A private student loan is a common way to finance college expenses. Applying for a student loan ahead of time can help you avoid rushing your application at the last minute.
While the student loan process can seem overwhelming, you can start by ensuring that you have good credit and a co-signer (if you need one). Making sure you’re enrolled in an eligible school and keeping your college tuition numbers handy is helpful.
MoneyGeek analyzed top lenders based on loan amounts, service quality and APR ranges to help you select your best option. Our research revealed that College Ave is the best overall private student loan lender.
WHAT WE’RE GEEKING OUT ON:
- MoneyGeek’s Picks for the Best Private Student Loans
- Best Private Student Loan Overall: College Ave
- Best Private Student Loan for No Co-signer: Ascent
- Best Private Student Loan for Competitive APRs: RISLA
- Best Private Student Loan for Fast Approval Process: Citizens Bank
- Best Private Student Loan for Automated Payment Discounts: PNC Bank
- Best Private Student Loan for Member Benefits: SoFi
- Private Student Loans vs. Federal Student Loans
- How to Choose the Best Private Student Loan
- Frequently Asked Questions About Private Student Loans
MoneyGeek’s Picks for the Best Private Student Loans
Loan size, repayment terms, APR ranges and fees are some factors that MoneyGeek evaluated to rank the best private loans for students. College Ave emerged as our top pick since it charges minimal fees, doesn’t require co-signers and has flexible loan amounts.
MoneyGeek also highlights top-performing loan lenders based on their outstanding features. Citizens Bank, for example, offers fast approval.
Best Private Student Loan Overall: College Ave
College Ave
Students can take advantage of borrowing up to 100% of the cost of their education
- 3.89% - 17.99%Fixed APR Range
- 5.59% - 17.99%Variable APR Range
- $1,000 minimum, no maximumLoan Amount Range
- Not requiredCo-signer
College Ave ranked as our number one private student loan lender pick. College Ave charges virtually no fees, is available nationwide and offers customizable repayment options. You can finance your child’s education with College Ave if you're a parent or guardian.
Instead of capping loan size, College Ave allows borrowers to receive up to the total cost of a student’s tuition. The lender also offers a six-month grace period after graduation before repayment.
One downside to College Ave is that time to funding is relatively long — roughly 10 business days to release. Other lenders sometimes have a shorter disbursem*nt timeframe.
College Ave is an online lender launched in 2014 and offers student loans and refinancing.
Pros
- No origination fees
- No prepayment penalties
- Available in all 50 states and Washington, D.C.
- Automatic payment discount available
- Flexible repayment terms
Cons
- Funding can take up to 10 business days
- Charges late fees
- Students must achieve satisfactory academic progress
Best Private Student Loan for No Co-signer: Ascent
Ascent
A co-signer isn’t required unless you’re a non-U.S. citizen or temporary resident.
- 4.36%–14.08%Fixed APR Range
- 1.47%–11.31%Variable APR Range
- $2,001–$200,000Loan Amount Range
- Non-U.S. citizens and temporary residentsCo-signer
Ascent is MoneyGeek’s pick for borrowers who prefer taking out a private student loan without a co-signer. With Ascent, a co-signer isn’t a requirement unless you’re a non-U.S. citizen or a temporary resident.
Ascent has private student loans for undergraduate and graduate education, with a cap of $200,000 per full academic term. This lender might be a stellar option for students pursuing graduate or professional studies like medicine, dentistry or law.
While a top-performing lender, Ascent might not cater to students who urgently need a private student loan. Approval and fund release can take a few weeks.
Pros
- All credit-based loans are eligible for a 0.25% discount
- A 1% cashback reward available after graduation
- No application, origination or disbursem*nt fees
- No prepayment penalty fees
- Offers a grace period of 9 – 36 months
Cons
- No loan refinancing
- Loan approval and funding may take several weeks
- Has a 5% late fee (capped at $25)
Best Private Student Loan for Competitive APRs: RISLA
Risla
Ten-year loans have a starting APR of 4.99% plus a possible 0.25% autopayment discount.
- 2.99%–4.74%Fixed APR Range
- Not availableVariable APR Range
- $1,500–$150,000Loan Amount Range
- Not required if borrower meets qualificationsCo-signer
If you’re looking to save on interest rates when applying for a student loan, RISLA is an excellent pick. If you opt for a fixed rate you can get 4.99% – 6.94% APR, significantly lower than many competitors. A 0.25% autopayment discount can secure a more affordable overall payment.
However, the lender only offers immediate and deferred payment options, which might be limiting. Immediate payment means you begin repaying the loan 15 days after disbursem*nt. Deferred payment requires you to begin making payments six months after graduation.
RISLA, also called the Rhode Island Student Loan Authority, was established in 1981. It operated in Rhode Island before branching out across the U.S.
Pros
- No application or origination fees
- Autopayment discount of 0.25%
- Income-based repayment plan
- Loan forgiveness upon disability or student death
- Co-signer release after two years of consistent loan payments
Cons
- Charges a 6% late payment fee
- High income requirement
- Co-signer release program unavailable in certain states
Best Private Student Loan for Fast Approval Process: Citizens Bank
Citizens Bank
Loan approval is almost immediate in specific situations.
