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If you've already used your savings, federal student loans, and student aid to pay for college and still find that you're short on cash, a private student loan could be a good option.
SoFi is an excellent lender for borrowers who want competitive APRs and a safety net in the case of a job loss. It's also a great lender for those who don't want to worry about fees.
Details
Regular Annual Percentage Rate (APR)
Variable: 5.49% - 13.97%, Fixed: 4.44% - 14.70% with AutoPay
Origination Fee
0
Editor's Rating
4/5
4 out of
5 Stars
Pros & Cons
Pros
No origination fees, prepayment penalties, or late fees
Solid APR
Several options for repayment term length
Quick application process
Unemployment protection
Cons
Credit check required
$5,000 loan minimum
Highlights
More Information
Apply through your computer or mobile device
Customer service available via phone, mail, and social media
Five, seven, 10, or 15 year repayment terms available
Loan minimum of $5,000, maximum up to 100% cost of attendance
Unemployment Protection provides up to 12 months of loan forbearance for eligible borrowers who lose their job through no fault of their own
Loans are originated by SoFi Lending Corp. or an affiliate
Repayment options available:
Deferred: No payments until six months after leaving school
Interest only: Only make payments on the loan's interest while in school
Partial payments: Pay $25 per month while in school
Full repayment immediately: Start making full payments while still in school
Ascent's undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 8/1/2023 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.
Ascent provides a variety of repayment term lengths on its student loans and low minimum interest rates on fixed-rate loans. You may also qualify for a 1% cash-back reward that will be paid to you after graduation.
Ascent's undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 8/1/2023 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.
Show more
Origination Fee
$0
Editor's Rating
4/5
4 out of
5 Stars
Pros & Cons
Pros
N/A
Cons
N/A
Highlights
More Information
Loan amounts available: $2,001* minimum, up to $200,000 for undergraduates, and $400,000 for graduates
*The minimum amount is $2,001 except for the state of Massachusetts. Minimum loan amount for borrowers with a Massachusetts permanent address is $6,001.
Repayment options available:
Deferred: No payments for up to nine months after leaving school
Interest only: Only make payments on the loan's interest while in school
Partial payments: Pay $25 per month while in school
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.68% APR to 15.15% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.57% APR to 16.45% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan origination loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.
Earnest is a strong lender with competitive rates and a variety of term lengths. If you fall on financial hardship, you can skip a payment once per year — though that payment will extend the length of your loan term later.
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.68% APR to 15.15% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.57% APR to 16.45% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan origination loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.
Show more
Origination Fee
$0
Editor's Rating
4.25/5
4.25 out of
5 Stars
Pros & Cons
Pros
No origination fees, prepayment penalties, or late fees
Great APR
Many options for repayment term length
Quick application process
Skip a payment option
Low loan minimum
Cons
Credit check
May need a cosigner
Highlights
More Information
Five, seven, 10, 12, 15, and 20-year repayment term lengths available
Apply through your computer or mobile device
Customer service available via phone, live chat, email, and standard mail
Loan minimum of $1,000, maximum up to 100% cost of attendance
Skip a payment feature allows you to forgo making one payment every year
Loans are originated by Earnest Operations LLC
Repayment options available:
Deferred: No payments for up to nine months after leaving school
Interest only: Only make payments on the loan's interest while in school
Partial payments: Pay $25 per month while in school
Full repayment immediately: Start making full payments while still in school
This is an advertisement. You are not required to make any payment or take any other action in response to this offer.
College Ave is a great lender for borrowers who want multiple options for repayment term lengths and are after a low APR. College Ave also offers many options for contacting customer support.
Sallie Mae is a solid lender that includes four months of Chegg with its undergraduate loans. Sallie Mae charges late fees, though, and you can get better student loan interest rates elsewhere.
Details
Regular Annual Percentage Rate (APR)
Variable: 6.37% - 16.70%, Fixed: 4.50% - 15.49%
Origination Fee
$0
Fees
late payment of 5% of the amount due, capped at $25
Editor's Rating
3.25/5
3.25 out of
5 Stars
Pros & Cons
Pros
No prepayment or origination fees
Part-time students eligible
Four months of Chegg included with your loan
International students eligible with an eligible cosigner
Cons
Relatively high APR
Sallie Mae sets repayment term length
Credit check required
Customer service unavailable on Saturday and Sunday
Late payment fee
No loan preapproval
Highlights
More Information
Apply through your computer or mobile device
Customer service available via phone Monday through Thursday from 8 a.m. to 9 p.m. ET or on Friday from 8 a.m. to 8 p.m. ET
Five, 10, or 15 year repayment term, which will be assigned by Sallie Mae
Loan approval requires a hard credit pull
Loan amounts available: $1,000 minimum, up to 100% cost of attendance
Repayment options available:
Deferred: No payments for up to six months after leaving school
Interest only: Only make payments on the loan's interest while in school and during grace period
Fixed payments: Pay $25 per month while in school and during grace period
Discover is a solid student loan lender with a cash reward for borrowers who receive at least a 3.0 GPA. The lender has no fees — but you can find more competitive APRs elsewhere.
