lender that provides access to higher education funding for an expanded population of undergraduate and graduate students while encouraging the financial wellness of students and their families.

The company offers cosigned and non-cosigned loans that provide more opportunities for students to qualify for a loan. Prospective borrowers can prequalify for a loan without any impact to their credit score.

Some Ascent benefits include a 1% cash back reward upon graduation and up to 24 months of forbearance over the loan's life.

Borrowers can defer payments until after school or make interest-only or $25 fixed payments while in school.

>> CHECK RATES AT ASCENT


SoFi

Best for: Customer benefits

SoFi

Editorial Rating (4.28 / 5.0)

  • Get prequalified for a loan without any impact to your credit score
  • A 0.125% rate discount to SoFi members
  • Up to $360 when your student loan is funded
  • Career coaching
Variable rates

0.000.00

Fixed rates

0.000.00

Repayment terms

5, 10, or 15 years

Loan amounts

$5,000100% of school-certified cost of attendance

SoFi is our pick for the lender offering its customers the most benefits. Currently, borrowers can receive $10 after checking their rate by January 31st and another $350 when their loan is funded by February 15th.

Additionally, SoFi members can receive an added 0.125% rate reduction on their interest rate, receive career coaching and unemployment protection, and pay no origination, late payment, or prepayment fees.

Borrowers have the choice to make deferred payments or immediate, interest-only, or partial $25 payments while in school. Checking your rate will not affect your credit score and can be completed in three minutes.

>> CHECK RATES AT SOFI


LendKey

Best for: Working with local banks and credit unions

LendKey

Editorial Rating (4.2 / 5.0)

  • Get prequalified for a loan without any impact to your credit score
Variable rates

0.00% – 0.00%

Fixed rates

0.00% – 0.00%

Repayment terms

5, 10, or 15 years

Loan amounts

$1,000100% of school-certified cost of attendance

LendKey partners with banks and credit unions to offer borrowers various loan options through a digital platform. Aside from offering competitive rates, the benefit of this is that these financial institutions prioritize customer service and member happiness as community banks.

Unfortunately, LendKey does not list any in-school, military, or residency deferment options and does not offer the possibility to defer payments while in school. Borrowers interested in checking their rate can do so without any impact to their credit score.

>> CHECK RATES AT LENDKEY


How We Chose the Best Private Student Loan Companies

LendEDU has rated and reviewed private student loan lenders since 2014. To find the best student loan lenders for this article, we analyzed 14 data points for our partner lenders.

Here are some of the most important data points we considered:

  • Interest rates: TThe rate on your loan has the largest impact on the total cost over time. Typically, the lower the rate you are offered, the better the loan is.
  • Term lengths: Your term length is the amount of time you have to repay your loan and affects your monthly payments. The best private lenders offer a wide range of loan terms, so you can choose one that fits your budget.
  • In-school repayment options: Most lenders allow you to make partial or full payments during school or defer your payment until after graduation. Making payments while in school—even if you are just paying the interest—will help reduce the total cost of your loan.
  • Discounts available: The most common discount offered is an autopay discount for making automatic payments. Some lenders offer additional discounts, as well, that can help reduce the cost of your loan.
  • Loan amounts: Each lender has different limits on how much you can borrow. Some will cap the borrowing limit at a certain amount, while others let you borrow up to the total cost of attendance.
  • Cosigner release: If you use a cosigner on your loan, you may be able to release them from their shared responsibility after a certain number of on-time payments.
  • Deferment options: If you decide to go back to school, enter the military, or are in a medical residency or fellowship, your lender may allow you to defer payments during this time, so you don’t have to make payments. Just be aware that interest will likely accrue during these times, which will increase the cost of your loan.
  • Forbearance options: Forbearance allows you to delay making payments if you face financial hardship. Like deferment, interest will usually still accumulate during this time, but your loan won’t enter default, and your credit score won’t be affected.
  • Initial soft credit pull availability: Some private lenders allow you to check your eligibility and receive rate quotes with a soft credit check. This won’t affect your credit score like a hard credit check and allows you to see if you are happy with your likely rate before going through the full loan application process.
  • Extra benefits and rewards: Almost every lender offers unique perks to borrowers, such as rewards for graduating, flexibility in repayment, and career coaching.
  • BBB rating: We checked each lender’s credibility with the Better Business Bureau to ensure they were reputable companies with no or minimum complaints.

