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Best Private Student Loans Of September 2024

Written By
Staff Writer
Edited By
Mortgages and Student Loans Deputy Editor

Expert Reviewed

|Student Loans, Federal Student Loan Debt Repayme...
& 2 others
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

After you’ve used subsidized and unsubsidized federal student loans, the best private student loans can help pay for remaining school costs. Private student loans come from banks, credit unions and online lenders, and unlike federal student loans for undergraduates, they require a credit check. Check out our list of top lenders and tips for comparing loan options.

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Why you can trust Forbes Advisor

Our editors are committed to bringing you unbiased ratings and information. Our editorial content is not influenced by advertisers. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the loans methodology for the ratings below.

  • 12 lenders researched
  • 15 data points evaluated
  • 6 categories scored

Best Private Student Loans Of September 2024

Best Private Student Loan for Flexible Payment Terms

Ascent

5.0

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Undergraduate Variable APR

6.01% to 15.72%*

Undergraduate Fixed APR

3.69% to 14.85%*

Go to Lender Site Arrow

Via Ascent’s Website

6.01% to 15.72%*

3.69% to 14.85%*

Editor’s Take

Ascent stands out for offering multiple payment terms and serving a diverse audience, including international students who apply with an eligible co-signer. Six loan term options are available, so you can design a loan payoff timeline that best fits your budget.

Why We Like It

We love that Ascent offers several repayment plans, including the progressive repayment option, which starts with a lower payment that gradually increases.

Undergraduate and graduate borrowers also get a nine-month grace period before payments begin, and dental and medical graduates get a 12-month grace period.

What We Don’t Like

Interest rates are high for borrowers who don’t apply with a co-signer.

Who It’s Best For

Ascent student loans are best for borrowers with co-signers looking for flexible repayment terms and longer payment grace periods than competing products.

Pros & Cons
  • Co-signer release available after 12 consecutive months of on-time payments
  • Borrowers may receive a 1% cash back reward upon graduation
  • Interest rate discounts are available for using autopay
  • Late payment fees
  • Higher interest rates without a co-signer

Details

Loan terms
Five, seven, 10, 12 or 15 years; see repayment examples for more details

Loan amounts
$2,001** up to total cost of attendance, to a maximum of $200,000 per academic year ($200,000 aggregate) for undergraduate loans and $400,000 for graduate loans

Eligibility
Student borrowers with no credit history can qualify with a creditworthy co-signer. Co-signers must show an income of at least $24,000 for the current and previous year. Co-signers must have a minimum credit score, which can vary.

Forbearance options
When experiencing financial hardship, borrowers can suspend payments for up to three months at a time, with a limit of 24 months throughout the loan term.

Co-signer release policy
Co-signer release is available after 12 consecutive principal and interest payments if the primary borrower meets certain credit requirements.

*Disclosure

**The minimum amount is $2,001, except for the state of Massachusetts. The minimum loan amount for borrowers with a Massachusetts permanent address is $6,001.

BEST PRIVATE STUDENT LOAN FOR CO-SIGNERS

Earnest

4.9

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

5.62% to 16.85%

(includes .25% auto pay discount)¹

Fixed APR

3.69% to 16.49%

(includes .25% auto pay discount)¹

Compare Rates Arrow

Via Earnest’s Website

5.62% to 16.85%

(includes .25% auto pay discount)¹

3.69% to 16.49%

(includes .25% auto pay discount)¹

Editor’s Take

Earnest offers some of the lowest interest rates on the loan market for students applying with a creditworthy co-signer. Plus, Earnest serves many types of borrowers, including international, DACA and graduate students.

Why We Like It

We like that interest rates for co-signed student loans start at just 3.69% APR, and Earnest promises to match your rate if you get a better rate with another lender.

Borrowers also get a nine-month grace period before loan payments are due compared to the typical six-month grace period offered by most other private and federal loans.

What We Don’t Like

Borrowers must have at least three years of credit history to qualify, which is a requirement young adults may not be able to meet fresh out of high school.

Who It’s Best For

Earnest is best for borrowers with good credit or access to a creditworthy co-signer because co-signed loans offer the lowest interest rates.

