DollarGeek Presents:

Best Private Student Loans - November 2020

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A private student loan can make sense for the right situation. When you pay for your college, you should first fill out a FAFSA and exhaust your federal student loan options. If you still need help paying your way through college that is when you might consider a private student loan.

Remember that private student loans are lended out by private lenders, not the federal government. When you apply for a private student loan you will most likely need a co-signer. Check out the best private student loan lenders below and see which one can offer you the best rate.

Showing 1-7 of 7 accounts Advertising disclosure
OVERALL RATING:
(5.0)
on Ascent's website

Variable Rate

2.46%- 12.98%

varies on credit

Fixed Rate

3.39%- 14.50%

varies on credit

Variable Rate

2.46%- 12.98%

Fixed Rate

3.39%- 14.50%

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OVERALL RATING:
(5.0)
on College Avenue's website

Variable Rate

3.49% - 12.99%

varies on credit

Fixed Rate

1.09% - 11.98%

varies on credit

Variable Rate

3.49% - 12.99%

Fixed Rate

1.09% - 11.98%

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OVERALL RATING:
(4)
on Sallie Mae's website

Variable Rate

4.25% - 12.35%1

varies on credit

Fixed Rate

1.25% - 11.10%1

varies on credit

Variable Rate

4.25% - 12.35%

Fixed Rate

1.25% - 11.10%

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OVERALL RATING:
(4.5)
on CommonBond's website

Variable Rate

5.45% - 9.74%

varies on credit

Fixed Rate

3.52% - 9.50%

varies on credit

Variable Rate

5.45% - 9.74%

Fixed Rate

3.52% - 9.50%

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OVERALL RATING:
(4.5)
on LendKey's website

Variable Rate

1.25% - 11.10%

varies on credit

Fixed Rate

4.25% - 12.35%

varies on credit

Variable Rate

1.25% - 11.10%

Fixed Rate

4.25% - 12.35%

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OVERALL RATING:
(4.5)
on SoFi's website

Variable Rate

1.87% - 11.66%1

varies on credit

Fixed Rate

4.23% - 11.83%1

varies on credit

Variable Rate

1.87% - 11.66%

Fixed Rate

4.23% - 11.83%

OVERALL RATING:
(4.5)
on Citizens Bank's website

Variable Rate

1.21% - 10.97%

varies on credit

Fixed Rate

4.25% - 11.53%

varies on credit

Variable Rate

1.21% - 10.97%

Fixed Rate

4.25% - 11.53%

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Best Private Student Loan Lenders of November 2020

Variable APR

Fixed APR

Min. Credit Score

2.46%- 12.98%
3.39%- 14.50%

650

3.49% - 12.99%
1.09% - 11.98%

Mid 600's

4.25% - 12.35%
1.25% - 11.10%

N/A

5.45% - 9.74%
3.52% - 9.50%

660

1.25% - 11.10%
4.25% - 12.35%

660

1.87% - 11.66%
4.23% - 11.83%

N/A

1.21% - 10.97%
4.25% - 11.53%

N/A

Best for those who don't have a co-signer

(5.0)

Min. Credit Score

650

VARIABLE RATE

2.46%- 12.98%

Fixed Rate

3.39%- 14.50%

Overview

Ascent is an online lender that provides Private Student loans for college aspirants. The online lender offers three different types of loans, including Ascent cosigned credit-based loan, Ascent non-cosigned credit-based loan, and Ascent non-cosigned future income-based loan.

Amid an industry full of lenders seeking cosigners, Ascent carves a unique name with its future income-based private student loan. These loans do not require a cosigner or credit history, although applicants should be upperclassmen to boost their chances of approval.

As an online lender, the entire loan application process can be completed through the internet. Loan applicants can find their pre-qualified rates with a soft credit pull. Ascent disburses funds directly to the school or participating colleges.

What We Like

  • Ascent offers a longer forbearance period (24 months).
  • Its non-cosigned future income-based plan allows applicants with no cosigners, credit, or income access private student loans.
  • Ascent distributes thousands of dollars in scholarships every year. There is a 1% cash back program for borrowers finishing their graduation.

Areas to Watch Out for

  • Only college juniors and seniors can apply for non-cosigner future-income based plans.

Best for those who want the most flexible repayment options

(5.0)

Min. Credit Score

Mid 600's

VARIABLE RATE

3.49% - 12.99%

Fixed Rate

1.09% - 11.98%

Overview

College Ave is an online private student loan and refinancing loan provider. Started in 2014, the online lender offers flexible repayment options, competitive interest rates, and quick loan processing.

