Choosing a student loan can be as complex as committing to a college major. Though you won’t receive a fancy diploma once you sign a student loan agreement, you will be carrying it around with you for years to come. In fact, about 65% of college students graduate with student loan debt. To ease a bit of that obligation, the best student loan will offer a low-interest rate, flexible repayment options, and a few rewards. We used our in-house analysis system, SimpleScore, to rate the best student loans of 2020 on rates, fees, loan amounts, transparency and extra perks.

private refinancing

College Ave

Min. Loan	Fixed APR	Eligible Degrees
$1,000	3.59% - 12.99%	Undergraduate & Graduate

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on lender's secure website

College Ave

Min. Loan	Fixed APR	Eligible Degrees
$5,000	4.64% - 8.99%	Undergraduate & Graduate

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Credible

Min. Loan	Fixed APR	Eligible Degrees
Varies	3.95%	Undergraduate & Graduate

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on lender's secure website

Credible

Min. Loan	Fixed APR	Eligible Degrees
Varies	From 2.17%	Undergraduate & Graduate

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on lender's secure website

Discover

Min. Loan	Fixed APR	Eligible Degrees
$5,000	4.24% – 12.39%¹	Undergraduate

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on lender's secure website

LendKey

Min. Loan	Fixed APR	Eligible Degrees
$5,000	4.25% – 12.35%	Undergraduate & Graduate

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on lender's secure website

LendKey

Min. Loan	Fixed APR	Eligible Degrees
$5,000	3.19% - 7.75%	Undergraduate & Graduate

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on lender's secure website

Sallie Mae

Min. Loan	Fixed APR	Eligible Degrees
$1,000	4.74% - 11.86%¹	Undergraduate

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on lender's secure website

SoFi

Min. Loan	Fixed APR	Eligible Degrees
$5,000	3.20% - 6.44%	Undegrad & Graduate

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on lender's secure website

Splash

Min. Loan	Fixed APR	Eligible Degrees
$5,000	From 1.99%	Undergraduate & Graduate

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on lender's secure website

In this article

• The best student loans in 2020
• Student loans buying guide
• Refinancing your student loan
• Student loans FAQ
• Too long, didn’t read?

The best student loans in 2020

• Discover – Best for cash back rewards
• LendKey – Best for a lender network
• Sallie Mae – Best for building credit
• CommonBond – Best for referral bonuses
• Earnest – Best mobile app
• SoFi – Best for member perks
• PNC Bank – Best for high rate discount
• College Ave – Best for flexible payment terms

The best student loans at a glance

Rates accurate as of July 2020Discover 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.

Best for cashback rewards – Discover

Check Rates

Discover

Students with good grades are eligible for a 1% cash reward.

Fixed APR

4.24% – 12.39%

Loan Size

100% of costs

Fees

None

SimpleScore

4.6 / 5.0

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SimpleScore

Discover

4.6

• Max Fixed APR
  3
• Perks
  5
• Transparency
  5
• Loan Amount
  5
• Fees
  5

Our methodology

Most probably know Discover for its credit cards and banking options, but the company also offers student loans. We found Discover’s online resources and account management seamless. You can find educational resources and calculators to arm yourself with everything involved in taking on a loan, and then apply in just a few minutes.

Discover typically offers a wide range of fixed and variable rates, and the loan can fund 100% of your certified school costs. If you receive a 3.0 GPA or higher during the term you took the loan out for, you can qualify for a 1% cash reward. You can also receive a 0.25% lower interest rate if you enable autopay on your monthly payments. To top it off, Discover has no application, origination or late payment fees.

If you don’t have the best credit score, and neither does your cosigner, you might have a hard time qualifying for a Discover student loan.

Full review

Our Two Cents — Discover can help you pave the way to higher education with great rates, no fees, and enticing rewards.

Best for a lender network – LendKey

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LendKey

Borrowers can choose from a list of the best student loans offered by LendKey.

Fixed APR

as low as 4.25%

Max loan amount

100% of costs

Fees

$25 or 5% of loan

SimpleScore

4.6 / 5.0

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SimpleScore

LendKey

4.6

• Max Fixed APR
  5
• Perks
  5
• Transparency
  4
• Loan Amount
  5
• Fees
  4

Our methodology

LendKey acts as a middle man and account manager that connects you to student loans from non-profit lenders, regional banks and credit unions. The student loans available may offer lower interest rates and better terms than a larger bank. And because of this network model, you may be more likely to find something that fits your specific portfolio and credit history. LendKey also allows you to see if you’ll qualify and what rates are available without a hard credit check.

