How to Find the Best Private Student Loans

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If you need to borrow to fund your college education, federal student loans and financial aid are the better option for most people. They usually offer lower interest rates and better repayment terms.

But you may still find yourself turning to private student loans to pay for your education if federal student loans won’t cover all your costs. Various lenders offer private student loans, which often have more stringent approval criteria (like the need for a cosigner, in most cases).

To help you find the best private student loans, Credible analyzed a number of different lenders according to their interest rates, fees, discounts, loan repayment options, and other factors.

Let’s run through the steps you can take to find the best private student loans.

Step 1: Comparison-shop for private student loan options

When shopping for a new educational loan, you’ll want to consider and compare a few factors:

• Interest rates: The interest rate on your student loan determines how much that loan will cost you in the end. Whether you’re deferring payments until you graduate or paying back the loan immediately, you’ll want to choose the lowest rate possible.

• Borrower requirements: Many private student loan borrowers will need a cosigner in order to qualify for the loan or secure better terms. Not having an eligible cosigner could limit your borrowing options.

• Fees: Some lenders charge additional fees on student loans, such as prepayment penalties and origination fees. Avoid as many of these as possible in order to save money.

• Loan terms: Each lender offers its own loan terms dictating the length of time you’ll have to repay the debt. The shorter your loan term, the higher your monthly payment (and vice versa).

• Repayment options: Private student loan lenders offer different repayment options, which may include immediate repayment, partially or fully deferred loans, interest-only, or even small monthly payments while you’re still in school.

• Discounts: You may be able to get a discount on your student loan for things like autopay enrollment.

• Cosigner release options: Though most student borrowers will need a cosigner in order to qualify for their loan(s), you may not want that cosigner to have an obligation to your r debt forever. Finding a lender that offers a cosigner release can be one way to relieve cosigners of their obligation after a few years of positive repayment history.

Credible makes it easy to compare private student loan rates.

Step 2: Choose the best private student loan lender for you

There are many different lenders and loan options to choose from, so it’s important to find the private student loan lender that fits your situation and financial needs. Here are a few Credible partner lenders to consider.

For no credit: Citizens Bank, MEFA

If you have no credit, or a low credit score, you’ll likely need a cosigner in order to qualify for a private student loan.

Citizens Bank offers parent loan options with a 36-month cosigner release policy, so your cosigner can be free of obligation after only three years. MEFA (Massachusetts Educational Financing Association) gives loans to borrowers in all 50 states with a minimum credit score requirement of 670. With MEFA, cosigners can be released after 48 months of consecutive on-time payments.

For high-balance loans: Ascent, Citizens Bank, EDvestinU

Whether you attend a high-cost university or change majors and need additional semesters of school, you may need to take out quite a bit in private student loans.

In this case, you’ll want to choose a lender with a high maximum loan amount, like Ascent, Citizens Bank, or EDvestinU. Citizens Bank allows for loans up to $350,000 while Ascent and EDvestinU allow for up to $200,000, if you need it. All three lenders are fee-free, offer an autopay discount, and allow for cosigner release after two or three years of on-time payments.

For good credit: EDvestinU

If you have strong credit, you may qualify for a private student loan of up to $200,000 with EDvestinU. You’ll need a 750 credit score in order to qualify on your own, along with a minimum income of $30,000. EDvestinU offers an autopay discount, but loan repayment options are limited, with only seven-, 10-, and 15-year terms.

For flexible loan terms: College Ave

If you want a variety of loan repayment options and terms, College Ave is worth a look. This lender offers loan terms of five, eight, 10, and 15 years. Besides offering deferred repayment until after you’ve finished school, College Ave offers repayment options while you’re in school, such as interest-only, $25 flat monthly payment, and full principal and interest. There are no application, disbursement, or origination fees, and the lender offers a 0.25% autopay discount.

Step 3: Consider these 9 lenders for the best private student loans

If you’re looking for a private student loan, here are seven Credible partner lenders to consider.

Ascent

With Ascent, you can borrow up to $200,000, release a cosigner after just 24 months, and receive a cash back graduation reward and autopay discount. But there are limited repayment options.

• Loan types offered: Undergraduate, graduate (general, MBA, law, dental, medical)

• Minimum credit score: 600

• Fees: No application, disbursement, or origination fees

• Eligibility: U.S. citizen or U.S. permanent resident for non-cosigned loans; students of any grade level and major at an eligible institution

• Repayment options: Interest-only or $25 monthly minimum payment while in school; deferred repayment

• Loan amounts: $1,000 to $200,000

• Loan terms: Five, seven, 10, 12, 15, or 20 years

• Discounts: 1% cash back reward at graduation; 0.25% to 2.% interest rate reduction for enrolling in autopay

• Cosigner release: Yes, after 24 on-time payments

Check out Credible to compare multiple private student loan lenders at once.