Pros & Cons
  • Rate match guarantee
  • Prequalification within two minutes without a hard credit inquiry
  • Interest rate discount for using autopay
  • Co-signer release not available
  • Loans require at least three years of credit history

Details

Loan terms
Five, seven, 10, 12 or 15 years

Loan amounts
$1,000 up to the total cost of attendance with a $250,000 lifetime limit

Eligibility
Borrowers must have a minimum credit score of 650, at least three years of credit history and a minimum income of $35,000 per year with no active accounts in collections or bankruptcy on their credit report.

Forbearance options
Earnest may offer up to 12 months of forbearance for borrowers facing temporary financial hardship.

Co-signer release policy
Co-signer release is not available.

Disclosures

¹You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

²Earnest clients may skip one payment every 12 months. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Please be aware that a skipped payment does count toward the forbearance limits. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.

³Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.

⁴Earnest’s Loan Cost Examples: These examples provide estimates based on principal and Interest payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 15-year term (180 monthly payments of $118.28) and a 11.69% APR would result in a total estimated payment amount of $21,290.40. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $126.82) and a 13.03% APR would result in a total estimated payment amount of $22,827.79.

These examples provide estimates based on interest only payments while in school. Variable APR: A $10,000 loan with a 15-year term (180 monthly payments of $145.41) and a 11.69% APR would result in a total estimated payment amount of $26,173.03. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $156.59) and a 13.03% APR would result in a total estimated payment amount of $28,186.67. Your actual repayment terms may vary. Other repayment options are available.

These examples provide estimates based on fixed $25 payments while in school. Variable APR: A $10,000 loan with a 15-year term (180 monthly payments of $169.92) and a 11.69% APR would result in a total estimated payment amount of $30,584.74. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $188.42) and a 13.03% APR would result in a total estimated payment amount of $33,915.55. Your actual repayment terms may vary. Other repayment options are available.

These examples provide estimates based on deferred payments. Variable APR: A $10,000 loan with a 15-year term (180 monthly payments of $174.79) and a 11.69% APR would result in a total estimated payment amount of $31,462.16. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $193.75) and a 13.03% APR would result in a total estimated payment amount of $34,874.28. Your actual repayment terms may vary. Other repayment options are available.

⁵Loan Eligibility criteria: Eligible students must: 1) For college Freshmen, Sophomores and Juniors, attend, or be enrolled to attend, a Title IV school full-time. For college Seniors and Graduate students, attend, or be enrolled to attend, a Title IV school at least half-time; and 2) be pursuing a Bachelor’s or Graduate degree. Earnest private student loans are subject to credit qualification, completion of a loan application, verification of application information, self-certification of loan amount, and school certification.

Responsible borrowing tip: Explore all scholarship, grant and federal options before applying for a private loan.

Earnest Private Student Loans are made by One American Bank, Member FDIC, or FinWise Bank, Member FDIC. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Finwise Bank, 756 East Winchester, Suite 100, Murray, UT 84107

Earnest loans are serviced by Earnest Operations LLC, 535 Mission St., Suite 1663 San Francisco, CA 94105, NMLS #1204917, with support From Navient Solutions, LLC (NMLS #212430). One American Bank, FinWise Bank, and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.

© 2024 Earnest LLC. All rights reserved.

Best Private Student Loan for Quick Applications

Education Loan Finance

4.8

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

6.00% to 14.22%

Fixed APR

3.69% to 14.22%

Compare Rates Arrow

Via Credible.com’s Website

6.00% to 14.22%

3.69% to 14.22%

Editor’s Take

With a speedy prequalification and application process, Education Loan Finance (ELFI) is our top pick for borrowers who want a fast application process. ELFI borrowers can also access student loan advisors who can answer questions about education financing.

Why We Like It

In addition to competitive rates, we like that ELFI offers loan forbearance of up to 12 months if borrowers face financial difficulty.

What We Don’t Like

When applying without a co-signer, you need at least three years of credit history for loan approval with ELFI, which could be a major barrier for recent high school graduates and young adults.

Who It’s Best For

ELFI loans are best for undergraduate, graduate and parent borrowers who value a quick application process and have a credit score of at least 680 or a creditworthy co-signer.