- 3.48%–10.78%Fixed APR Range
- 1.99%–8.39%Variable APR Range
- Up to $150,000Loan Amount Range
- Only for some borrowersCo-signer
MoneyGeek recommends Citizens Bank for students who need quick loan approval. The lender offers immediate loan application approval, but it can take three to five business days.
Whether you’re an undergraduate, graduate student or medical resident, you can take out a loan with Citizens Bank. The lender also offers student loan refinancing.
Parents and sponsors can take out a loan to assist in paying for their children’s education. Additionally, the lender is known to maintain strong relationships with college financial aid officers across the country, which can be a plus for borrowers.
Be sure to take note of Citizens Bank’s loan limit. If you need to borrow more than $150,000, you may find a suitable option elsewhere.
Citizens Bank is one of the oldest and largest financial institutions in the U.S. — its founding dates back to 1828.
Pros
- Available in all 50 states
- Calculator that shows detailed fee breakdown
- Multi-year approval
- Loyalty discounts
- Available to international students with a U.S. citizen or permanent resident co-signer
Cons
- No pre-qualification available
- Loan amount caps
- Fixed APR can reach 12.18%
Best Private Student Loan for Automated Payment Discounts: PNC Bank
PNC
PNC Bank offers a relatively sizable autopayment discount at 0.50%.
- 2.99%–9.89%Fixed APR Range
- 1.09%–8.19%Variable APR Range
- $1,000–$50,000Loan Amount Range
- AllowedCo-signer
Compared to other lenders in this guide, PNC Bank offers the highest interest rate discount at 0.50%. With PNC, undergraduate students, graduate and medical graduate students can take out a private student loan. Refinancing your loan is also possible.
PNC does not specify a minimum credit score requirement. However, creditworthiness is a determining factor for loan approval. Students with a co-signer may get a better rate, especially if the co-signer has a better-established credit history.
One downside of PNC Bank is that it doesn’t allow international students to take out a private student loan. Both the primary borrower and the co-signer (if any) must be U.S. citizens or permanent residents. If you’re an international student, you can explore other options.
Pros
- 0.50% autopay discount
- Allows co-signers
- No prepayment penalty, application or origination fees
- Six-month grace period
- A+ rating from BBB
Cons
- Charges late fees of $5 or 5% of amount due
- Does not disclose its credit score minimum
- Applicants must meet a satisfactory debt-to-income ratio
Best Private Student Loan for Member Benefits: SoFi
SoFi
SoFi provides members with the opportunity to earn and redeem rewards points by using the SoFi app.
- 3.22%–11.16%Fixed APR Range
- 1.10%–11.68%Variable APR Range
- $5,000 minimum, no maximumLoan Amount Range
- OptionalCo-signer
SoFi is MoneyGeek’s top pick for students who love maximizing member benefits. The lender provides unemployment protection assistance for borrowers with nine-month-old good standings. The lender may lower monthly payments if you become unemployed.
With SoFi, you can choose an undergraduate, graduate, law school or MBA loan. SoFi also offers student loan refinancing. Parents and sponsors can take out a loan to finance their student’s education. SoFi is a stellar choice for those who want to finance the total college attendance cost. SoFi also has its disadvantages — one of the largest being a four- to six-week waiting period before funds are released.
Since SoFi’s establishment in 2011, it has funded over $50 billion in loans. It was also the first lender to offer the refinancing of both federal and private student loans.
Pros
- No origination fees
- No fees for insufficient funds or late payments
- No prepayment penalties
- Potential cap is the total cost of education
- Offers several discounts and rewards
Cons
- Minimum loan amount of $5,000
- APR can be as high as 14.75%
- Funding may take four to six weeks
Private Student Loans vs. Federal Student Loans
If you’re looking for the best student loans, it’s smart to know the difference between private and federal student loans.
Banks, credit unions or state-affiliated organizations offer private student loans. The government provides federal student loans following terms set by law. Students who need to refinance a federal and private loan can consider private lenders such as SoFi.
Student loan eligibility varies based on the lender, regardless of loan type. For most loans, U.S. citizens and permanent residents can qualify. However, some private lenders allow international students to apply and others don’t. You may need to prove your financial need and provide proof of enrollment in an eligible certificate program from your school.
Federal student loans don’t charge prepayment penalty fees, while there’s a possibility of fees for early repayment with private student loans. Students with a federal student loan can defer payments until after graduation. Certain private student loans might require payments throughout your time in school.
MONEYGEEK EXPERT TIP
It’s smart to consider a private student loan only if your federal student loan isn’t sufficient to cover the cost of your education.
How to Choose the Best Private Student Loan
Before you apply for a student loan, it’s smart to consider a few factors that could affect which option is best for you.
- Assess the product details: Each lender offers different features, loan limits and APR ranges. Read about the features of a private student loan to help you decide whether it’s a suitable option.