Citizens Bank

Citizens Bank has a high loan maximum, offers fixed- and variable-rate loans, and has both an autopay and loyalty discount. But it has limited forbearance options and doesn’t offer the ability to prequalify.

• Loan types offered: Undergraduate, graduate (general, MBA, law, medical, dental, bar study, medical residency)

• Minimum credit score: 720

• Fees: None

• Eligibility: Must be enrolled at least half-time at an eligible institution; U.S. citizen or permanent resident

• Repayment options: Deferred; interest-only; full repayment

• Loan amounts: $1,000 up to 100% of the cost of attendance

• Loan terms: Five, 10, and 15 years

• Discounts: 0.25% autopay, 0.25% loyalty

• Cosigner release: Yes, after 36 consecutive on-time payments

College Ave

College Ave offers four repayment options to cover up to 100% of your attendance costs, and it has both fixed and variable interest rates. While these are great features, the lender has a long cosigner release period, limited forbearance options, and doesn’t disclose its income and credit score requirements.

• Loan types offered: Undergraduate, graduate

• Minimum credit score: Not disclosed

• Fees: None

• Eligibility: Must attend an eligible institution; U.S. citizen or permanent resident

• Repayment options: Deferred payment; interest- only; flat payment; full principal and interest

• Loan amounts: $1,000 up to 100% of the cost of attendance

• Loan terms: Five, eight, 9, 10, and 15 years

• Discounts: 0.25% autopay discount

• Cosigner release: Yes, can be requested at the loan’s halfway repayment point

EDvestinU

EDvestinU has a lot going for it as a lender, with both fixed- and variable-rate options, loans of up to $200,000, and an autopay discount. Just keep in mind that loans aren’t available to primary borrowers in Washington state or California, cosigner release requires a borrower credit score of 750 or higher, and there are only three repayment options.

• Loan types offered: Undergraduate, graduate

• Minimum credit score: 750

• Fees: No application, disbursement, or origination fees

• Eligibility: Students enrolled at least half-time at eligible institutions; borrowers or cosigners must have an individual income of $30,000 or higher

• Repayment options: Deferred (until six months after leaving school, known as the grace period); interest-only while in school; full repayment while in school

• Loan amounts: $1,000 to $200,000

• Loan terms: Seven, 10, or 15 years

• Discounts: 0.50% autopay discount

• Cosigner release: Yes, after 36 months of consecutive on-time payments, with a FICO score greater than 750 and a minimum income of $30,000

INvestED

INvestEd offers perks like an on-time graduation reward of 2%, but student loans are only offered to Indiana residents and students. Additionally, cosigners are locked in for four years before they can be released.

• Loan types offered: Undergraduate, graduate

• Minimum credit score: 670

• Fees: No application, origination, or disbursement fees

• Eligibility: U.S. citizen or permanent resident; two continuous years of employment; 670 credit score; Indiana resident or student at an Indiana university

• Repayment options: Full deferment; interest-only; immediate repayment

• Loan amounts: $1,001 up to 100% of attendance costs

• Loan terms: Five, 10, or 15 years

• Discounts: 0.25% autopay discount, 2% on-time graduation reward

• Cosigner release: Yes, after 48 consecutive on-time payments

MEFA

The Massachusetts Educational Financing Authority (MEFA) isn’t just for Massachusetts residents and students. The lender offers private student loans with no fees and an average minimum credit score. But unlike other lenders, it only offers fixed-rate loans , and it doesn’t have discounts.

• Loan types offered: Undergraduate, graduate

• Minimum credit score: 670

• Fees: None

• Eligibility: U.S. citizen or permanent resident; enrolled at least half-time at an eligible college or university

• Repayment options: Immediate repayment; interest-only repayment; deferred; deferred with co-borrower release

• Loan amounts: $1,500 (or $2,000 for private schools) up to 100% of attendance costs

• Loan terms: 10 or 15 years

• Discounts: None

• Cosigner release: Yes, after 48 consecutive on-time payments

Sallie Mae

Sallie Mae offers fixed- and variable-rate loans to students who are enrolled less than half-time, and cosigner release can occur after as little as 12 months. Unfortunately, loan terms are limited and the lender doesn’t disclose its credit score requirements.

• Loan types offered: Undergraduate, graduate (general, MBA, law, medical, dental, health professions)

• Minimum credit score: Not disclosed

• Fees: None

• Eligibility: U.S. citizen or permanent resident; meet credit score and income requirements (not disclosed)

• Repayment options: Deferred; flat payment; interest-only; full principal and interest

• Loan amounts: $1,000 up to 100% of attendance costs

• Loan terms: Five to 15 years

• Discounts: 0.25% autopay

• Cosigner release: Yes, after 12 consecutive on-time payments

Other private student loan lenders to consider

Credible also evaluated the following private student loan companies. These loans are not offered through Credible, so you won’t be able to easily compare rates from these lenders with other lenders on the Credible platform.