Private Student Loan FAQs

Here are some of the most common questions we receive when it comes to private student loans. Click a question to jump down to it or keep scrolling to read them all.


What can a private student loan be used for?

In most cases, college students can use private student loans for any costs associated with their higher education. These often include tuition, room and board, books, computers, and even living expenses like food.

Typically, lenders will send your student loan money directly to your college. First, the money will be used for mandatory expenses like tuition. Then, your college will give you any leftover money for you to use how you see fit.


When should I apply for a private student loan?

There is no set time in which you can apply for private student loans. If an unexpected expense comes up in the middle of a semester and you need some extra money to help pay for it, you can apply for a new loan.

It can, however, take anywhere from a week to up to two months for colleges to receive your loan funds. If you need the money for a mandatory expense like tuition, make sure that you leave enough time to get through the process.

We also recommend waiting to use private loans until you’ve exhausted all other financial aid options including scholarships, grants, and federal student loans.


What are the eligibility requirements? Do I need a cosigner? What if I have bad credit?

Each lender has its own eligibility requirements, but most lenders will examine your credit history, debt, income, college or university, field of study, and residency status.

Generally, you will need to be a U.S. citizen or permanent resident, have a credit score of 700 or higher, be attending school at least half-time, and meet some income threshold to be eligible for a private student loan without a cosigner.

Our State of Private Student Loan report found that the average approved private student loan applicant had a credit score of 748 and annual income of just under $77,000. In addition, only 8.84% of applicants without a cosigner were approved for a loan.

If you aren’t able to qualify for a private student loan on your own, adding a creditworthy cosigner can help. The same study found that when students applied with a cosigner, the approval rate jumped to 30.69%.

If you don’t have a cosigner and don’t meet the eligibility requirements on your own, you should consider looking into student loans for those without a cosigner or student loans for those with bad credit.


How does the application process work?

Applying for private student loans is usually easy and can almost always be done online. There are also many mobile-friendly applications that allow you to apply directly from your phone.

Here are the general steps of applying for a private student loan:

  1. Fill out some basic personal and educational information and have your cosigner fill out similar information (if applicable). In most cases, the lender will use this information to run a soft credit check to see if you meet the initial eligibility requirements.
  2. Next, you will likely have to upload documents so the lender can verify that you are eligible and what your interest rate will be. This process usually takes a few hours up to a few days. If the lender runs a hard credit check as part of the application process, this is when it will happen.
  3. Once you receive your loan options, you will have to decide which to accept, if any. The offers will most likely have varying interest rates based on loan term lengths.
  4. After choosing the loan that best fits your needs, the last step is to sign the promissory note. This is a legally binding contract that requires you to pay back the student loan over time with interest.
  5. Shortly after you sign the promissory note, your student loan funds will be sent to your school for disbursement.

How do interest rates work?

Your interest rate is the biggest factor in the total cost of your student loan. The higher your rate, the more you will pay.

Interest starts accruing on most private student loans the day they are disbursed. Each month, your payment will first go towards unpaid interest and then will be applied to your principal balance.

Private student loan interest typically compounds daily. So each day, some interest will be charged based on your principal balance. The next day, the interest charge will be based on your total balance including the principal and any unpaid interest.

To figure out how much interest accrues on your loan each day, you can divide your interest rate by 365 to find the daily rate. Then multiply this number by your total loan balance (including both principal and unpaid interest) to find how much interest you are charged daily.

If you are curious how much interest you will pay over the life of your loan, you can use our student loan payment calculator.

