Best Private Student Loans

Private Student Loans

Banks and financial institutions provide private student loans, and the approvals of these loans often depend on the credit score. Private student loans can be acquired with or without a co-signer and the limits can vary depending on the institution, the credit score, and other eligibility factors. There are also parent private student loans available to help parents secure funds for their child’s college tuition.

Federal Student Loans

Federal student loans (also known as Federal Stafford loans) are provided by the government and are approved through FAFSA submission. There are usually three kinds of federal loans that apply to students, namely direct subsidized and unsubsidized, and PLUS loans such as the Grad PLUS loan.

There are six important points to keep in mind while choosing private student loans.

Different lenders have different interest rates and thus, this should be taken into consideration when choosing a private student loan. Ensure that you study and understand both the variable and fixed interest rates before settling on any private student loan.

The repayment period is very important when choosing a private student loan. Some lenders have fixed terms whereas others are customized to the suit the needs of the student. Remember, most lenders offer lower interest rates for shorter payment periods and higher interest rates for longer repayment periods and defaulters.

Most loans have limits and are regulated in terms of how much students can borrow. There are loans with high or low limits and students must settle for a lender that will provide the amount they need. Alternatively, a borrower can consider approaching different financial institutions and combining multiple loans to meet the full amount needed.

Some lenders have a straightforward application process, while others are a little bit complicated. When choosing the best private student loan, be on the lookout for what is needed in the application process. Ensure that you are well aware of all the requirements needed to complete the application.

It would be a waste of time and resources to apply for a student loan that you do not qualify for. Before choosing a loan, ensure that you still qualify throughout the process. Make sure to familiarise yourself with the criteria and requirements regarding eligibility for federal student loans to ensure that you qualify for the loan. 

A company’s reputation speaks volumes about how future relationships will be. Most reputable companies have been in business for a long time and have many years of experience. It is safer to choose a bank that has transparent policies and that has good reviews from previous borrowers.

We have reviewed the best lenders so that you can make an informed decision about your favourite.

Sallie Mae bank offers the Sallie Mae private student loans to undergraduates, graduates, and parents. Sallie Mae is one of the largest private student loan lending institutions in the U.S. The bank provides up to 100% of the loan amount requested by the borrower to cover all educational expenses.

Pros of Sallie Mae Loans:

• Can cover all education expenses
• No loan origination, application, or repayment fee
• May or may not need a cosigner

Cons of Sallie Mae Loans:

• Has a minimum credit score

Eligibility Requirements:

• Be enrolled at least halftime in a degree program
• International students need a cosigner who is a U.S citizen or resident
• Be a U.S citizen or a resident attending an eligible school

Repayment Terms:

• 10–15 year loan term
• Has three repayment programs (deferred, fixed, and interest only repayments)
• Cosigner is released after one year of consecutive timely payments

Ascent provides access to education for millions of students every year. Ascent gives more opportunities to qualify for a loan both for undergraduate and graduate programs. Named as the best private student loan in 2021 by “Forbes”, Ascent has changed how students pay for education at higher learning institutions through loans. They have empowered students from different backgrounds and various disciplines.

Pros of Ascent:

• Has the best repayment terms
• Easy application process
• Uses alternative factors to determine eligibility
• No minimum income requirement

Cons of Ascent:

• Has a minimum credit score

Eligibility Requirements:

• Be a junior or senior
• Be a U.S citizen or a permanent resident
• At least 18 years of age

Repayment Terms:

• 1% cash back reward upon showing proof of graduation
•  Five to 20 year repayment terms
• Start payment from up to 9 months after graduation

College Avenue is a private student loan that fits most borrowers’ goals and budgets. They are one of the best private student loan lenders with a low-interest rate. They have four different loan options and these include undergraduate student loans, graduate student loans, parent loans, and refinancing. Their user-friendly website helps borrowers calculate their payment terms based on the information they submit.

Pros of College Avenue:

• Covers 100% of school costs
• No loan origination fee for graduate and parent loans
• Easy to apply
• Flexible repayment options

Cons of College Avenue:

• Can have a long loan approval process

Eligibility Requirements:

• Meet set satisfactory academic progress
• Be enrolled in an accredited school in the U.S.
• Be at least 16 years of age

Repayment Terms:

• 0.25 interest rate reduction on recurring payment
• Borrowers can pay either while in school or after graduation
• Average loan repayment term is 5–20 years

Launched in 2019, SoFi Private Student Loans helps students pay for tuition and offers competitive rates. SoFi aims to help students and their guardians access financial literacy and support. They offer transparency in their loan application, disbursement, and repayment. The loan is available for both full- and part-time graduate or undergraduate students enrolled at an accredited school.

