Best Private Student Loans of July 2021

Students aren’t just leaving school with new friends and undergraduate degrees — they’re also bringing the stress of student loan debt along for the ride. In fact, most students now finish post-secondary school owing more than $30,000 and spend anywhere from 10 to 25 years paying back these loans. While there’s no way to make student loan debt disappear, it’s possible to lower interest payments and reduce total term lengths by finding the best student loans for your finances.

Lending Partner
Min. Loan
Fixed APR
Eligible Degrees
  • College Ave
    Min. Loan
    $1,000
    Fixed APR
    3.24%–12.99%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Credible
    Min. Loan
    Varies
    Fixed APR
    3.34%–14.50%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • LendKey
    Min. Loan
    $5,000
    Fixed APR
    as low as 3.99%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Sallie Mae
    Min. Loan
    $1,000
    Fixed APR
    4.25%–12.60%*
    Eligible Degrees
    Undergraduate
    NEXT
    on lender’s secure website
  • SoFi
    Min. Loan
    Varies
    Fixed APR
    3.49%–10.66%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Splash Financial
    Min. Loan
    $5,000
    Fixed APR
    as low as 2.49%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • College Ave
    Min. Loan
    $5,000
    Fixed APR
    2.99%–4.89%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Credible
    Min. Loan
    Varies
    Fixed APR
    2.16%–9.15%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Education Loan Finance
    Min. Loan
    $15,000
    Fixed APR
    2.58%
    Eligible Degrees
    Undergraduate, Graduate & Parent Loans
    NEXT
    on lender’s secure website
  • LendKey
    Min. Loan
    Varies
    Fixed APR
    as low as 2.95%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • SoFi
    SoFi Logo
    Min. Loan
    $5,000
    Fixed APR
    2.74%–6.39% (with AutoPay)
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
In this article

    While public student loans are always an option to help pay for schooling, private student loans offer more choice for students looking to get out of debt and get on with their lives. We used our SimpleScore methodology to compare rates, fees, loan amounts, transparency and perks of the best private student loans of 2020.

    The best private student loans of 2020

    The best private student loans at a glance

    LenderMin. Loan AmountAPRTermsSimpleScore
    Citizens Bank$1,0004.18%–10.83% fixed; 1.16%–10.25% variable5, 10 or 15 years3
    Sallie Mae$1,0004.25%–12.60% fixed; 1.13%–11.23% variable10 to 15 years4
    Earnest$1,000as low as 3.34% fixed; as low as 1.04% variable5 to 20 years4.2
    SoFi$5,0003.49%–10.66% fixed; 1.12%–11.23% variable5, 7, 10, 15 and 20 years4.6
    Ascent$1,0005.63%–12.46% fixed; 4.07%–11.32% variable5, 10 and 15 years3.6

    *Rates accurate as of July 2021

    Best for multi-year approval – Citizens One

    No one loves their student loans — but Citizens Bank makes it easier to like the little things with multi-year approval.

    Fixed APR
    4.18%–10.83%
    Term
    N/A
    Loan Amount
    $1K–$150K
    SimpleScore
    3 / 5.0
    close
    SimpleScore Citizens One 3
    Max Fixed APR 3
    Perks 3
    Transparency 4
    Loan Amount 1
    Fees 4

    Citizens Bank offers a low-hassle way for students to pay back loans with multi-year approval. Citizens Bank makes the list of best student loans thanks to its multi-year approval process. After successfully applying for your initial student loan, subsequent term years don’t require re-applying. Instead, Citizens Bank performs a soft credit check each year. And while Citizens Bank does require a cosigner for most student loans, the cosigner can be released from their obligation after 36 months of on-time payments. If the student or cosigner already has an account with Citizens Bank, they’re eligible for a 0.25% interest rate reduction on their private student loan.

    Citizens One Disclosure

    Variable Rate Disclosure: Variable Rates advertised are 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 June 1, 2021, the one-month LIBOR rate is 0.09%.Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. Your final variable rate may be based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.

    Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.

    Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), 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. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.

    Read our full Citizens Bank private student loans review.

    Best for part-time students – Sallie Mae

    Need a part-time partnership? Shake hands with Sallie Mae for full coverage of any courses at a degree-granting institution.

    Fixed APR
    4.25%–12.60%*
    Term
    10–15 years
    Loan Amount
    100% of the costs of attendance
    SimpleScore
    4 / 5.0
    close
    SimpleScore Sallie Mae 4
    Rates 3
    Perks 5
    Transparency 4
    Loan Amount 5
    Fees 3

    Sallie Mae earns a spot as one of the best student loan companies because it offers financing for any students.

    While many private student loan lenders will cover full- or half-time students at accredited colleges and universities, few lenders offer support for students taking night classes, career certification courses, winter classes or summer courses falling outside typical school structure. Sallie Mae, however, offers up to 100% financing for any student — so long as they’re attending a degree-granting institution. Even better? Interest rates from Sallie Mae slide to the lower end of the scale, making this a cost-effective choice if you’re only taking a few classes.

