Considering multiple options for your student loans? You can pay for your college by working, using Federal loans, or private lenders. And private student loans could be a great option for you if you don't qualify for a Federal loan or don't want to work your way through college.
Remember, you might run into a graduate student loan program, find several types of undergraduate loans, pay a different interest rate with every loan servicer or even find a consolidation loan if you’ve been in school for many years.
These loans are offered by private organizations such as banks, credit unions and online lenders. Here’s Benzinga’s guide to the best private student loans, or more specifically, the best private student loan lenders.
Best Lenders for Private Student Loans
Some of the best private student loans can come from traditional banks, credit unions and even online lenders. Keep reading to know more about these lenders and compare which APRs, fees and credit eligibility work best for you.
1. Best for Additional Repayment Guidance: Student Loan Hero
Student Loan Hero by LendingTree is an unbiased platform designed to help you organize, manage and repay your debt. It understands that every student is in a different financial situation and its goal is to help you understand your loans and make smart repayment decisions.
Student Loan Hero can also help you sync both your already-existing private and federal student loans in 1 centralized location, provide an in-depth student loan summary and financial analysis and help you plan your repayment on both federal and private loans in a way that best fits your financial situation.
Student Loan Hero compiles various online private student loan providers and various terms, rates and eligibility requirements and allows you to compare these qualifications on its user-friendly online platform.
2. Best Customer Service: Credible
*Student Loan Rate and Terms Disclosure: 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 4.17% APR – 16.69% APR and Variable interest rates from 5.37% – 16.85% 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.
Prequalified rates are based on the information you provide and a soft credit inquiry. Receiving prequalified rates does not guarantee that the Lender will extend you an offer of credit. You are not yet approved for a loan or a specific rate. All credit decisions, including loan approval, if any, are determined by Lenders, in their sole discretion. Rates and terms are subject to change without notice. Rates from Lenders may differ from prequalified rates due to factors which may include, but are not limited to: (i) changes in your personal credit circumstances; (ii) additional information in your hard credit pull and/or additional information you provide (or are unable to provide) to the Lender during the underwriting process; and/or (iii) changes in APRs (e.g., an increase in the rate index between the time of prequalification and the time of application or loan closing. (Or, if the loan option is a variable rate loan, then the interest rate index used to set the APR is subject to increases or decreases at any time). Lenders reserve the right to change or withdraw the prequalified rates at any time.
Credible knows that private student loans are a great help for paying for school after you hit your limit for federal loans.
Loan options shown through Credible’s platform offer flexible repayment plans to fit your needs. Filling out documentation is straightforward because you won’t have to fill out duplicate forms. To make the process even easier, Credible’s services are completely fee-free, just like the loans it pairs you with. Loans found through Credible have no origination fees, service fees or prepayment penalties.
Lastly, Credible knows the value of great customer service, which is why it provides 3-way phone support that connects you directly with lenders to answer any questions you have throughout the loan process.
3. Best for Finding Various Lenders: LendKey
LendKey focuses on transforming the $3.6 trillion consumer lending market by helping the country’s 13,000+ community financial institutions provide online lending services. Its innovative data technology matches you with banks and credit unions to create the most accessible and affordable online borrowing options. By letting you borrow directly from trusted local and nonprofit lenders, LendKey gives you opportunities for transparent, low-interest lending.
LendKey’s application process for private student loans is streamlined and simple. Its partners offer competitive interest rates and it prioritizes customer service throughout the entire lending process. Through LendKey, you and its lenders have the advantage of automating most of the loan process so you’re ready for the upcoming school year.
4. Best No-Fee Policy: SoFi
Fixed rates range from 5.24% APR to 9.99% APR with 0.25% autopay discount. Variable rates range from 6.24% APR to 9.99% APR with a 0.25% autopay
discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 13.95% APR; 15- and 20-
year terms are capped at 13.95% APR. SoFi rate ranges are current as of 02/06/24 and are subject to change at any time. Your actual rate will be within the
range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other
factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived
by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of
one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. 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. This
benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest
rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required
to receive a loan from SoFi. You may pay more interest over the life of the loan if you refinance with an extended term.
Every product or bit of advice SoFi provides is geared toward helping its members get their money right. SoFi innovates and builds to give you what you need to make your financial goals a reality.
SoFi launched its private student loan products to help students get through school with the least amount of financial strain possible. This means a quick application and approval process as well as a 100% no-fee policy for origination, late payments or insufficient funds. SoFi’s application is also free.
SoFi private loans can cover up to the entire cost of college attendance, including tuition, food, books and supplies, room and board, transportation and personal expenses. SoFi has helped over 300,000 students make smart financial decisions through transparency and supportive online resources.
