DollarGeek Presents:

Best Private Student Loans - May 2021

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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 (free application for federal student aid) 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. Check out who made our list of the best student loans.

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

Variable Rate

1.04% - 11.98%

varies on credit

Fixed Rate

3.34% - 12.99%

varies on credit

Variable Rate

1.04% - 11.98%

Fixed Rate

3.34% - 12.99%

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OVERALL RATING:
(5.0)
on Ascent's website

Variable Rate

2.14% - 12.94%

varies on credit

Fixed Rate

3.34% - 14.50%

varies on credit

Variable Rate

2.14% - 12.94%

Fixed Rate

3.34% - 14.50%

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

Variable Rate

1.13% - 11.23%1

varies on credit

Fixed Rate

4.25% - 12.59%1

varies on credit

Variable Rate

1.13% - 11.23%

Fixed Rate

4.25% - 12.59%

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OVERALL RATING:
(4.5)
on CommonBond's website

Variable Rate

6.59% - 9.39%

varies on credit

Fixed Rate

6.98% - 10.74%

varies on credit

Variable Rate

6.59% - 9.39%

Fixed Rate

6.98% - 10.74%

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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

1.12% - 11.89%1

varies on credit

Fixed Rate

4.13% - 11.52%1

varies on credit

Variable Rate

1.12% - 11.89%

Fixed Rate

4.13% - 11.52%

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 and Interest Rates of May 2021

Variable Interest Rate

Fixed Interest Rate

Min. Credit Score

1.04% - 11.98%
3.34% - 12.99%

Mid 600's

2.14% - 12.94%
3.34% - 14.50%

650

1.13% - 11.23%
4.25% - 12.59%

N/A

6.59% - 9.39%
6.98% - 10.74%

660

1.25% - 11.10%
4.25% - 12.35%

660

1.12% - 11.89%
4.13% - 11.52%

N/A

1.21% - 10.97%
4.25% - 11.53%

N/A

*rates are shown with autopay

Best for those who want the most flexible repayment options and a low interest rate

(5.0)

Min. Credit Score

Mid 600's

VARIABLE RATE

1.04% - 11.98%

Fixed Rate

3.34% - 12.99%

Overview

College Ave is an online private student loan and refinancing loan provider for undergrads and graduate students. 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. The type of loan can be used for graduate school, mba, dental school, law school and med school. 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.
  • 0.25% interest rate discount with autopay.

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 those who don't have a co-signer

(5.0)

Min. Credit Score

650

VARIABLE RATE

2.14% - 12.94%

Fixed Rate

3.34% - 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.
  • Autopay discount of 0.25%.

Areas to Watch Out for

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

Best for competitive interest rates and part-time students

(4.0)

Min. Credit Score

N/A

VARIABLE RATE

1.13% - 11.23%

Fixed Rate

4.25% - 12.59%

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.
  • Sign up for automatic payments and receive a 0.25% autopay discount on your interest rate.

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

6.59% - 9.39%

Fixed Rate

6.98% - 10.74%

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.Sign up for automatic payments and receive a 0.25% discount on your interest rate. 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 and competitive interest rates

(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.
  • Sign up for automatic payments and receive a 0.25% discount on your interest rate.

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

1.12% - 11.89%

Fixed Rate

4.13% - 11.52%

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.
  • Competitive rates for graduate student loans.

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.

Best Private Student Loans: Learn More

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).

A private student loan is suitable for candidates who have exhausted their federal aid options. If you’re searching for the best private student loans, here are some options for you.

Some individuals may find it difficult to qualify for a private student loan. Each lender has its own credit score requirements, interest rates, and even a co-signer.

  • College Ave (low credit score requirements and interest rates)
  • Ascent (No co-signer)
  • Sallie Mae (part-time student loans)

Private student loans are a good option for individuals who have used their federal aid but need further financial assistance. It is critical to choose a private student loan provider with flexible payment terms, forbearance options, and competitive interest rates.

Unfortunately, private student loans do not qualify for loan forgiveness programs. However, there are other options to get relief, such as forbearance, refinancing, and loan restructuring. As a student, always use your federal aid before applying for a private student loan.

Yes, most private student loan providers will directly transfer your student loan to the institution. In order to qualify for a private student loan, you have to be enrolled in an eligible school, have a good credit/income profile, and a co-signer (helps in lowering interest rates).

Private student loans have certain limitations in comparison to federal education aid. You are likely to pay higher interest rates, lack loan forgiveness options, and have strict lending requirements. They are suitable to be used as a bridge financial option after exhausting federal aid.good credit/income profile, and a co-signer (helps in lowering interest rates).

Federal student loans are better than private student loans as they offer lower interest rates, have lower eligibility requirements, eligible for loan forgiveness programs, and forbearance. However, if you have already used your federal student loans, you can apply for private student loans.

Most private student loans cover the total amount of college education or the cost of attendance. Although, you may have to borrow at least $1,000 to $5,000 ($10,000 in some states) when applying for a private student loan. Here are some of the best private student loans:

  • College Ave ($1,000 to cost of attendance)
  • Ascent ($1,000 to $200,000)
  • Sallie Mae ($1,000 to cost of attendance)
  • LendKey ($2,000 to $160,000)
  • CommondBond ($5k to $500k)

Not repaying your student loan isn’t an option for borrowers. If you do not pay your student loan, your loan goes into debt collection, which means day and night debt collection calls and unpleasant visits. The lender has the right to approach the court and file a case against you.

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. After you apply with a cosigner, the lender will then communicate with your school to confirm your enrollment and loan amount.

Student loans come with two interest rate options, fixed and variable rates. While fixed interest rates work better in a low-interest environment, variable interest rates provide the benefit of any movement in interest rates throughout the repayment period.

The net student loan debt in the US is over $1.52 trillion. Here are some interesting student loan debt figures.

  • Average student loan debt per student: $32,731
  • Number of student loan borrowers: 44.7 million
  • State with the highest average student loan debt: Connecticut ($38,510 for the Class of 2017)

Other helpful resources