If the loan you’re matched with is a credit union, there may be a fee for joining that credit union, hopefully, countered by lower rates. You can make payments and manage the loan through LendKey, especially enticing if the lender has a clunky online interface. The specific pros and cons of student loans offered by LendKey will vary depending on the lender or bank you’re matched with.

Full review

Our Two Cents — LendKey is the buffet of student loans, displaying a variety of options from small venders and regional lenders. There’s something for everyone.

Best for building credit – Sallie Mae

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Sallie Mae

Funding for full and part-time students interested in building their credit score as they go.

Fixed APR

4.74% – 11.85%

Max loan amount

100% of costs

Fees

5% late fee

SimpleScore

4 / 5.0

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SimpleScore

Sallie Mae

4

• Max Fixed APR
  3
• Perks
  5
• Transparency
  4
• Loan Amount
  5
• Fees
  3

Our methodology

Sallie Mae originated as a federal student loan lender but has since transitioned to offer private student loans. Its most unique feature is flexibility around your student status. Sallie Mae is one of the few lenders that will offer loans to part-time students. Even if you’re picking up a few classes over the summer or taking night classes, you can qualify for a student loan. This benefit also applies to study abroad programs, professional certification courses and foreign schools.

There are a few perks to borrowing from Sallie Mae: a free quarterly FICO credit report, four months of free Chegg Study (a homework and textbook service) and interest-only payments for 12 months after graduation. Unfortunately, checking to see if you qualify and what rate you’ll receive requires a hard credit check.

Full review

Our Two Cents — Sallie Mae is the Hufflepuff of student loans; it’s open to any student and is ready to accommodate your needs and your educational timeline.

Sallie Mae Disclosure: 1. This information is for undergraduate students attending participating degree-granting schools. Borrowers must be U.S. citizens or U.S. permanent residents if the school is located outside of the United states. Non- U.S. citizen borrowers who reside in the U.S. are eligible with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident) and are required to provide an unexpired government-issued photo ID to verify identity. Applications are subject to a requested minimum loan amount of $1000. Currently credit and other eligibility criteria apply. 2. This repayment example is based on a typical Smart Option Student Loan made to a freshman borrower who chooses a fixed rate and the Fixed Repayment Option for a $10,000 loan, with two disbursements, and a 8.51% fixed APR. It works out to 51 payments of $25.00, 179 payments of $124.69 and one payment of $66.91, for a Total Loan Cost of $23,661.42. 3. Although we do not charge you a penalty or fee if you prepay your loan, any prepayment will be applied as provided in your promissory note: first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal.

Best for referral bonuses – CommonBond

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CommonBond

Borrowers will earn $200 from CommonBond for every person you refer who signs up for a loan.

Fixed APR

5.45% – 9.74%

Max loan amount

100% of costs

Fees

$10 or 5% late fee

SimpleScore

4 / 5.0

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SimpleScore

CommonBond

4

• Max Fixed APR
  4
• Perks
  5
• Transparency
  3
• Loan Amount
  5
• Fees
  3

Our methodology

If you connect with a vast network of students, you can earn $200 towards your CommonBond loan for referring them to also sign up for a loan. Your student loan also contributes to the education of children in a developing country — for every student loan issued, CommonBond covers the cost of a child’s education.

One of CommonBond’s unique resources is a Money Mentor, a person who can give you free financial advice via text message. They can advise you on your budget, career path, credit-building and help find internship opportunities.

Oddly, loans are not available with CommonBond in Nevada and Mississippi. For most borrowers, a cosigner will be required.

Full review

Our Two Cents — You can give a little back to the world with your CommonBond loan, and maybe get something in return for selling your friends on it.

Best mobile app – Earnest

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Earnest

Use the mobile app or website to manage everything from start to finish.

Fixed APR

as low as 3.19%

Max loan amount

100% of costs

Fees

None

SimpleScore

4.8 / 5.0

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SimpleScore

Earnest

4.8

• Max Fixed APR
  5
• Perks
  4
• Transparency
  5
• Loan Amount
  5
• Fees
  5

Our methodology

Earnest impresses with low APR rates, a 9-month grace period for deferment, no fees and a 0.25% discount for setting up autopay. You can even skip one payment per year. On Earnest’s website, you can verify your eligibility in just two minutes and scroll through your options — no hard credit check required. If you like the interest rates they offer, you can choose between four repayment plans.