Our analysis reveals that College Ave is one of the best lenders when it comes to flexible loan terms and repayment options. Borrowers can choose a loan term between 5 years and 20 years, depending on the type of private student loan. In terms of repayment options, College Ave provides four repayment options, including:

  • Immediate payments while you’re in college.
  • Fixed $25 monthly payments throughout college
  • Interest-only payments
  • Payment deferment until graduation or completion of course.

College Ave offers a grace period of up to 9 months. Some additional features of College Ave private student loans include the option to pay more than minimum payments and choose biweekly payments.

What We Like

  • College Ave provides flexible repayment options.
  • Borrowers can choose a loan term of 5 to 20 years.
  • A grace period of up to 9 months is available with College Ave student loans.

Areas to Watch Out for

  • As common with most private student loan lenders, cosigner release is possible only after half of the repayment term has passed successfully.

Best for competitive rates and part-time students

(4.0)

Min. Credit Score

N/A

VARIABLE RATE

4.25% - 12.35%

Fixed Rate

1.25% - 11.10%

Overview

Sallie Mae is one of the most diversified lenders on our list. Sallie Mae started as a federal student loan provider, but since 2014, it has been offering private student loans. The student loan provider offers loans for undergraduate, graduate, medical, dental, law, MBA, and even for K-12 studies.

A key differentiator between Sallie Mae and other private student loan providers is the fact that the former is some of the very few lenders offering loans to part-time students. The private student loans from Sallie Mae come with zero origination charges and prepayment penalties.

Sallie Mae offers competitive interest rates. Borrowers can receive lower APRs by choosing in-school repayments. Additionally, there is a rate discount of 0.25% with auto-debit functionality. Adding a cosigner is another way to lower overall interest rates on a private student loan. As per Sallie Mae, 88% of its undergraduate borrowers apply with a cosigner.

What We Like

  • Sallie Mae provides private student loans for part-time students.
  • It has one of the most diversified student loan products.

Areas to Watch Out for

  • If you want to check your eligibility for a loan, you’ll have to allow a hard inquiry on your credit report.

Best for those who want flexible forbearance options

(4.5)

Min. Credit Score

Mid 600's

VARIABLE RATE

5.45% - 9.74%

Fixed Rate

3.52% - 9.50%

Overview

CommonBond is a new age lender that offers both student loan refinancing and private student loans. Its private student loans are available to borrowers pursuing undergraduate, graduate, MBA, dental, or medical programs.

Unlike most lenders, CommonBond makes it necessary to have a cosigner for private student loans. On the flip side, it has a comparatively shorter cosigner release period, 24 months. CommonBond provides a free money mentor to every borrower, advising on budgeting, financial management, and career guidance.

CommonBond provides a forbearance period of 12 months, in increments of three months at a time. It offers multiple repayment options, such as deferred payments, fixed payments ($25), interest-only payments, and immediate payments.

CommonBond doesn’t charge a loan origination fee or prepayment penalty, but it does have a late payment penalty. CommonBond doesn’t operate in Nevada and Mississippi.

What We Like

  • CommonBond has a short cosigner release period, 24 months.
  • There are no origination or prepayment penalties.
  • Each borrower gets access to a free money mentor.

Areas to Watch Out for

  • Borrowers must have a cosigner to qualify for a loan.

Best for those who want to work with a smaller bank

(4.5)

Min. Credit Score

Mid 600's

VARIABLE RATE

1.25% - 11.10%

Fixed Rate

4.25% - 12.35%

Overview

LendKey, unlike other lenders in our list, is a lending marketplace that connects borrowers with the right lenders. The online loan marketplace has a partner network of over 13,000 lenders, community banks, and credit unions.

One of the primary benefits of LendKey is that it puts together quotations from multiple lenders, helping borrowers choose the best terms for their private student loans. The loan rates and terms may vary among different lenders, but LendKey keeps loan origination and servicing in-house.

All LendKey private student loans come with zero origination fees, prepayment charges, and application fees. Also, the online marketplace offers a forbearance period of 18 months, much longer than most private student loan providers.

LendKey lags other lenders in terms of repayment options and not having the ability to check rates upfront.

What We Like

  • LendKey allows borrowers to compare private student loan terms from different lenders.
  • It offers a forbearance period of 18 months, longer than most lenders.
  • There are no application fees, loan origination fees, or prepayment penalties.

Areas to Watch Out for

  • LendKey offers limited repayment options.
  • Borrowers don’t have access to pre-qualification via a soft credit check.