Details
Regular Annual Percentage Rate (APR)
Variable: 6.37% - 16.62%, Fixed: 4.49% - 14.99%
Origination Fee
$0
Editor's Rating
4/5
4 out of
5 Stars
Pros & Cons
Pros
No origination fee
No prepayment penalty
No late fee
Cash reward for 3.0 GPA
International students eligible with an eligible cosigner
Cons
Credit check required
One standard repayment term
High APR
Only one branch location
Highlights
More Information
Apply by phone or through your computer or mobile device
100% US-based customer service available 24/7
$1,000 loan minimum
15 years standard repayment term length
Loan amounts available: $1,000 minimum, up to 100% cost of attendance
Repayment options available:
Deferred: No payments for up to six months after leaving school
Interest only: Only make payments on the loan's interest while in school and during grace period
Fixed payments: Pay $25 per month while in school and during grace period
Custom Choice has competitively low rates compared to similar student loan lenders. The lender also will knock off 2% of your loan balance after you graduate.
Details
Regular Annual Percentage Rate (APR)
Variable: 5.13% - 14.89%, Fixed: 4.43% - 14.56%
Origination Fee
$0
Editor's Rating
4/5
4 out of
5 Stars
Pros & Cons
Pros
No origination fees, prepayment penalties, or late fees
Competitive APR
Get your rates within a few minutes
Low loan minimum
Graduation discount available
Cons
Credit check
May need a cosigner
Highlights
More Information
2% principal reduction upon graduation
7, 10, or 15-year repayment terms available
Customer service available by phone, email, or standard mail
Loan amounts available: $1,000 loan minimum, up to $180,000 lifetime loan limit
Repayment options available:
Deferred: No payments for up to six months after leaving school
Interest only: Only make payments on the loan's interest while in school and during six month grace period
Flat payments: Pay $25 per month while in school and during grace period
Immediate repayment: Start making full payments while still in school
You might like MPower Financing if you're an international student without a cosigner. Otherwise, you may prefer another lender for more repayment options and better rates.
Details
Regular Annual Percentage Rate (APR)
Fixed: 13.74% to 14.75% (with AutoPay discount)
Origination Fee
$0
Fees
5% origination fee and undisclosed late fee
Editor's Rating
2.5/5
2.5 out of
5 Stars
Pros & Cons
Pros
Lends to international students without a cosigner
Interest rate discounts for hitting certain requirements
No prepayment penalties
Cons
Only fixed-rate loans available
One repayment term available
High APR range
Origination and late fees
Only lends to students within 2 years of graduation from college
Highlights
More Information
10-year repayment term
5% origination fee and undisclosed late fee
Customer service available by filling out a form or phone
$2,001 loan minimum, up to $100,000 lifetime loan limit
1.5% reduction in your interest rate with automatic payments, six on-time payments, and proof of graduation and employment
Lends to students for 350 schools
Loan amounts available: $2,001 minimum, up to $100,000 lifetime limit
Repayment options available:
Interest only: Only make payments on the loan's interest while in school, then full payments after a 6-month grace period
Loans are made by Bank of Lake Mills or MPOWER Financing
Is it a good idea to take out a private student loan?
There's no one-size-fits-all answer to this question, as your decision depends on your unique financial situation. You may consider alternatives such as a less expensive school, scholarships, or a side job to earn more money. Whatever your decision is, make sure you understand the terms of your loan before making a choice.
Should I pay student loans while I'm still in school?
This depends on your financial situation. Interest will probably still accrue while you're in school, so it may be beneficial to make your interest payments each month or set aside a certain amount of money for monthly payments.
Paying either the principal of your student loans or the interest could be a good idea, because when your loan goes into repayment, any unpaid student loan interest will capitalize. This means it will become part of the principal balance of your loan. Interest is then determined using this new, higher loan balance.
Should I refinance my student loans?
Often, borrowers refinance to take advantage of lower interest rates or smaller monthly payments. You usually won't pay any fees to refinance your loans, but that depends on the specific lender. Be careful before you refinance federal student loans, as you will lose key federal protections as a result.
Do I need a cosigner to get a student loan?
For most younger students, it's unlikely you'll be approved without a cosigner. It is possible, but mainly for students who have an established credit history and an income.
