Best Private Student Loan Providers
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If you or your child are attending college soon, you might be comparing private student lenders. Student loans make college tuition and other expenses more manageable by breaking them into monthly payments.
However, there isn’t a shortage of private student loan lenders. It’s important for borrowers to assess each lender’s student loan interest rate, terms, perks, and other details. These are some of the top private student lenders to consider.
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Overview of best private student loan providers
Private Student Loan Provider | Best For |
Sallie Mae | Scholarships |
SoFi | Payment Plans |
College Ave | Student Credit Cards |
Credible | Interest Rates |
Earnest | Extended Grace Period |
Ascent | Bad Credit |
Elfi | No Fees |
Sallie Mae
Sallie Mae started as a government-sponsored company in 1972 before becoming a private lender in 2014. The lender lets borrowers choose between fixed and variable interest rates. You can get approved for financing before your FAFSA status is finalized, which can reduce stress during the process. The lender offers loans for undergraduate students, graduate students, and people who are training for specific careers.
If you get approved the first time, chances are you’ll continue to get approved each time you approach Sallie Mae for a private student loan. The lender mentions that 95% of undergraduate students who get financing the first time end up getting a loan next year. You have the option to reduce your interest rate by 0.25% if you pay by auto debit from your bank account.
The lender does not have any prepayment penalties or origination fees. If you need extra money, you can also use Sallie Mae’s scholarship dashboard to find opportunities. The lender even has a $2,000 scholarship available, and it only takes two minutes to fill out the form. Sallie Mae gives out a $2,000 scholarship to one lucky student every month.
SoFi
SoFi offers numerous financial products, such as credit cards, bank accounts, and brokerage accounts. The company also offers student loans for graduate school, undergraduate, and people who are pursuing specific careers. SoFi offers time-sensitive rate discount promotions for people who get approved for a SoFi Private Student Loan within the specified deadline. Even if you miss the deadline, you can qualify for a 0.25% AutoPay discount.
The fintech firm is one of the few student loan companies that lets you check your rate without any impact on your credit report. You only endure a hard credit check when you want to accept an offer. More than one million students have received private loans from SoFi, and there’s no loan limit to how much you can borrow as long as the money is only used for applicable college expenses.
SoFi does not have any fees, and the loan offers several payment terms ranging from 5-15 years. The lender also offers a $250 cash bonus if you have a 3.0 GPA or higher. If you receive a student loan with the help of a cosigner, you can apply to release a cosigner after making 24 consecutive monthly loan payments.
You can choose to defer payments, pay interest in school, make a fixed $25 monthly payment while in school, or start paying for the loan right away. Most lenders offer those options, but few of them let you earn and redeem points to pay off your loan. SoFi users can use the points they redeem from various activities to reduce their loan balances.
5.24% - 12.42% VARIABLE rate APRs 4.17% - 16.69% FIXED rate APRs
- Easy online application!
- No origination fees, late fees, and no insufficient fund fees
- Flexible repayment options to help you find the right loan for you
- Student loans for college, graduate, law, MBA, Health Professionals, and Parent loans
- Students are 5x more likely to be approved with a cosigner
- 0.25% discount when you set up autopay
College Ave
College Ave offers a range of student loans that align with college students’ budgets and goals. The lender has flexible options that range from 5-15 years. A single loan can cover 100% of your attendance cost. You can apply for a loan in as little as three minutes and receive an instant credit decision.
The lender lets you choose between fixed and variable interest rates. You can also qualify for a 0.25% rate reduction if you use AutoPay. The private student lender does not charge any loan application fees and approves 95% of borrowers for additional loans.
You can make full monthly payments on the loan right away to save on interest. However, borrowers also have the option to make interest payments, a flat payment of $25/mo, or defer payments until graduation. College Ave has a 6-month grace period for its loans if you do not wish to pay the balance right away.
College Ave isn’t only good for student loans. You can also take out a student card that doesn’t have any interest or late fees. You’ll receive cashback on all purchases. Applicants do not need to go through a credit check to qualify for the card.
Credible
Credible offers access to some of the most competitive rates, with fixed APRs as low as 3.74%. The company was founded in 2012 and is a lending marketplace that lets you compare the best rates and terms. If you want to quickly compare private student loans from several companies, Credible is among the top choices.
Students don’t have to make any prepayment penalties and can easily invite a cosigner to help them out. You can choose from several repayment terms, depending on what lenders offer. Repayment terms usually range from 5-15 years.
Credible doesn’t offer any specific discounts. However, most of the lenders who are on the Credible lending marketplace offers discounts. AutoPay is a common way to save money that can result in a 0.25% rate reduction.
Earnest
Earnest has annual percentage rates that start at 4.17% if you can get a cosigner. You can still receive a private student loan if you aren’t applying with a cosigner, and the rate for those loans starts at 5.48% APR. You can score a 0.25% AutoPay discount to save on interest.
Even if you feel confident about going with Earnest, you should still apply for multiple student loans. That’s because Earnest offers a 100% rate match guarantee. If Earnest matches the rate, you will also receive a $100 Amazon Gift Card once the match is finalized.
Earnest also gives you more time to get started on loan payments than most of its competitors. While a 6-month grace period is the industry standard, Earnest gives you nine months before you have to start making payments. You can also choose to make loan payments before you graduate to reduce your interest.
The private student loan provider does not have any fees and lets you skip a loan payment every year. While skipping a loan payment allows interest to accumulate, it’s nice to know that you have this option if finances are tight. Earnest will let you know about your application’s status within 72 hours.
Ascent
You don’t need the best credit history to get a student loan with Ascent. The private lender offers several choices for people who aren’t able to get cosigners. Students can also receive outcomes-based student loans without a cosigner if they don’t have the best credit scores.