Pros & Cons
  • Quick applications and no origination fees
  • Transparent eligibility requirements
  • Up to 12 months of forbearance available for financial hardship or medical difficulty
  • Late payment fees
  • Co-signer release isn’t available

Details

Loan terms
Five to 15 years

Loan amounts
$1,000 up to 100% of the school-certified cost of attendance

Eligibility
Must be a U.S citizen or permanent resident enrolled in a bachelor’s, master’s or doctoral program at least half-time. Borrowers or their co-signers must have at least $35,000 in annual income, 36 months of credit history and a credit score of at least 680.

Forbearance options
ELFI may offer up to 12 months of forbearance when borrowers experience financial hardship or medical difficulty.

Co-signer release policy
ELFI doesn’t offer co-signer release, but you can apply for a new loan to remove your co-signer.

Best Private Student Loan for Member Benefits

SoFi®

4.8

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

5.74% to 15.86%*

with autopay and rate sale discount

Fixed APR

3.99% to 14.83%*

with autopay and rate sale discount

Learn More Arrow

Read Our Full Review

5.74% to 15.86%*

with autopay and rate sale discount

3.99% to 14.83%*

with autopay and rate sale discount

Editor’s Take

SoFi stands out from the pack by providing exclusive member benefits, such as family rate discounts, rewards opportunities and free financial advice from certified advisors.

Why We Like It

We love that SoFi charges no fees, including no late, insufficient funds, origination or prepayment penalty fees. Borrowers can also lock in savings by securing the 0.25% autopay discount. Plus, if the applicant or co-signer is a current SoFi customer, new student loans qualify for another 0.125% rate discount.

What We Don’t Like

SoFi offers co-signer release, but you must make 24 on-time loan payments before applying.

Who It’s Best For

SoFi student loans are best for borrowers who value customer experience and extra perks. On top of rate discounts, members get extra bells and whistles like expedited access to SoFi stadium, invitations to social events and referral bonuses.

Pros & Cons
  • Offers combinable autopay and member rate discounts
  • Loans can cover up to 100% of the cost of school attendance
  • Co-signer release is available after 24 consecutive months of on-time payments
  • Minimum credit requirements are not listed on the website
  • The website doesn’t outline specifics for forbearance options

Details

Loan terms
Five, seven, 10 and 15 years

Loan amounts
$1,000 up to the total cost of attendance

Eligibility
SoFi doesn’t disclose credit score or income requirements. However, SoFi borrowers typically have scores as low as 650.

Forbearance options
Borrowers can apply for hardship forbearance on SoFi’s website; however, the website doesn’t specify the number of months or years forbearance may be available.

Co-signer release policy
Co-signer release is available after 24 months of principal and interest payments, subject to credit approval.

Best Private Student Loan for Payment Assistance Options

Custom Choice

4.6

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

5.46% to 14.92%

Fixed APR

4.24% to 14.02%

Compare Rates Arrow

Via Credible.com’s Website

5.46% to 14.92%

4.24% to 14.02%

Editor’s Take

Custom Choice shines for letting borrowers lock in rate quotes for 30 days with only a soft credit check, which doesn’t impact your credit. Borrowers may also be eligible for multiple payment relief options during repayment.

Why We Like It

Custom Choice offers payment assistance for borrowers impacted by a national disaster or unemployment. Unemployment protection is available in two-month increments for a maximum of 12 months. In addition, Custom Choice provides rewards to borrowers upon graduation that can reduce their principal balance by 2%.

What We Don’t Like

Custom Choice only offers a co-signer release after you make 36 on-time loan payments; this is longer than most lenders.

Who It’s Best For

Custom Choice is best for borrowers who want payment assistance as a safeguard. Borrowers wanting to pay debt aggressively should also consider Custom Choice, as the graduation reward can help reduce the loan balance.

Pros & Cons
  • Interest rate discounts for using autopay
  • Payment relief for unemployment or natural disasters
  • No late payment fees
  • Does not disclose credit requirements online
  • Only offers co-signer release after 36 months of consecutive on-time payments

Details

Loan terms
Seven, 10 or 15 years

Loan amounts
$1,000 to $99,999 annually ($180,000 aggregate limit)

Eligibility
Borrowers must be U.S. citizens, permanent residents or eligible non-citizens (DACA recipients). Eligible non-citizens must apply with a creditworthy co-signer who is a U.S. citizen or permanent resident.

Forbearance options
Forbearance is available in increments of up to two months with a 12-month cap over the life of the loan.

Co-signer release policy
Co-signer release is available after 36 consecutive on-time principal and interest payments.

