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Best Private Student Loans of December 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.
- College Ave
Min. Loan$1,000Fixed APR2.99%–12.99%Eligible DegreesUndergraduate & GraduateOffer Details
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
As certified by your school and less any other financial aid you might receive. Minimum $1,000.
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.
Information advertised valid as of 8/9/2021. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
- Credible
Min. LoanVariesFixed APR3.34%–14.50%Eligible DegreesUndergraduate & GraduateOffer Details
Due to the nature of Credible’s student loan purchase and refinancing platform, we are unable to assign it a SimpleScore, as the rates, fees and loan amounts depend on the lender you choose from its marketplace.
Rates displayed include Automatic Payment and Loyalty Discounts, where applicable. Note that such discounts do not apply while loans are in deferment. The lenders on the Credible.com platform offer fixed rates ranging from 3.34% – 14.50% APR and Variable interest rates from 1.04% – 13.19% APR. Variable rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate. Rates are subject to change at any time without notice. Your actual rate may be different from the rates advertised and/or shown above and will be based on factors such as the term of your loan, your financial history (including your cosigner’s (if any) financial history) and the degree you are in the process of achieving or have achieved. While not always the case, lower rates typically require creditworthy applicants with creditworthy co-signers, graduate degrees, and shorter repayment terms (terms vary by lender and can range from 5-20 years) and include Automatic Payment and Loyalty discounts, where applicable. Loyalty and Automatic Payment discount requirements as well as Lender terms and conditions will vary by lender and therefore, reading each lender’s disclosures is important. Additionally, lenders may have loan minimum and maximum requirements, degree requirements, educational institution requirements, citizenship and residency requirements as well as other lender-specific requirements.
- LendKey
Min. Loan$5,000Fixed APRas low as 3.99%Eligible DegreesUndergraduate & GraduateOffer Details
Eligibility for federal, state and university funded financial aid is determined by completing the Free Application for Federal Student Aid (FAFSA). All students are strongly encouraged to apply for federal aid by completing the FAFSA, which can be obtained online at www.fafsa.ed.gov.
Students can check their eligibility for a private student loan with LendKey and our network of private student loan lenders by starting a student loan application.
- Sallie Mae
Min. Loan$1,000Fixed APR3.50%–12.60%Eligible DegreesUndergraduateOffer Details
Lowest rates shown include auto debit discount. Advertised rates are for the Smart Option Student Loan for undergraduate students and are valid as of 7/22/2021.
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 borrower who attends school for 4 years and has no prior 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. - SoFi
Min. LoanVariesFixed APR2.99%–10.90%Eligible DegreesUndergraduate & GraduateOffer Details
UNDERGRADUATE LOANS: Fixed rates from 2.99% to 10.66% annual percentage rate (“APR”) (with autopay), variable rates from 0.99% to 11.22% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 10.90% APR (with autopay), variable rates from 1.09% to 11.33% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.08% to 10.86% APR (with autopay), variable rates from 1.04% to 11.28% APR (with autopay). PARENT LOANS: Fixed rates from 4.23% to 10.66% APR (with autopay), variable rates from 1.19% to 11.22% 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).
- Splash Financial
Min. Loan$5,000Fixed APRas low as 2.49%Eligible DegreesUndergraduate & GraduateOffer Details
Fixed APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rate options range from 2.88% (without autopay) to 7.27% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Rates are subject to change without notice. Fixed rate options without an autopay discount consist of a range from 2.88% per year to 6.21% per year for a 5-year term, 3.40% per year to 6.25% per year for a 7-year term, 3.45% to 5.08% for a 8-year term, 3.89% per year to 6.65% per year for a 10-year term, 4.18% per year to 5.11% per year for a 12-year term, 4.20% per year to 7.05% per year for a 15-year term, or 4.51% per year to 7.27% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan). Variable APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Variable rate options range from 1.99% (with autopay) to 7.10% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Our lowest rate option is shown with a 0.25% autopay discount. Our highest rate option does not include an autopay discount. The variable rates are based on the Variable rate index, is 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 April 27, 2020, the one-month LIBOR rate is 0.43763%. The interest rate on a variable rate loan is comprised of an index and margin added together. The margin is a fixed amount (disclosed at the time of your loan application) added each month to the index to determine the next month’s variable rate. Variable rate options without an autopay discount consist of a range from 2.01% per year to 6.30% per year for a 5-year term, 4.00% per year to 6.35% per year for a 7-year term, 2.09% per year to 3.92% per year for a 8-year term, 4.25% per year to 6.40% per year for a 10-year term, 2.67% per year to 4.56% per year for a 12-year term, 3.44% per year to 6.65% per year for a 15-year term, 4.75% per year to 6.93% per year for a 20-year term, or 5.14% per year to 7.10% for a 25-year term, with no origination fees. APR is subject to increase after consummation. Variable interest rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. The maximum variable rate may be between 9.00% and 16.00%, depending on loan term. The floor rate may be between 0.54% and 4.21%, depending on loan term. These rates are 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.
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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
- Best for Multi-Year Approval: Citizens Bank
- Best for Part-Time Students: Sallie Mae
- Best for Long Grace Period: Earnest
- Best for Member Perks: SoFi
- Best for No Credit: Ascent
The best private student loans at a glance
| Lender | Min. Loan Amount | APR | Terms | SimpleScore |
|---|---|---|---|---|
| Citizens Bank | $1,000 | 4.18%–10.83% fixed; 1.16%–10.25% variable | 5, 10 or 15 years | 3 |
| Sallie Mae | $1,000 | 3.50%–12.60% fixed; 1.13%–11.23% variable | 10 to 15 years | 4 |
| Earnest | $1,000 | as low as 3.34% fixed; as low as 1.04% variable | 5 to 20 years | 4.2 |
| SoFi | $5,000 | 2.99%–10.90% fixed; 0.99%–11.33% variable | 5, 7, 10, 15 and 20 years | 4.6 |
| Ascent | $1,000 | 5.63%–12.46% fixed; 4.07%–11.32% variable | 5, 10 and 15 years | 3.6 |
*Rates accurate as of December 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.
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.
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.
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.
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.
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.
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.
Best for no credit – Ascent
Scaling intellectual heights without a solid credit score? Rise to the occasion with Ascent.
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:
- 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.
- 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.
- 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.
- 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.
| Pros | Higher borrowing limits Lower rates for good credit Special borrower incentives |
| Cons | Eligibility 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:
- 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.
- 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.
- Select your loan terms. Some companies may give you a variety of options for your interest rate (fixed vs variable) and repayment plan.
- 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.
Too long, didn’t read?
Private student loans offer the benefit of competitive interest rates and flexible terms. Students can also access provider-specific benefits — such as cash back or multi-year approval — but must consider overall rates, term lengths and fees to find the best fit for their finances.
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.
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Reviewed by
Courtney Mihocik
Loans EditorCourtney 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.