Ascent also lets you check your rate without any impact on your credit score. Ascent has competitive rates that drop to 3.79% APR for students with good credit. A cosigner will help you receive the low interest rates, but you can receive a competitive loan without a cosigner. Those loans have rates as low as 8.65% APR if they are based on good credit. People with bad credit can get a fixed rate as low as 13.09% APR for an Outcomes-Based loan. Parent plus loans have fixed interest rates as low as 4.70% APR. Variable interest rates are currently as low as 5.74% APR.
You can receive a 0.25% discount if you set up AutoPay, and Ascent has a 9-month grace period instead of the usual 6-month timeframe. You also won’t have to worry about any origination fees, and there’s no penalty for early payments. Ascent also offers opportunities to receive cash, such as scholarships, Ascent Rewards, and Amazon Gift Cards if you refer people to the lender.
Elfi
Elfi has a 4.8 Trustpilot rating and offers student loan terms that range from 5-15 years. Borrowers can also refinance their existing loans with terms ranging from 5-20 years. Parent loans have 5-10 year terms. Borrowers can prequalify in a few minutes and choose between fixed or variable rates.
When you apply for a loan with Elfi, you won’t have to pay application or origination fees. There also aren’t any prepayment penalties. The minimum loan amount is $1,000, and you can use it to cover all applicable college costs. Rates are as low as 4.50% for fixed-rate loans and 6.00% for variable-rate loans.
Borrowers can choose from immediate, interest-only, flat, or deferment plans. The borrower or cosigner must have a minimum credit score of 680 to qualify. The student must also be enrolled at least half-time in a Bachelor’s degree program.
5.24% - 12.42% VARIABLE rate APRs 4.17% - 16.69% FIXED rate APRs
- Easy online application!
- No origination fees, late fees, and no insufficient fund fees
- Flexible repayment options to help you find the right loan for you
- Student loans for college, graduate, law, MBA, Health Professionals, and Parent loans
- Students are 5x more likely to be approved with a cosigner
- 0.25% discount when you set up autopay
Summary of the best student loan providers
Private Student Loan Provider | Interest Rate Range | Term Lengths | Types of Student Loans |
Sallie Mae | 4.15% - 15.70% | 5, 10, and 15 years | Undergraduate, Graduate, and Career Training |
SoFi | 4.74% - 15.86% | 5, 7, 10, and 15 years | Undergraduate, Graduate, and Career Training |
College Ave | 3.99% - 17.99% | 5, 8, 10, and 15 years | Undergraduate, Graduate, and Career Loans |
Credible | 3.74% - 17.99% | Depends on the lender | Undergraduate, Graduate, and Career Loans |
Earnest | 4.17% - 16.85% | 5, 7, 10, 12, and 15 years | Undergraduate, Graduate, and Career Loans |
Ascent | 3.79% - 15.85% | 5, 7, 10, 12, 15, and 20 years | Undergraduate, Graduate, and Career Loans |
Elfi | 5.28% - 8.99% | 5, 7, 10, and 15 years | Undergraduate, Graduate, and Career Loans |
Pros and cons
Pros
- Make the cost of college more manageable.
- The grace period typically ranges from 6-9 months.
- You can find loans with competitive rates.
- Very few fees (sometimes none).
Cons
- Interest grows right away.
- You can end up paying your student loans for many years or have to consider student loan refinancing to keep up with living expenses.
- You need a cosigner to receive the best interest rates.
- Not every lender has a cosigner release.
FAQs
Is a private student loan a good idea?
A private student loan can make the cost of college more reasonable for many students.
However, interest will accumulate the moment you take out a loan. It’s better to use financial aid
and federal student loans, but many students also need private loans.
Is it hard to get a private student loan?
It’s more difficult to get a private student loan than a federal loan. You will have to fulfill credit
score and income requirements to get one of these loans. Having a cosigner will increase your
chances of getting approved and help you secure a lower interest rate.
Can private student loans be forgiven?
The government cannot forgive any private student loans. A loan only gets forgiven if the
borrower passes away or incurs a permanent disability. Most people will have to pay off their
private student loans without any intervention.
Why you should (or shouldn’t) take out a private student loan
Private student loans make the most sense for people who can find a creditworthy cosigner with a low debt-to-income ratio. However, most students may have to resort to these loans just to afford the cost of attendance. Federal student loans are the better choice since interest does not accumulate on those loans right away. However, the federal loan program has lower loan amounts.
Borrowing limits are more generous for private student lenders. You can get undergraduate loans that cover all of your college costs as long as you fulfill eligibility requirements. You can also choose from several student loan options to avoid higher interest rates and receive a reasonable payment plan.
5.24% - 12.42% VARIABLE rate APRs 4.17% - 16.69% FIXED rate APRs
- Easy online application!
- No origination fees, late fees, and no insufficient fund fees
- Flexible repayment options to help you find the right loan for you
- Student loans for college, graduate, law, MBA, Health Professionals, and Parent loans
- Students are 5x more likely to be approved with a cosigner
- 0.25% discount when you set up autopay
The bottom line
The best private student loan providers offer competitive rates and terms. While it’s optimal to borrow as little as possible, many students have to take out loans to keep up with rising tuition costs. These financial products are not eligible for loan forgiveness programs, so you will have to keep up with on-time payments throughout the life of the loan.
Luckily, you can choose from several repayment options if you want more flexibility with monthly payments. A shorter term will result in higher monthly payments, but you will get out of debt faster. Students should assess the financial impact of a student loan and their potential ROI before attending college. It may also be a good idea for students to look at affordable colleges and use them as stepping stones instead of chasing an expensive big-name university that results in substantial student loan debt.
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