Best Private Student Loan for Multi-Year Loans

College Ave

4.5

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

5.59% to 17.99%

Fixed APR

3.69% to 17.99%

Compare Rates Arrow

Via Credible.com’s Website

5.59% to 17.99%

3.69% to 17.99%

Editor’s Take

College Ave shines for offering a multi-year loan feature that assures loan approval for several years of financing. According to College Ave, 90% of undergraduates approved with a co-signer are able to get approved for subsequent school years.

Why We Like It

College Ave has a large portfolio of products for students pursuing advanced degrees that require many years of schooling, such as law, business or medical degrees. After leaving school, College Ave loans may be eligible for payment grace periods of up to 36 months.

What We Don’t Like

College Ave charges late fees, and interest rates may be high if you don’t have strong credit.

Who It’s Best For

College Ave is best for borrowers shopping for education financing to cover many years of school. Law, MBA and medical school students who’ve exhausted federal loan options should also consider what College Ave offers.

Pros & Cons
  • Multiple loan options, including parent loans and loans for specialized professions
  • Interest rate discounts for using autopay
  • Prequalification without a hard credit check
  • Late payment fees
  • No co-signer release until halfway through the loan term

Details

Loan terms
Five, eight, 10 and 15 years, depending on the degree

Loan amounts
$1,000 up to 100% of the school-certified cost of attendance

Eligibility
There’s no minimum credit score for borrowers who use co-signers, but co-signers must have a minimum credit score in the mid-600s.

Forbearance options
Forbearance is available for up to 12 months in three- to six-month increments.

Co-signer release policy
Co-signer release is available at the midpoint of the loan term. For example, if you have a 10-year loan term, your co-signer may be eligible for release after five years.

*The most creditworthy applicants who choose the shortest repayment term available and who make full monthly payments while in school qualify for the lowest rates.

Disclosures

1 – College Ave Student Loans products are made available through either Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. Program restrictions and other terms and conditions may apply.

2 – All rates shown include the autopay discount. The 0.25% autopay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

3 – Covers up to 100% of your cost of attendance as certified by your school and less any other financial aid you might receive. Minimum $1,000.

Best Private Student Loan for Lowest Maximum APR

Rhode Island Student Loan Authority

4.3

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

N/A

Fixed APR

3.85% to 8.54%

Learn More Arrow

Read Our Full Review

N/A

3.85% to 8.54%

Editor’s Take

Rhode Island Student Loan Authority (RISLA) provides less flexible loans than other lenders, with only 10- and 15-year terms available. However, rate caps are low, making it an option worth considering if those two terms fit your goals.

Why We Like It

Along with low rates, RISLA offers rewards of up to $2,000 in loan forgiveness for interns, and nurses may be eligible for four years of no interest. When facing hardship, RISLA borrowers may qualify for income-based repayment plans or up to 24 months of forbearance.

What We Don’t Like

RISLA loans don’t offer much in terms of customizability since there are only two loan term options. Further, the maximum you can borrow is $50,000 per year, which may not be enough for those pursuing advanced degrees.

Who It’s Best For

RISLA is best for borrowers looking for a traditional 10-year term loan and have sufficient personal income or a creditworthy co-signer to land low APRs.

Pros & Cons
  • Low interest rates compared to competitors
  • Co-signer release available after 24 consecutive months of on-time payments
  • Interest rate discounts for using autopay
  • Requires a minimum income of $40,000 per year
  • Students are limited to borrowing $1,500 to $50,000 per year, with a $180,000 aggregate limit per borrower

Details

Loan terms
10 and 15 years

Loan amounts available
$1,500 to $50,000 per year, with a $180,000 aggregate limit per borrower

Eligibility
Applicants or co-signers must show a minimum income of $40,000 per year and a minimum credit score of 680.

Forbearance options
Forbearance is available for up to 24 months.

Co-signer release policy
Co-signer release is available after 24 consecutive months of on-time payments. Periods during which borrowers use income-based repayment do not qualify.

Best Private Student Loan for Repayment Options

Sallie Mae

4.0

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

5.37% to 15.70%

Fixed APR

3.69% to 15.49%

Compare Rates Arrow

Via Credible.com’s Website

5.37% to 15.70%

3.69% to 15.49%

Editor’s Take

Sallie Mae is a veteran in the student lending space, providing loans to finance undergraduate and graduate degrees plus certificate programs in professional studies, such as culinary arts and aviation.