    Sallie Mae Disclosure

    Repayment Options: Deferred, $25 Fixed ² , or Interest Repayment during school ¹

    1 Lowest rates shown include auto debit discount. Advertised rates are for the Smart Option Student Loan for undergraduate students and are valid as of 7/1/2021.
    Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. Payments may be required during the grace/ separation period depending on the repayment option selected. Variable rates may increase over the life of the loan. Advertised variable rates reflect the starting range of rates and may vary outside of that range over the life of the loan. Advertised APRs assume a $10,000 loan to a freshman with no other Sallie Mae loans. The borrower or cosigner must enroll in auto debit through Sallie Mae to receive a 0.25 percentage point interest rate reduction benefit. This benefit applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment, if available for the loan.

    2 Examples of typical transactions for a $10,000 Smart Option Student Loan With the most common variable rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year In-school period, it works out to a 6.88% APR, 51 payments of $25 00, 119 payments of $136.17 and one payment of $112.58, for a Total Loan Cost of $17,591.81. For a borrower with $20,000 In prior loans and a 2-year In-school period, it works out to a 7.06% APR, 27 payments of $25.00, 179 payments of $98.17 and one payment of $66.85 for a total loan cost of $18,314.28. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 year. Variable rates may increase over the life of the loan.

    Best for long grace period – Earnest

    Earnest makes an earnest effort to help students repay student loans, including a nine-month grace period and absolutely no fees.

    Fixed APR
    as low as 3.34%
    Term
    5–20 years
    Loan Amount
    100% of the certified costs of attendance
    SimpleScore
    4.2 / 5.0
    close
    SimpleScore Earnest 4.2
    Max Fixed APR 2
    Perks 4
    Transparency 5
    Loan Amount 5
    Fees 5

    Instead of six months’ grace period, Earnest gives you an extra three months before you have to start paying.

    After graduation, most lenders require repayment starting in six months. However, with Earnest, borrowers have up to nine months before repayment begins. This is quite handy for graduates who need more than six months to lock down gainful employment. Furthermore, Earnest’s interest rates are comparable to other lenders in the private student loan market, making it a solid choice for students who need financing for college. And it’s mobile app is pretty robust — borrowers can make and change payment dates, skip one payment a year and check on their balances.

    Best for member perks – SoFi

    SoFi, is so good — stay on track for student loan payback with great member benefits.

    Fixed APR
    3.49%–10.66%
    Term
    5–20 years
    Loan Amount
    100% of the certified costs of attendance
    SimpleScore
    4.6 / 5.0
    close
    SimpleScore SoFi 4.6
    Max Fixed APR 3
    Perks 5
    Transparency 5
    Loan Amount 5
    Fees 5

    SoFi offers a host of great benefits for members to help manage their student loan repayment and get out of debt faster.

    SoFi is all about helping its members manage their finances and pay back their student loans as quickly as possible. The entire application process can be completed online, there are no extra fees associated with any SoFi loans and students get flexible payment options that fit with their budget. Most of SoFi members asked said they would recommend the company to a friend — and with benefits like $400 off SAT/ACT prep courses, this is no surprise.

    SoFi Disclosure

    Disclosure: UNDERGRADUATE LOANS: Fixed rates from 3.49% to 10.66% annual percentage rate (“APR”) (with autopay), variable rates from 1.12% to 11.23% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 10.90% APR (with autopay), variable rates from 1.10% to 11.34% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.08% to 10.86% APR (with autopay), variable rates from 1.05% to 11.29% APR (with autopay). PARENT LOANS: Fixed rates from 4.23% to 10.66% APR (with autopay), variable rates from 1.20% to 11.23% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 11/04/2020. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).

    Best for no credit – Ascent

    Scaling intellectual heights without a solid credit score? Rise to the occasion with Ascent.

    Fixed APR
    3.85%–12.94%
    Term
    5-15 years
    Loan Amount
    $1K–$200K
    SimpleScore
    3.6 / 5.0
    close
    SimpleScore Ascent 3.6
    Rates 2
    Perks 5
    Transparency 4
    Loan Amount 3
    Fees 4

    If you don’t have great credit — or if you’ve got no credit — Ascent student loans are a solid choice.

    Ascent is one of the only private student loan lenders to offer loans without a cosigner and for students with little or no credit history. That’s because the company looks at more than just your credit score to approve loan funding. Along with your current school, GPA and major, Ascent also takes into account your predicted future income for its Non-Cosigned Future Income-Based Loan for Undergraduate loan — which is available to juniors and seniors exclusively.

    What is a private student loan?

    Private student loans are issued by private lenders — these include traditional banks, credit card companies and specialty lending services. Many providers offer loans covering up to 100% of all post-secondary expenses, but different lenders have different rules about exactly how this money can be spent and what type of proof you’ll need to provide.

    [Read: The Best Student Loans of 2020]

    The cost of private student loans varies considerably across providers. Some charge fees for application, origination and even early prepayment, while others streamline the process but have higher interest rates. Some offer perks like cash back, while others make it easy to apply online or offer multi-year approval options to reduce unnecessary paperwork.

    How private student loans work

    Private student loans are similar to personal loans — applicants will need to provide financial and personal data including their Social Security Number, address and telephone number, current income levels, information about any other debts or loans and the value of any assets.

