Best Private Student Loans of 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.

Lending Partner
Min. Loan
Fixed APR
Eligible Degrees
  • College Ave
    Min. Loan
    $1,000
    Fixed APR
    3.49%–12.99%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Credible
    Min. Loan
    N/A
    Fixed APR
    N/A
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Discover, Member FDIC
    Min. Loan
    $5,000
    Fixed APR
    4.59%–12.39%
    Eligible Degrees
    Undergraduate
    NEXT
    on lender’s secure website
  • LendKey
    Min. Loan
    $5,000
    Fixed APR
    4.25%–12.35%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Sallie Mae
    Min. Loan
    $1,000
    Fixed APR
    4.25%–12.35%
    Eligible Degrees
    Undergraduate
    NEXT
    on lender’s secure website
  • SoFi
    Min. Loan
    Varies
    Fixed APR
    4.23%–11.76%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Splash Financial
    Min. Loan
    $5,000
    Fixed APR
    2.88%–6.72%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • College Ave
    Min. Loan
    $5,000
    Fixed APR
    3.99%–9.24%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Credible
    Min. Loan
    N/A
    Fixed APR
    N/A
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Education Loan Finance
    Min. Loan
    Varies
    Fixed APR
    Starting at 2.75%
    Eligible Degrees
    Undergraduate, Graduate & Parent Loans
    NEXT
    on lender’s secure website
  • LendKey
    Min. Loan
    Varies
    Fixed APR
    2.99%–8.77%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • SoFi
    SoFi Logo
    Min. Loan
    $5,000
    Fixed APR
    3.24%–6.53%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Discover, Member FDIC
    Min. Loan
    $5,000
    Fixed APR
    3.49%–6.99%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
In this article

    The 5 best private student loans of 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

    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 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.

    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.

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    Discover Student Loans Disclosure
    1. Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans and include a 0.25% interest rate reduction while enrolled in automatic payments. 2. Lowest APRs shown are available for the most creditworthy applicants for undergraduate loans and include an 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, MBA, Residency, Bar Exam, Private Consolidation and Parent 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. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of October 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 Lee

    Contributing Writer

    Jason Lee is a U.S.-based freelance writer with a passion for writing about dating, banking, tech, personal growth, food 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 sets with the rest of the world. Follow Jason on Facebook here