Best Private Student Loans of March 2020

Where federal student loans fall short, private student loans fill in the gaps. These privately offered financial tools are often utilized to get a better interest rate, borrow a larger sum of money, or plug benefits and coverage gaps created by federal loans. As higher-level education is expensive, the big question on everyone’s mind is how they are going to pay for it. The best private student loans have competitive interest rates, high borrowing limits and flexible repayment methods not offered through federal programs.

The 5 best private student loans of March 2020

Citizens Bank: Best for future borrowing

Discover Student Loans: Best for rewards

Sallie Mae: Best for part-time students

Earnest: Best for flexible payment options

SunTrust: Best for wide variety of products

Lender Fixed APR Variable APR Loan Amounts Repayment Terms
Citizens Bank 4.72%–12.04% 2.76%–11.01% $1,000–$150,000 5, 10, or 15 years
Discover 4.49% – 12.39%1 1.24% – 10.99%1 $1,000 to 100% cost of attendance 15 years
Sallie Mae 4.74%–11.49% 2.75%–10.65% $1,000 to 100% cost of attendance 5 to 15 years
Earnest Starts at 4.39% Starts at 2.74% $1,000 to 100% cost of attendance 5 to 20 years
SunTrust Custom Choice Student Loan 4.297%–11.050% 2.998%–10.050% $1,001–$65,000 7, 10, or 15 years

Discover Disclosure: 1. Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.

The 5 best private student loans of March 2020

Citizens Bank: Best for future borrowing

With Citizens Bank, borrowers who qualify for multi-year approval are awarded easier borrowing in the future. Once approved, Citizens Bank only performs soft credit checks for future student loans, protecting students’ credit scores. Only one application is needed for the Mult-Year Approval program, but if student borrowers don’t qualify, Citizens Bank still offers competitive interest rates starting as low as 2.90% variable with a 0.50% discount available for existing customers or automatic payments.

Discover Student Loans: Best for rewards

If  you plan on being a successful student, Discover private student loans offer a reward for good grades. Students with qualifying loans that maintain a 3.0 GPA will receive 1% of the loan amount as a cash reward. So if a student has a $10,000 loan with Discover and earns a 3.0 GPA or higher during the academic term in which the loan is used, that student will receive $100 as a cash reward. The only thing to remember with Discover’s Rewards for Good Grades program is that it is the responsibility of the student to submit the paperwork required to claim the reward.

Sallie Mae: Best for part-time students

Several of the private loan lenders in the industry will only offer loans to students attending school full time or at least half time. For those looking to take night classes or attend school part-time, this does not help. Sallie Mae qualifies borrowers as long as they are attending a degree-granting school. This includes night classes, career certification courses, winter courses and summer courses that might otherwise not fall under traditional private lending.

Earnest: Best for flexible payment options

Unlike more rigid lenders with only a few term lengths to choose from, Earnest offers repayment periods in 3-month increments from 5 years all the way up to 20 years — borrowers can set their monthly payment and the repayment terms are calculated from that number. Those looking to be able to fully customize their private student loan repayment schedule and amount will appreciate this unique feature from Earnest. Furthermore, Earnest offers four different repayment options so student borrowers can start making payments on interest during school or wait until the deferment period is over before making full monthly payments. Additionally, the lower end of the company’s rates is better than the industry average on private student loans.

SunTrust: Best for wide variety of products

Of all the top private student loans SunTrust advertises the best available rates. The company’s fixed APR of 4.299% on its Custom Choice loan is well ahead of the industry average as well as all other options mentioned. You will need excellent credit or a cosigner with excellent credit to qualify for this low APR, however. But SunTrust offers four different student loans to choose from: Custom Choice, Start Student Loan, Union Federal Private Student Loan and the Graduate Business School Loan. The APRs among these products vary slightly but are on-par with other private student loan lenders available.

What is a private student loan?

Private student loans are loans issued by banks, lenders, and financial institutions to students to pay for higher-level education and the associated expenses. Private loans, as opposed to federal student loans, often allow borrowers to access much greater amounts of funding that may be needed to cover all costs. Federal student loans typically have better interest rates, but many students quickly max out the amount they can borrow and are still left with unpaid expenses. This is where private student loans are most effective in helping.

How should I choose the right private student loan?

Much like any type of private loan, borrowers have to pay back the amount of the loan as well as associated interest. Depending on the private student loan, repayment options, interest rates and benefits will vary. When shopping for the best option, you’ll want to weigh the pros and cons of these different factors. While getting the lowest interest rate offered should be your main goal, securing that loan might not be feasible based on your past credit, your access to a cosigner or the amount that you need to borrow.

The best course of action to find the ideal private student loan is to begin by identifying how much money you need to cover your education expenses. From there, compare the different options available to you at top private lenders to see which is the best fit. If you can find an acceptable rate with payment terms that fit your future financial plans, you’re all set.

The bottom line

Private student loans do a fantastic job bridging the needs gap often left by federal student loans or savings accounts. Typically, using private student loans in conjunction with on-hand funding and federal loans is the best plan to meet all of your higher education payment needs. In some cases, private student loans are the best choice to cover 100% of your learning expenses. Take the time to shop for your options and choose the best one that sets you up for future financial success.

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Discover Student Loans Disclosure
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and Auto Debit Reward. 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 lowest APRs shown for residency, bar exam, private consolidation and parent loans are available for the most creditworthy applicants and include a 0.25% interest rate reduction while enrolled in automatic payments. 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. For variable interest rate loans, the 3-Month LIBOR is 0.375%% as of July 1, 2020. Discover Student Loans may 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. Our lowest APR is only available to customers with the best credit and other factors. Your APR will be determined after you apply. It will be based on your credit history, which repayment option you choose and other factors, including your cosigner’s credit history (if applicable). Learn more about Discover Student Loans interest rates.

Jason Wesley
Jason Wesley
Contributing Writer

Jason Wesley is a seasoned copywriter with a passion for writing about banking, tech, personal growth, and personal finance.As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill set with the rest of the world.