The lender’s digital interfaces are above and beyond the competition, with a seamless website experience and feature-packed mobile app. Earnest has a blog full of resources if you have any questions about the student loan process or finances.

To qualify for a student loan with Earnest, you (or your cosigner) will need a credit score of at least 650 and no history of bankruptcy.

Full review

Our Two Cents — There’s nothing more earnest than second chances, especially for missed payments. So, give this lender a try, we guarantee it’ll be a smooth ride.

Best for member perks – SoFi

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SoFi

SoFi borrowers get exclusive discounts and deals on partner loans and banking products.

Fixed APR

4.23% – 11.76%

Max loan amount

100% of costs

Fees

None

SimpleScore

4.6 / 5.0

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SimpleScore

SoFi

4.6

• Max Fixed APR
  3
• Perks
  5
• Transparency
  5
• Loan Amount
  5
• Fees
  5

Our methodology

SoFi is famous for its student loan refinancing, as the first lender to refinance private and federal student loans into one package. Like many of our other favorite lenders, SoFi gives a 0.25% discount for autopay, no fees and an online application. SoFi members also receive financial planning advice, career services and invitations to networking events.

At some point, SoFi will check with your school to verify you have satisfactory academic progress (they don’t specify what that looks like), and it could affect your eligibility for borrowing money. This might mean a specific GPA, graduation timeline or a percentage of completed credits.

Full review

Our Two Cents — SoFi’s student loan options are out of this world. But you’ll need a ticket to their planet.

Best for high rate discount – PNC Bank

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PNC Bank

A generous auto-pay discount and options for part-time students.

Fixed APR

4.49% – 11.49%

Max loan amount

100% of costs

Fees

$5 or 5% late fee

SimpleScore

3.8 / 5.0

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SimpleScore

PNC Bank

3.8

• Max Fixed APR
  3
• Perks
  5
• Transparency
  4
• Loan Amount
  3
• Fees
  4

Our methodology

PNC Bank is one of the few lenders that will offer student loans to part-time students. You’ll also get double the usual discount for enrolling in auto-pay, 0.50%. After four years of timely payments, you can apply to release the cosigner and be solely responsible for the loan.

The PNC Bank website is a bit barebones, and that can make it hard to compare your options. You won’t find an abundance of online resources or extensive FAQ sections, and will often be directed to call the helpline for detailed information. PNC Bank also has the highest starting rate for variable interest.

Full review

Our Two Cents — PNC Bank is a bit old school compared to our other recommendations, but it’s worth considering if you’re a part-time student.

Best for flexible payment terms – College Ave

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College Ave

If you need flexibility on your student loan payments, add College Avenue to the shortlist.

Fixed APR

3.59% – 12.99%

Max loan amount

100% of costs

Fees

$25 or 5% late fee

SimpleScore

3.8 / 5.0

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SimpleScore

College Ave

3.8

• Max Fixed APR
  2
• Perks
  4
• Transparency
  5
• Loan Amount
  4
• Fees
  4

Our methodology

College Ave gives borrowers a few different ways to customize their experience. You can choose between four repayment options and four different loan term lengths. There are options to make small payments while still in school, or you can defer. The specific deferment policy is considered on a case-by-case basis. While this could result in a longer post-graduation timeline if your financial situation is sticky, it could also mean there’s no guarantee of a deferment period. Most students are offered six months.

Another upside is that you can check your potential rates and terms without impacting your credit with College Ave’s super-quick prequalify application. Part-time students can also apply for a student loan. Like SoFi, College Ave will verify satisfactory academic progress as a qualification to borrow.

Full review

Our Two Cents — If getting a student loan is like going for ice cream, College Ave is the hip froyo spot. You get to customize what you’re buying and get some unique toppings like a few fees and a quick application.

What is a student loan?

Student loans are a sum of money lent to students for funding education and associated costs. Unlike scholarships or grants, this money is paid back (with interest) over a set amount of time. There are federal student loans available from the government depending on your financial need, as determined by the Free Application for Federal Student Aid (FAFSA). Federal loans typically don’t require a credit check nor a cosigner.