Once you have some credit established, however, you may be able to remove your cosigner by refinancing. Some lenders also allow borrowers to remove cosigners after several years of consecutive payments.
What are my options for student loan repayment term length?
As you'll likely be repaying your student loans over a longer period, you'll want to know your options for your term length. You may want an extended length to spread your costs out, but be aware that you'll pay more in overall interest this way. Some lenders, like Sallie Mae, set your repayment term for you.
What repayment options are available on student loans while I'm enrolled in school?
Each lender is different when it comes to your repayment choices while you're in school. Some allow you to pay down your monthly debt in full every month, others offer interest-only or flat payments, and you may be able to defer all costs until after you graduate.
What's the difference between federal and private student loans?
Federal student loans have a number of protections that private student loans don't. The widespread forbearance and 0% interest rates during the coronavirus pandemic are some examples.
Similarly, income-based repayment plans are only available for federal student loans, and help to lower payments to a percentage of a person's income. That's a protection not available to private student loan borrowers that could make a big difference.
It's a good idea to use all of your available federal loan options first to take advantage of these protections.
Does interest accrue during the grace period on a student loan?
Yes, interest will accrue during the grace period, similar to how it does while you are in school. Some private lenders may have suspended this practice during the pandemic, but they are under no obligation to do so.
Is a variable-rate or fixed-rate student loan better?
Variable interest rates are exactly what they sound like — these loans have interest rates that change based on interest rate indexes, like the LIBOR or prime rate, plus a margin. When that index rate increases, the amount of interest you owe increases, along with your payment.
On variable-rate loans, interest rates and payments change over time. So, it's important to remember that what goes up must come down, and vice versa. There's a chance that interest rates will increase before a long loan (like a student loan) is paid off, and your interest rate and payment may not always be as low as it is now.
Can my private student loans be forgiven?
Unfortunately, private student loans would not be eligible for any sweeping federal forgiveness programs that could the government may potentially enact.
Which student loan is the best option?
Most of the time, federal loans are the best option. The best private student loan for you depends on your unique financial situation.
Can you live off private student loans?
Private student loans can usually fund all of your educational expenses — not just your tuition. You may be able to live off of private student loans.
Private Student Loan Companies
Sofi Student Loans
SoFi private student loans are best for graduate students. SoFi is one of the few lenders offering lower interest rates for graduate school loans than undergraduate loans.
While SoFi's interest rates are competitive with others on the list, what makes SoFi unique are its other features. This lender offers some good protections for student loan borrowers, like career services and unemployment protection. Additionally, SoFi's student loans have no fees, including no late fees (though it's worth noting that interest will still accrue).
Watch out for: High maximum loan amount. SoFi's minimum loan amount is $5,000 — if you need a small student loan, it might be worth turning to a lender that makes smaller loans.
Ascent private student loans are a flexible option for almost any student loan borrowers. Interest rates are competitive, and terms range from five to 15 years.
Cosigners are allowed and encouraged. A relatively unique feature is Ascent's cosigner release. Make 12 consecutive on-time payments, and Ascent can release a cosigner from your student loan.
What to watch out for: Ascent isn't a great option if you want to repay your student loans while you're still in school, as this lender doesn't offer a repayment plan with full payments while borrowers are still enrolled. But there's no prepayment penalty on loans if you want to make partial payments in school. It's also worth noting that Ascent limits borrowers' total loans to $400,000, including any other federal or private student loans outside of Ascent.
Earnest's private student loans offer low starting interest rates and very flexible repayment terms. Earnest has four options for repayment, including a nine-month deferral after school. Earnest doesn't charge any fees, including prepayment or origination fees on private student loans, which makes it a strong option.
Earnest also advertises the ability to skip a payment once per year. But that doesn't meant that you're off the hook for that payment, since interest will still add up and your payoff will be delayed. Your payments could be higher if you take full advantage of these features, and they could increase your total payoff time and loan amount.
But if used the right way, Earnest's private student loans could still beat the competition with such low starting interest rates.
What to watch out for: Some of Earnest's flexible features aren't the right fit for everyone. The ability to delay loans for nine months may not be as great as it sounds, since interest still accrues during this period, growing your loan's balance.
College Ave ties with Earnest for the lowest starting interest rates on private student loans, since undergraduate fixed-rate loans start with an interest rate of 4.42%. Interest rates for grad school students are also competitive with SoFi's lower interest rates for this group.
It's a good choice for both graduate and undergraduate students, and it offers four options for repayment. College Ave allows cosigners for loans and offers parent loans in addition to undergraduate and graduate loans, starting at the same interest rate as the undergraduate interest rate.