Having a good credit score or a creditworthy cosigner can help you secure a lower rate. To help you get a better idea of what rates you can expect, here are the average rates LendEDU users received in 2019 based on our State of Private Student Loans Report:

  • Students with a cosigner:
    • 10.20% variable
    • 9.30% fixed
  • Students without a cosigner:
    • 11.20% variable
    • 10.20% fixed

Variable interest rates fluctuate with the market whereas fixed rates remain the same for the life of the loan. Generally, if you anticipate that rates will go up, or if you don’t want to have to worry about your rate increasing, you should go with a fixed rate. If you think rates will go down in the future, a variable rate may be the better (yet riskier) choice.

Keep in mind that rates will vary based on the lender and other factors. It’s important to shop around for the best rate so you can pay as little as possible on your loan.


Is private student loan interest tax deductible?

Yes, you can deduct up to $2,500 in student loan interest from your taxable income each year if you meet certain requirements. Most private student loans qualify for this interest deduction.

If you are a parent that cosigned your child’s student loan, you can deduct the interest from your taxes if your child is your dependent and you make payments on it.


Do private student loans have fees?

While most of the lenders shown on this page don’t charge any fees, it’s important to know what kinds you may come across when shopping around.

Origination fees

This is a fee that is charged when you take out a loan and is calculated as a percentage of the loan amount. For example, if you have a $10,000 loan with a 5% origination fee, the cost would be $500.

Origination fees are typically deducted from the amount of money you are given. In the example above, you would only receive $9,500 after the origination fee is taken out.

One advantage of private student loans over federal loans is that they typically don’t have any origination fees. Federal loans currently have origination fees of 0.000% or 0.000% depending on the type of loan.

Late payment fees

This is a fee that is charged if you don’t make a payment on time. Late fees may be a flat amount (such as $25) or may be based on a percentage of the payment (such as 5%).

Prepayment penalties

This is a fee that is charged if you pay off your loan early. Typically lenders charge this because it cuts into their profit when you prepay your loan. Luckily, most private student loan lenders don’t charge this fee, so you can pay your loan off at any time without penalty.


Do I have to make payments while in school?

While in school, most private lenders give you the option of making payments or deferring them until after graduation. Here are the most common in-school repayment options lenders offer:

  • Full payments: Immediately start making full payments. This option saves the most in interest over the life of the loan.
  • Partial payments: Make a partial payment each month, such as $25. Doing this can help save on interest costs as well.
  • Interest-only payments: Pay only the interest that accrues on your loan each month. When you graduate, your loan balance will be the same amount that you took out.
  • Full deferment: No payments due until after you graduate. Lenders that offer this will typically defer payments until a set period of time after you graduate (called the grace period) of around six months.

How do private student loans compare to federal student loans?

We recommend maxing out your federal student loans before turning to private loans. Federal loans typically have lower interest rates, better financial hardship options, and more repayment plans to choose from.

For example, with federal student loans, you have the option of enrolling in an income-driven repayment plan that caps payments at a percentage of your income.

In addition, federal student loans have fixed interest rates whereas private loans may have fixed or variable rates. The government may also pay the interest that accrues while you are in school and during periods of deferment with subsidized federal student loans.

Lastly, federal student loans are much easier to qualify for than private loans. Whereas private student loans typically require you to have good credit or a creditworthy cosigner, any student attending an eligible school can usually qualify for federal loans.


Recap of the Best Private Student Loan Companies

Lender Rates (APR) Best for
College Ave 0.00% – 0.00% Overall
Sallie Mae 0.00% – 0.00% Flexible repayment
Earnest 0.00%0.00% No fees
Custom Choice 0.00%0.00% Earning a reward upon graduation
Ascent 0.00%0.00% Multiple forbearance periods
SoFi 0.00%0.00% Customer benefits
LendKey 0.00% – 0.00% Working with local banks and credit unions

Find Other Types of Private Student Loans