Pros of SoFi:

• No late or insufficient funds fee
• No loan origination or application fee
• Has many flexible repayment options

Cons of SoFi:

• The process may be slow and takes up to six weeks

Eligibility Requirements:

• Be a U.S. citizen, U.S. permanent resident, or a non-permanent resident alien
• Borrowers need to be employed
• Be a resident of the United States and the District of Columbia
• The age someone legally becomes an adult in your residence state

Repayment Terms:

• Six months grace period
• 0.25% interest reduction for automated payments
• Personalized monthly student loan payment

Earnest differs from other private student loan lenders as it also looks into other aspects other than credit scores. They consider salary, debt-to-income ratio, and employment history for each borrower. 

Earnest offers fair and customized rates to borrowers based on the information provided. Their rate calculator helps borrowers understand how much they can borrow, interest rates, and refinancing information.

Pros of Earnest:

• No late payment fees
• No loan application or origination fee
• Has a rate match feature 

Cons of Earnest:

• Requires a credit score of 650 and above

Eligibility Requirements:

• Resident of the U.S. (excluding Nevada and Kentucky states) and District of Columbia
• Age of majority in the state of residence.
• U.S. Citizen or Permanent Resident

Repayment Terms:

• Choose individual monthly payment amount
• 9 months grace period
• Loan term range from five to 15 years

Education Loan Finance, popularly known as ELFI is an affiliate of SouthEast Bank in Tennessee. ELFI was launched in 2015 and aims to assist students with private loans and refinancing. SouthEast bank provides different loan types that cover both undergraduate and graduate programs. Upon applying, borrowers are assigned a Student Loan Advisor who walks them through the whole process.

Pros of Education Loan Finance:

• No loan origination or application fee 
• Have refinancing options
• Available in all the U.S. states

Cons of Education Loan Finance:

• Requires a minimum credit score of 680

Eligibility Requirements:

• U.S. citizens or permanent resident aliens
• Be at the age of majority
• Enrolled for an undergraduate, graduate, or postgraduate program

Repayment Terms:

• Flexible repayment terms
• Loan repayment term of 5–15 years
• Different loan repayment options

Discover Bank offers private student loans that help to cover tuition, housing, books, and other costs of attendance. Discover Bank student loans offer refinancing options for students who want or may need more to complete their studies. The financier offers different student loan types and aggregate loan limits apply for each.

Pros of Discover Student Loans:

• Up to 100% coverage of school-certified college costs
• No fees (loan origination, application, and insufficient funds fees)
• Cash rewards for good grades
• 24/7 access to U.S.-based student loan specialists

Cons of Discover Student Loans:

• Must pass a credit check

Eligibility Requirements:

• Be pursuing a degree
• Be enrolled part-time or full-time in a degree program
• Meet satisfactory academic progress

Repayment Terms:

• Customized loan limits and rates
• Customized repayment options
• In-school or deferred payment options

Lend Key uses its digital platform to offer financial assistance to borrowers. They have been partnering with banks and credit unions since 2009 and they aim to offer different loan options to students. Students enrolled in degree programs from approved accredited schools are encouraged to apply for this private student loan.

Pros of Lend Key:

• Students can borrow up to 100% of the cost of attendance
• No loan origination or application fee
• Does not require a cosigner

Cons of Lend Key:

• Late payment and insufficient funds charges

Eligibility Requirements:

• U.S. citizen or permanent resident
• Have an established credit history
• Steady source of income

Repayment Terms:

• $25 monthly proactive payment
• Monthly full interest payment
• Loan term is 5–20 years

How do I find the best private student loans?

Scholaroo has a review on the best private student loans. Skim through the site and find all the details about the various private student loan lenders. Identify what you need in a lender and gauge that against your financial standing to find the best private student loan.

Which bank provides the best private student loan? 

The bank that provides the best private student loan is the one with the best rates and has flexible repayment options. Sallie Mae is a large bank that has revolutionized the  private student loans business.

What is the minimum credit score required for a private student loan?

To get a private student loan you will need a credit score of at least 650. Most lenders require a credit score that starts from the mid-600s. Other lenders’ financial requirements such as a steady income may need to be met.