What to watch out for: Late payment penalty. You'll fork over a late payment of 5% of the amount due, capped at $25 if you fall behind on your payments.
Sallie Mae doesn't charge any origination and prepayment fees, and you also get four months of the study service Chegg for free. Chegg offers expert Q&A, and students can submit up to 20 questions per month.
What to watch out for: Sallie Mae sets your repayment term length, so if you want to choose your term length another lender is a better option.
Discover's undergraduate student loans don't have any prepayment penalties, origination fees, or late charges. However, you may be able to find lower fixed rates with other lenders on our list.
Discover also boasts a one-time 1% cash reward on its student loans for borrowers who get a GPA of 3.0 or higher for any academic term covered by the loan. You'll have to redeem your reward within six months after the loan's disbursement or six months after the academic term has ended, whichever is later.
What to watch out for: Limited term length options. Discover has only one standard term available, 15 years, which makes it a bad option if you want a different length.
Custom Choice offers loans of up to $99,999 annually that come without fees, and you can check your rates within a few minutes.
Custom Choice also offers a 2% reduction on your loan principal after you provide the lender with proof of graduation, as well as a .25% interest rate reduction when you sign up for AutoPay.
What to watch out for: No mobile app. If you want to manage your loans on the go, you won't be able to with Custom Choice.
MPower Financing offers fixed loans designed for international students. You can get a loan without a cosigner, collateral, or US credit history. Most other lenders that offer loans to international students require a US citizen or permanent resident to cosign on the loan.
What to watch out for: High interest rates. While the lender's starting interest rates are higher than many of the other lenders on this list, we included it because of its accessibility for international students.
Citizens Bank Undergraduate Student Loans. Citizens Bank offers good rates, but there are fewer repayment options through this lender, as Citizens doesn't give the option to pay during school.
Credible Student Loans. Credible doesn't directly make student loans — rather, this is a marketplace that makes loans through the lenders listed above and more. Credible works with Ascent, Citizens Bank, College Ave, and Sallie Mae, for example.
Which Private Student Loan Lender Is the Most Trustworthy?
We've only selected private student loan lenders with no public controversies in the last three years. We've also compared each institution's Better Business Bureau score.
The BBB, a non-profit organization focused on consumer protection and trust, evaluates companies by judging a business's responses to consumer complaints, honesty in advertising, and clarity about business practices. Here is each company's score:
Lender
BBB grade
SoFi Student Loans
A+
Ascent Student Loans
A-
Earnest Student Loans
A
College Ave Student Loans
A+
Sallie Mae Student Loans
A+
Discover Student Loans
A+
Custom Choice Student Loans
N/A
MPower Financing Student Loans
NR
Of our top picks, only Custom Choice and MPower are not currently rated an A- or higher by the BBB. Custom Choice isn't rated by the BBB at all, and the BBB doesn't have sufficient information to rate MPower Financing. That said, this doesn't necessarily reflect Custom Choice or MPower's trustworthiness, and you should ask others about their experiences with the businesses before deciding against borrowing from the companies.
Why You Should Trust Us: Our Experts for the Best Private Student Loans
We consulted loan and financial experts to give their insights into finding the best low-interest student loans for your needs.
Liz was a personal finance reporter at Insider. Before joining Insider, she wrote about financial and automotive topics as a freelancer for brands like LendingTree and Credit Karma. She earned her bachelor's degree in writing from The Savannah College of Art and Design. She lives and works in Cincinnati, Ohio. Find her on Twitter at @lizknueven.
Ryan Wangman was a reporter at Personal Finance Insider reporting on personal loans, student loans, student loan refinancing, debt consolidation, auto loans, RV loans, and boat loans. He is also a Certified Educator in Personal Finance (CEPF).In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership. He graduated from Northwestern University and has previously written for The Boston Globe. Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services here >>
Elias Shaya is a junior compliance associate on the Personal Finance Insider team based in New York City.Personal Finance Insider is Insider's personal finance section that incorporates affiliate and commerce partnerships into the news, insights, and advice about money that readers already know and love. The compliance team's mission is to provide readers with stories that are fact-checked and current, so they can make informed financial decisions.The team also works to minimize risk for partners by making sure language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team. Elias is the point person for the loans sub-vertical and works with the editorial team to ensure that all rates and information for personal and student loans are up to date and accurate.He joined Insider in February 2022 as a fellow on the compliance team.Elias has a Bachelor of Science in International Business from the CUNY College of Staten Island. Prior to joining Insider, he volunteered at the New York Presbyterian Hospital, where he worked with the biomedical engineering department. In his spare time, Elias enjoys exploring new restaurants, traveling to visit his family in Lebanon, and spending time with friends.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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