Private student loans are available through banks, credit unions and other financial institutions. This type of student loan does require a credit check and often a cosigner. Interest rates will be varied, and it’s best to shop around for a low rate.

How do student loans work

The student loan process is typically pretty straightforward — especially compared to other financial undertakings. You apply online a few months before your school year commences. The money is sent to your school during the first few weeks. Any amount remaining after the tuition and fees is sent to you (ideally used for books, rent, associated costs of attending the university.)

Your repayment plan will depend on the loan you chose. You might pay small amounts while still in school or defer payments until after you’ve graduated, usually with a grace period of six months to a year. That monthly repayment will continue until the loan is paid off.

Loan terms and limits

A loan term is the length of time the borrower has to repay the loan with monthly payments. For student loans, loan terms range from 5-15 years. You can often choose the loan terms, but it will depend on your lender.

Loan limits refer to the amount of money you borrow. Some lenders have minimum and maximum amounts, while others may cover 100% of attendance costs.

Loan minimums: The minimum amount of money you can borrow. Most lenders require a minimum loan amount of around $1,000 – $5,000.

Loan maximums: The maximum amount of money you can borrow. Most lenders will let you borrow 100% of the cost of attendance, while others may have a maximum amount limiting the total you can borrow. The limit is usually around $200,000, which will likely cover 100% of costs, depending on the education.

Loan rates

A loan rate is the percentage of interest that accumulates over the lifetime of the loan. When getting a student loan, lenders offer a choice between fixed or variable interest rates.

Fixed rate loans: The interest rate will remain the same for the entire repayment period. Fixed loan rates can be a bit higher in range than variable, but depending on your credit score (and your cosigner’s credit score), the fixed rate you’re quoted could be low.

Variable rate loans: The interest rate will fluctuate during the loan period as market interest rates change. The starting rates are often lower than fixed rates, but that rate will vary and may be higher at times than the fixed rate you’re quoted.

Types of student loans

There are a few different types of student loans, mostly depending on the education you’re pursuing.

• Undergraduate student loans. Typically used for pursuing a bachelor’s degree. Loan rates are pretty average, and term lengths are often flexible.
• Graduate or professional school loans. For postgraduate education. Some lenders will offer different loans and rates depending on the specialty — medical school, law school, MBA program, etc. Graduate loans often have lower rates and higher maximum loan amounts than undergraduate student loans.
• Community college or technical training loans. Not every lender will offer loans for community college, technical training or part time enrollments. Some lenders have higher loan rates for this level of education than loans for a bachelor’s degree. Other lenders will let you take out a traditional undergraduate loan for community college.
• Parent loans. A parent will take out a loan to help pay for their student’s education. This is a step further than cosigning on a loan, and the parent is solely responsible for the loan’s repayment. The loan will have no impact on the student’s credit (positive or negative). Loan rates are often the same as those for other student loans, but there are fewer repayment and loan term options.

How to apply for a student loan

Applying for a student loan is often a quick process. Before you begin, you’ll need your Social Security number (SSN), banking information, employment and income information, your school’s information and an estimate of the amount you’ll need to borrow. If you have a cosigner, they’ll need to collect the same information.

On the lender’s website, the process typically goes like this:

• Set up an account using an email address, user ID or password
• Follow the website prompts to provide personal information, including name, date of birth, home address and Social Security number
• Enter the requested financial information, such as monthly income
• Answer verification questions
• Choose the loan type and repayment terms
• Provide your co-signer’s information and financials

Once you apply, you’ll receive an answer in a matter of minutes. Make sure you understand the application before you apply. Most student loan companies will let you prequalify for a loan and provide you the interest rate and terms without a hard pull on your credit, so you can go with the offer or pass. But some other lenders will only tell you what you’re approved for after the loan application process is completed, and they’ve done a hard pull on your credit score.

How to choose the best student loan for you

1. Calculate the amount you’ll need to borrow. You’ll need this information to apply for loans.
2. Apply for FAFSA. You’ll want to compare all the options available to you, private and federal.
3. Submit several applications to private lenders and compare the interest rates (variable and fixed), fees, term lengths, repayment options and rewards.
4. Decide on the best loan options for you and your financial situation.