Discover

If you have good credit, you may be able to find a competitive rate with Discover. The lender also rewards borrowers for good grades.

• Loan types offered: Undergraduate, graduate or professional programs

• Minimum credit score: Not disclosed

• Fees: No late fees

• Eligibility: U.S. citizen or permanent resident; meet credit score and income requirements (not disclosed)

• Repayment options: Immediate full payment, interest only, full deferral or minimum payments

• Loan amounts: $5,000 up to 100% of attendance costs

• Loan terms: 15 or 20 years

• Discounts: 0.25% autopay

• Cosigner release: After 24 months

PNC

Founded in 1852, PNC is a bank operating in 19 states. Private student loans are just one of the services the bank offers.

• Loan types offered: Undergraduate, graduate, health and medical professional programs, bar preparation programs

• Minimum credit score: Not disclosed

• Fees: No application or origination fees

• Eligibility: U.S. citizen or permanent resident; meet credit requirements (not disclosed)

• Repayment options: Immediate payment, interest only, or full deferral

• Loan amounts: $5,000 up to 100% of attendance costs

• Loan terms: 5, 10 or 15 years

• Discounts: 0.50% autopay

• Cosigner release: After 48 months

Methodology

In order to provide readers with this list of the best private student loans, Credible analyzed and compared them according to certain factors for borrowers. These factors include minimum fixed rate, minimum variable rate, term length, repayment, fees, customer experience, and cosigner release. Credible also looked at the availability of these lenders (where they operate) and what sort of loans they offer.

What to know about private student loans

Here are the answers to some of the most common questions about private student loans.

Can I defer private student loans?

If you hit a rough patch, you may be able to defer your private student loan payments. But options will vary from one lender to the next. You’ll typically need to contact your lender to request a deferment.

What are private student loan interest rates?

Since private student loans are issued by various banks, credit unions, and private lenders, the interest rates can vary. Interest rates may be fixed or variable, and may depend on things like your credit and the loan terms you choose . Interest rates may range from around 1% to 13% or higher.

Do I need a cosigner to get a private student loan?

Depending on your credit history, credit score, and income, you may need a cosigner to get a private student loan. Most students will need to add a cosigner to their loans — such as a parent, grandparent, or spouse — in order to qualify. Adding a cosigner may also help you qualify for lower interest rates or better loan terms.

Should I use a cosigner?

In some cases, you’ll need an eligible cosigner in order for you to qualify for a private student loan. But even if you don’t need a cosigner, it can be wise to add one. Doing so may unlock a lower APR or better loan terms. Before adding a cosigner, ensure that they’re OK with sharing responsibility for your educational debt, and that they understand any available cosigner release options.

How can I qualify for a private student loan?

In order to qualify for a private student loan, you’ll usually need to meet certain credit score and income requirements. If you don’t meet these, you’ll generally need to add a cosigner.

Student borrowers (or their cosigners) typically need to be U.S. citizens or permanent residents enrolled in an eligible institution.

How do I apply for a private student loan?

You’ll need to apply for a private student loan through each lender directly. Expect to provide personal information such as your household and/or personal income, Social Security number, and expected school attendance costs.

You can use Credible to easily compare private student loan lenders side by side.

Pros and cons of private student loans

There are both upsides and downsides to using private student loans for your educational expenses.

Pros

• You may be able to borrow more. In general, federal student loans have lower maximum loan limits than private student loans. If you’re attending an expensive university or need to take on graduate student debt, private lenders can offer loans as much as $350,000 (or sometimes more).

• There aren’t usually any fees. Unlike federal student loans, you generally won’t find application, origination, or disbursement fees on private student loans.

• Private loans offer multiple repayment options and terms. Certain private loan lenders offer a wide range of repayment plans, with loan terms ranging from five to 20 years. You may be able to pay interest only while in school, make small monthly payments, or fully defer payments until after you graduate.

Cons

• You lose out on federal benefits. Government-backed student loans may qualify for benefits such as income-driven repayment or federal student loan forgiveness. If you take out private student loans, you won’t be eligible for these programs.

• Interest rates can be higher. In many cases, the interest rates charged by private lenders are higher than those charged for federal student loans. Additionally, private student loans may be issued with variable interest rates, which have the potential to rise over time.

• Interest will accrue while you’re in school. Certain federal student loans may include an interest subsidy, which will cover the interest accrued while you’re in school, for the first six months after you graduate, and when you defer your payments. With private loans, no such subsidy exists; your interest will begin accruing on day one.

Stephanie Colestock is a Washington, D.C.-based writer who has more than 10 years of experience in writing about investing, business, and personal finances. She’s contributed to outlets such as Yahoo! Finance, MSN, Investopedia, Credit Karma, Credible, and more. She holds a bachelor’s degree from Baylor University and is in the process of earning her CFP® certification.

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