5. Best for Cosigner Flexibility: CommonBond
CommonBond simplifies the process of taking out loans while you focus on your education. Whether you’re starting your freshman year or graduating with debt, CommonBond offers lower rates and simpler options.
CommonBond can offer you private loans for undergraduate, graduate, business, dental and medical school. These loans are designed to let you do more, not less, which is why CommonBond provides a simple application process, free financial guidance and competitive interest rates.
You can enjoy a 6-month grace period and postpone your payments for up to 12 months over the life of your loan. If you’re ready to take the lead after having the help of a trusted cosigner, you can apply to let them off the hook after 2 years of on-time payments on your CommonBond private loan.
6. Best Discounts: Sallie Mae
Sallie Mae can support your college experience with products like its own private student loans, financial tools and additional resources.
Sallie Mae’s private student loans provide funding for all your qualified expenses such as tuition, fees, books, room and board, tech and even travel. After you apply once, you get cash you need for the entire school year — funds will be sent for each term as requested by your school.
No prepayment or origination fees mean you can pay as early and as much as you want with no penalty. The best part about Sallie Mae’s private loans is that you can lower your loan’s interest rate when you choose to start monthly payments while you’re still in school. You can also get a 0.25% discount after setting up automatic payments from your debit account.
7. Best for a Fixed APR: MEFA
Massachusetts Educational Financing Authority (MEFA) is committed to supporting the dreams of students just like you — and it’s not just for Massachusetts residents. MEFA’s goal is to help you save money on your student loans. As a trusted lender for education financing, MEFA offers private student loans to help you and your family plan for the future and keep you close to success.
Private student loans through MEFA have a low fixed APR rate to ensure stable, predictable monthly payments for the entirety of the loan. Its flexible fee-free payment options also help take away the stress of the repayment process, as well as the loans’ no-fee policy for origination, application and prepayment.
Qualifying for a Private Student Loan
Not every student automatically qualifies for a co9llege loan. In order to qualify:
- Check with your school’s financial aid information to ensure that you’re enrolled in a qualifying program.
- Make sure you’re enrolled at least part-time or full time. Most lenders you to be enrolled at least part-time.
- You must have a high school diploma, GED or home school certificate.
- Find out whether you must present your Social Security information and be a U.S. citizen or a legal resident.
- You may need a cosigner. Ask your private student loan lender what you need to qualify.
What to Look for in an Education Loan
When you’re lookin for an undergraduate student loan or a graduate school loan, you need to look for several key characteristics that tell you this is the right lender for your situation:
Disbursement options: Make sure you understand how the loan is paid to you, when and how much at a time. Some loans pay all at once, but others do not. You need to know the loan type you’ve found and how each loan payment will impact your personal budget.
Loan costs: Make sure you know what other costs are associated with the loan. You’re taking on enough student debt without added too many extra costs to the value of the loan.
Student loan refinancing options: Student loan borrowers deserve to know that they can refinance and save money in the future.
Loan forgiveness options: If loan forgiveness is an option in the future, you need to know exactly how the payment pause will work or the documentation you need to have the loan fully forgiven. Don’t sign on the dotted line without this information. Yes, loan servicers will make you keep paying on the loan if you cannot fulfill their forgiveness requirements or those set forth by the government.
Interest rate discounts: Ask for an interest rate discount so that you can save as much money as possible. You can reduce your interest payment, cut into your school loans and you might even want to change servicers if you find a better student loan interest rate.
Simple repayment terms: From graduate students to freshmen in college, you need to know how you will repay. Loan approval is a lovely thing, but you need to know what is expected of you once you graduate. There may be some forbearance options (or even refinancing), but you need to how and when to pay once the time comes.
Get Your Private Student Loan with No Stress
If you’ve exhausted your federal loan options and must consider private student loans, there are a ton of great options out there to help you finish your degree. Weigh your options with ease and keep the repayment process as low stress as possible.
When should you get a private student loan?
You should apply for a private student loan after you have exhausted all other options to get a Federal student loan. Another time you should consider a private student loan is if the Federal loan doesn’t cover all your costs and you need to supplement it.
How do you find the best student loan?
To find the best student loan, speak to numerous lenders and ask about rates and terms. Compare them to find the lender that best suits your needs.
What is better student loans or private loans?
When comparing Fedeal student loans and private loans, you will pay less for your loan if it comes from the Federal government. The government typically has lower interest rates and you won’t have to undergo a credit check when applying for one.
Fixed rates from 8.99% APR to 29.99% APR reflect the 0.25% autopay interest rate discount and a 0.25% direct deposit interest rate discount. SoFi rate ranges are current as of 02/06/2024 and are subject to change without notice. The average of SoFi Personal Loans funded in 2022 was around $30K. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0%-7%, which will be deducted from any loan proceeds you receive.
Autopay: 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. Autopay is not required to receive a loan from SoFi.
Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.