Refinancing student loans

There are times when your student loan debt amounts to more than you can afford. If you’re paying student loans with high-interest rates and would like to benefit from a lower-interest offer, refinancing your student loan may be the answer. Even if you only have a small amount of student loan debt you’re responsible for, you may want to refinance if a significantly lower interest rate is available. You can also combine multiple loans with varying interest rates into one loan with refinancing.

Start by taking a look at what interest rates the lenders are currently advertising. If the rates are significantly better than the rates you’re paying on your loan, it’s worth investigating. Keep in mind that not everyone will qualify for those lower rates — you’ll need a healthy credit score and solid finances.

This is a basic outline of the steps it takes to refinance your loan:

1. Shop around for the best interest rate and terms. Make sure you can prequalify to know the rate you’ll be offered without a hard pull on your credit.
2. If your credit score is limited or low, ask a family member or trusted friend to cosign your student loan. If they have good credit, you’ll get a better interest rate.
3. Compare your offers and apply for the best one using the lender’s online application. In most cases, the process takes just a few minutes from start to approval.
4. Once you’re approved, ask for your 10-day payoff amount from your current lender, so you can pay off the loan without incurring any new interest charges.
5. Keep making payments to the original lender until the refinancing process is complete.

[Read: The Best Student Loan Refinance Companies in 2020]

Student loan FAQs

How do you save money on student loans?

Start paying your loan as early as possible. It may feel like less pressure to get a deferral after you graduate to search for a post-graduate job. But even a small contribution while you’re in school (like $25) can save you money on interest down the line.

You can also receive a small discount on your interest rate (0.25% or more) by electing autopay for your monthly payments, which also helps you avoid late fees. Lastly, if you have more than one student loan, you may save money by consolidating your student loans into one lower-interest loan (refinancing).

Are student loans tax deductible?

In many cases, the interest you paid on your student loan during the tax year is deductible. There may be a few exceptions depending on your filing status and loan obligation, but most of the time, it’s considered an income adjustment. The deduction is limited to whichever is less — $2,500 or the actual amount of internet you paid.

What is the difference between a private student loan and a federal student loan?

Federal student loans are provided by the government. A federal loan will have a fixed interest rate and an income-based repayment plan. They don’t require a credit check nor a cosigner (while private loans often do.) Private loans are offered by independent financial institutions (banks, credit unions, etc.) They can have a variety of repayment plans, terms lengths, and the interest rates can be varied or fixed.

Too long, didn’t read?

It can be scary to sign your name to such a large sum. Arm yourself with all the information you need to make the best choice — all the costs associated with attending your school, the impact of interest rates on the total amount you’ll owe and repayment plans that fit your lifestyle. Don’t be afraid to shop around for the best rates for your situation.

Methodology

The SimpleScore is our proprietary scoring metric to compare products and services at The Simple Dollar in a transparent, evidence-based way. Our editorial team identifies five quantifiable aspects to compare for every brand, determines the rating criteria for each aspect score, then averages the five aspect scores to produce a single SimpleScore. For student loans, we compared rates, loan amount, transparency, fees and extra perks for every major lender. Our ratings are meant to be a directional tool to help you in the process of choosing a student loan provider. Be sure to continue your research and shop around for the best student loan that fits your specific needs.

Keep reading

• How to Take Out Student Loans Without a Cosigner
• Traditional Financial Advice Is No Longer Relevant
• Will Consolidating Student Loans Help Your Credit Score?

Last updated June 26, 2020 to cover new rates and features.

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.

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 for Undergraduate 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 0.375%% 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.

The impact of COVID-19 on your student loans.

The coronavirus pandemic has already changed the financial industry, and student loans are no exception. For example, Navient, another major student loan servicer, provided a statement on its website for those affected: “If you’ve been impacted by the coronavirus and are having difficulty making payments, we encourage you to call us at 888-272-5543 to explore your options to reduce or postpone your payments.”

Many online lenders are also offering help to people affected by COVID-19. SoFi published an alert to its website where you can find a list of general service-specific contacts, as well as resources provided in response to the novel coronavirus. For support related to student loan payments, SoFi advises that “to inquire about forbearance and hardship relief due to COVID-19, please contact MOHELA at 877-292-7470 or send a secure message through sofi.mohela.com and they can address your concerns.”

More resources

• Where to Find Financial Relief During the COVID-19 Pandemic
• Federal Student Loan Payments Are Suspended Until September 30
• A College Student's Guide for Coronavirus Support