    Next, students need to specify how much money they’re applying to borrow and how it will be used. Then, they’ll need to complete loan application forms — many providers now offer online or mobile options, but some still require paper forms — and then wait for a response from the lender. If approved, students sign all documents, and the funds are disbursed electronically. If rejected, some lenders will provide an opportunity to resubmit documents once specific issues are addressed.

    [More: Will Consolidating Your Student Loans Help Your Credit Score?]

    Repayment

    Most private student loans don’t require repayment until after you’ve completed school. Many offer a grace period during which you won’t be charged interest — six months is the most common, but some providers offer nine or even 12 months depending on the amount of your loan and the program you’ve completed. Private lenders typically offer repayment terms ranging from five to 20 years, but bear in mind the longer your repayment period the more interest you’ll pay over time.

    Cosigners

    Many students don’t have the income levels, financial history and credit score necessary to qualify for a student loan on their own. As a result, private student loan providers often ask for a cosigner — typically a financially stable parent or guardian — who also provides their personal information and signs the loan documents.

    Cosigners are jointly responsible for the repayment of the loan, which means that defaulting on payments could negatively impact their credit score. Some providers do offer no-cosigner loans under specific circumstances, while others allow students to remove cosigners after enough on-time payments are made.

    How to choose the best private student loan for you

    When it comes to choosing the best student loans, it’s worth approaching the process step-by-step:

    1. Do your research. Evaluate multiple providers and see what specific benefits they offer. Some make it easy to apply and manage your loan online, while others offer cashback rewards for good grades.
    2. Compare interest rates and terms. Check the range of possible interest rates for different private loans for college. If you’re looking for a fixed rate, long term loan with no cosigner, expect higher interest rates. If you’re willing to take on a shorter-term with variable rates, you can often find low-interest student loans.
    3. Calculate the amount you need. Most providers have a minimum lending amount of $1,000 and will cover up to 100% of your school expenses. Others — such as Citizens Bank and Ascent — have maximum amounts of $150,000 and $200,000, respectively.
    4. Consider the grace period. Longer grace periods mean more time to pay back your loan without accruing interest. While six months is the standard, some offer longer (or shorter) grace periods.

    Pros and cons of private student loans

    Private student loans have a different set of advantages and disadvantages from federal loans. While they can be an effective way to fill a funding gap, even the best private loans don’t come with the same federal protections.

    ProsHigher borrowing limits
    Lower rates for good credit
    Special borrower incentives
    ConsEligibility based on credit history
    Ineligible for income-based repayment
    No subsidized interest

    How to maximize your student financial aid

    Before you turn to private loans to help fund your college education, you’ll first want to maximize the financial aid options the federal government offers. The U.S. Department of Education has several grants available to students with financial need. One of the most popular is the Federal Pell Grant, which goes to undergraduate students with exceptional financial need. To be eligible for any federal grant money, you’ll have to fill out a FAFSA (Free Application for Federal Student Aid).

    In addition to federal grants, students can apply for scholarships. Like grants, this money doesn’t have to be paid back after you graduate. Scholarships are often based on merit or financial need.

    Taking advantage of these other sources of funding can help students reduce the amount of money they have to borrow, and ultimately pay back, from the federal government and private lenders.

    [Read: Eight Common Myths About the FAFSA, Busted]

    How to get a private student loan

    Applying for a private student loan is a fairly quick process. Unlike applying for federal loans, private loan applications don’t require you to fill out a FAFSA. However, you will have to provide financial information so the company can run a credit check.

    Here’s what you’ll need to do to apply for a private student loan:

    1. Fill out the application. Providing any necessary personal and financial information. Depending on your credit, the company may either provide you with an instant decision or have someone review your application and get back to you.
    2. Get a cosigner, if needed. Unlike federal loans, private loans require you to meet certain credit qualifications. If the lender doesn’t feel confident you’ll pay back your loan, they may ask you to add a cosigner to your application.
    3. Select your loan terms. Some companies may give you a variety of options for your interest rate (fixed vs variable) and repayment plan.
    4. Sign your loan documents. Once you and the lender have agreed to the loan terms, you’ll have to sign any necessary documents to get the loan money.

    FAQ

    Your interest rate primarily comes down to two factors: your lender and your creditworthiness. Every lender offers different rates, and you can only get a rate as low as your lender currently offers. Your creditworthiness is the other big factor — the better your credit, the better the rate you can get. Other factors may also include the size of the loan, the repayment plan you choose, and whether you qualify for any rate discounts.

    A private student loan can be an effective tool to help you fund your college education. Private loans don’t come with all of the same perks as federal loans. You usually aren’t eligible for income-based repayment plans or federal loan forgiveness. But private loans usually have higher borrowing limits and can help fill the gaps if your federal loans aren’t enough to meet your needs.

    We welcome your feedback on this article and would love to hear about your experience with the student loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

    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

    Reviewed by

    • Courtney Mihocik
      Courtney Mihocik
      Loans Editor

      Courtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to Interest.com, PersonalLoans.org, and elsewhere.