- See if you meet eligibility requirements: Eligibility can vary greatly between lenders, so it’s best to check if you tick all the boxes. For instance, some lenders don’t allow international students to apply for a private student loan.
- Look into the repayment terms: Certain lenders have a short grace period and require immediate repayment. Other lenders allow you to defer payments until you graduate or leave school.
- Know your financial profile: Take note of factors such as having a co-signer, your creditworthiness and your debt-to-income ratio. Lenders usually check these to assess your ability to repay.
- Wait a couple of days: It’s good practice to take a day or two to consider the pros and cons before applying for a loan. It could help you arrive at an objective decision.
- Get a funding estimate: Knowing how much you need to borrow beforehand is best to avoid overborrowing.
- Account for monthly payments: Loans are usually paid each month, so ensure that you can keep up with payments.
- Read the fine print: Avoid surprise costs by understanding your loan’s conditions.
Taking time to evaluate options can help you find the best private student loan that caters to your specific needs.
HOW WE REVIEWED PRIVATE STUDENT LOAN LENDERS
We reviewed more than 30 private student loan lenders using 35+ individual data points across six key categories: loan affordability, accessibility, consumer friendliness, customer service, flexibility and lender transparency.
Within each ranking criteria category, we considered several individual data points that carry the most weight when choosing a private student loan lender. These factors include APR ranges, available loan amount, minimum credit score, minimum income amount, application fees and disbursem*nt time.
With the consumer in mind, we also factor in each lender’s customer support, business ratings and additional features that could make your experience easier and more accessible — like pre-qualification, payment options and mobile apps.
Frequently Asked Questions About Private Student Loans
MoneyGeek answered the most commonly asked questions about private student loans so you can find an excellent fit. Consider your needs and weigh different lender options.
When is it a good idea to take out a private student loan?
If possible, it’s best to apply for a private student loan at least four to six weeks before school starts or as soon as you know your tuition cost.
What are the common eligibility requirements for a private student loan?
Lenders tend to examine your creditworthiness and debt-to-income ratio. Co-signers might also be a requirement.
What kind of fees do private student loans have?
Some lenders charge prepayment penalty fees if you pay off your loan ahead of the set loan term. Some lenders also charge an origination fee. You should also expect to pay late fees if your balances transfer or you miss payments from month to month.
Can I get a private student loan with bad credit?
Some lenders don’t require a minimum credit score, so getting a private student loan with bad credit is possible. Having a co-signer with a better credit score can boost your likelihood of getting approved.
What are the interest rates on a private student loan?
Private student loan interest rates can range between 3.99% – 15.66%.
Are private student loans tax-deductible?
Yes, interest may be tax deductible.
Do I need a co-signer?
Not always. Some lenders require one, while others do not. International students or temporary residents, for instance, may need a co-signer.
Will a private student loan affect my credit score?
Yes. Lenders usually conduct a hard credit inquiry that can negatively impact your score. However, paying on time can help build your rating.
Experts' Insight on Finding the Best Private Student Loans
- What are the factors to consider when deciding which private student loan is the most suitable for them?
- What are the pros and cons of a private student loan?
- What advice would you give to someone considering a private student loan?
- What questions should a student borrower ask when choosing a private loan?
Brittany TweedDirector of Financial Aid at Metropolitan State University
Gilbert Rodgers, Ed.D., AFC®Director of Financial Wellbeing at the University of North Carolina at Chapel Hill
Jasmyn LindsayDirector of Financial Aid at Queens University of Charlotte
Shannon AmundsonDirector of Financial Aid at Davidson College
Gina PirtleDirector of Financial Aid & Scholarships, FAAC® at Indiana University Northwest
Roberta FergusonFinancial Aid Counselor and Vice President for Private Colleges at ILASFAA
Charlette SaudersDirector of Financial Aid at Grace Schools
Steven McDowellAssociate Vice President for Financial Aid Services & Title IV Compliance, FAAC at the Connecticut State Community College
Marty SomeroDirector, at the Office of Financial Aid at the University of Northern Colorado
Greg VojtanekOwner & Business Manager at Fade In Financial
Eric YoungSenior Instructor at the Department of Economics at Loyola Marymount University
Derek Munchow, CFP®, ChFC®Founder at Augustus Wealth
Jayson MatlockDeputy Chief Financial Aid Director, FAAC® at Southern Utah University
Chris Yost-Bremm, PhDAssociate Professor at San Francisco State University
Catherine Gilstein, PhDGraduate Program Director and Assistant Professor at Chestnut Hill College
Melissa Griswold, Ph.D.Associate Teaching Professor of Finance at Trulaske College of Business, University of Missouri-Columbia
Todd EngmannFinancial Advisor and Director at at Cary Street Partners
Bryan VanceFounder of Bucks & Cents
sources
- Better Business Bureau. "PNC Bank." Accessed November 21, 2022.
- Federal Student Aid. "Federal Versus Private Loans." Accessed November 21, 2022.
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