Best for those who want member benefits

(4.5)

Min. Credit Score

Mid 600's

VARIABLE RATE

1.87% - 11.66%

Fixed Rate

4.23% - 11.83%

Overview

SoFi is a leader in the student loan refinancing space. The online lender also provides private student loans, with exclusive member benefits, no-fee structure, and lower interest rates. Its private student loans include undergraduate, graduate, law and MBA, and parent loans.

Borrowers can receive a free quotation online in as little as three minutes through a soft credit inquiry. SoFi has a no-fee structure, which means there are no loan origination fees, no late fees, and no insufficient funds fee with SoFi private student loans.

We also found SoFi’s interest rates competitive and even lower than most online lenders. The online lender offers four repayment options, including immediate payments, fixed $25 payments, interest-only payments, and deferred repayments.

SoFi offers a 12-month forbearance period through the loan term in intervals of three months each. The online lender also has an unemployment protection policy in place.

What We Like

  • SoFi doesn’t charge any fees for private student loan processing and maintenance.
  • Borrowers receive exclusive membership benefits, including rate discounts, financial planning guides, and career coaching, among other services.
  • SoFi has an unemployment protection policy, with a maximum forbearance of 12 months.

Areas to Watch Out for

  • SoFi offers its private student loans to US citizens only.

Best for international students

(4.5)

Min. Credit Score

N/A

VARIABLE RATE

1.21% - 10.97%

Fixed Rate

4.25% - 11.53%

Overview

Citizens One comes from a traditional financial background, a part of Citizens Bank, which allows it to offer competitive interest rates, flexible repayment terms, and additional loyalty discounts to its existing customers. Citizens One offers both private student loans and refinancing solutions for borrowers.

Citizens One provides private student loans for undergraduate and graduate programs, along with parent loans. A distinguishing feature of Citizens One is the availability of multi-year approval, saving borrowers the hassle of applying every year.

Citizens One offers a rate discount of up to 0.25% to its existing customers. Borrowers can receive an additional rate cut of 0.25% through auto-debit features. There are no application charges, origination fees, or loan disbursement costs involved with these loans.

The private student loans from Citizens One offer flexible repayment options, including interest-only payment, deferred payments, and immediate payment (principal and interest).

What We Like

  • Citizens One offers multi-year loan approval.
  • A total discount of up to 0.50% is applicable on interest rates.

Areas to Watch Out for

  • Citizens One required a hard credit pull to offer quotations.

Learn About Private Student Loans

Gain some clarity with our geeky insight.

What is a private student loan?

A private student loan is a credit-based loan for college. This loan can help students cover the gap between financial aid received and the full cost of attendance. It’s important to know that private student loans are issued by private lending institutions, like banks and credit unions – not the government. When you apply for a private student loan, you will fill out an application and the lender will confirm you meet their criteria (credit score, verification of school registration, etc).

Why do students take out private student loans?

Private student loans are used if you can’t access enough funds to cover your college expenses. Private student loans can help students fill the gap.

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

The difference simply comes down to who is lending you the money. Private student loans are issued to students by a private lending institution like a bank or credit union. Federal student loans are issued by the U.S. Department of Education.

How much money can I borrow with a private student loan?

While it does vary, private lenders have limits on how much students can borrow, but you might be able to borrow more than what you would receive through federal aid.

According to the U.S. Department of Education’s website, the aggregate amount you’re allowed to borrow through federal aid is capped at $57,500 for an undergraduate student. In most cases when you’re applying for a private student loan, you can borrow the entire cost of your education, including living expenses.

How and when do you pay back your private student loan?

There are four common ways to pay back your private student loan:

1. Immediate Repayment of your loan

You can start immediately paying the full monthly payment of the student loan (principal + interest) while you’re in school.

2. Interest-Only Repayment

Interest-only payments can be made while you’re in school. This will pay the interest as you go so it doesn’t accrue and get added to your balance.

3. Partial Interest-Only Payment

A partial interest repayment plan lets you pay a fixed amount (for example – such as $25 or $50 a month). While this amount won’t take care of all the interest you owe, it will keep your loan balance from growing too quickly. Choosing this plan can be a good way to stay on top of your loan and reduce the total amount repaid.

4. Full Deferment

Full deferment will allow you to completely postpone making your student loan payments until graduation. It’s important to remember that interest will accrue during the full deferment period and will be capitalized at the end of it.

What are the advantages of applying for a private student loan with a creditworthy cosigner?

It is rare that a private student loan lender will let you apply on your own. Most students will need to apply with a creditworthy cosigner to meet the lenders eligibility requirements. These requirements usually include a strong credit profile and income. Having a cosigner with a healthy credit score can help you qualify for a lower interest rate.

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