Why We Like It

Borrowers can choose from low-payment options, including deferment while in school or interest-only payments for 12 months once the post-graduation grace period ends. Borrowers who fall behind on payments may also be eligible for loan modifications, payment extensions or reduced payments to get back on track.

What We Don’t Like

Sallie Mae currently offers no way to check interest rates without a hard inquiry, which temporarily dings your credit score.

Who It’s Best For

Sallie Mae student loans are best for borrowers who could benefit from low payments while job hunting and career climbing after graduation.

Pros & Cons
  • Loans are available for students enrolled less than half-time
  • Co-signer release after just 12 months of on-time payments
  • Interest rate discounts for using autopay
  • Borrowers can’t prequalify without a hard credit check
  • Late payment fees

Details

Loan terms
10 to 20 years

Loan amounts
$1,000 up to 100% of the school-certified cost of attendance

Eligibility
Sallie Mae offers private student loans to eligible U.S. citizens and permanent residents. Further, international and DACA students residing in and attending U.S. schools may qualify with a creditworthy cosigner who is also a U.S. citizen or permanent resident.

Forbearance options
Sallie Mae can postpone payments during financial hardship and military service.

Co-signer release policy
Co-signers may be eligible for release after the borrower makes 12 on-time principal and interest payments.

Best Private Student Loan for No Co-signer Loans

Nelnet

3.9

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

6.32% to 10.42%

Fixed APR

3.74% to 9.59%

Compare Rates Arrow

Via Credible.com’s Website

6.32% to 10.42%

3.74% to 9.59%

Editor’s Take

Nelnet Bank is backed by the loan servicer Nelnet and offers private student loans and parent loans for borrowers who meet credit requirements.

Why We Like It

Sometimes, loan eligibility conditions can be vague, and we like that Nelnet clearly defines its credit requirements if you don’t have a co-signer. You need a minimum credit score in the mid-to-high 600s to be eligible without a co-signer.

What We Don’t Like

Netlnet Bank’s website mentions payment assistance may be available but doesn’t explain the options. Borrowers struggling with payments must contact the lender to discuss arrangements.

Who It’s Best For

Nelnet Bank is best for borrowers applying without a co-signer who can show proof of stable income and decent credit. However, you might need to look elsewhere if you want a range of repayment options like income-based repayment.

Pros & Cons
  • Prequalification available to check rates without a hard inquiry
  • Interest rate discounts available for using autopay
  • $500,000 loan cap for graduate health professional degrees
  • Late payment and returned payment fees
  • Loan amount limits

Details

Loan terms
Five to 30 years, depending on your loan amount and repayment plan

Loan amounts
$1,000 up to $125,000 for undergraduate loans; $175,000 for graduate, MBA or law degree loans; and $500,000 for graduate health degree loans

Eligibility
Borrowers and co-signers must be U.S. citizens or permanent residents with a valid U.S. Social Security number. The minimum credit score is in the mid- to high-600s.

Forbearance options
Assistance programs may be available to borrowers struggling to make payments.

Co-signer release policy
Co-signer release is available after 24 months of consecutive on-time payments.

Best Private Student Loan for Rate Discounts

Citizens Bank

3.8

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

5.99% to 16.59%

Fixed APR

3.99% to 15.59%

Compare Rates Arrow

Via Credible.com’s Website

5.99% to 16.59%

3.99% to 15.59%

Editor’s Take

Citizens Bank is our top pick for rate discounts since student loans come with combinable discount opportunities that can drive down your monthly payments and long-term costs.

Why We Like It

Citizens Bank offers a discount of 0.25% for using autopay, which is pretty common across student loan lenders. However, you can get another 0.25% discount (for a total of 0.50%) if you or your co-signer has an eligible Citizens Bank account open at the time of application.

What We Don’t Like

Citizens Bank offers no prequalification without a hard inquiry, so checking rates may impact your credit.

Who It’s Best For

Citizens Bank student loans are best for existing customers or applicants willing to open a bank account before applying to receive the maximum rate discount.

Pros & Cons
  • Up to 0.50% available in autopay and bank loyalty rate discounts
  • Multi-year approval lets you apply once and draw money for school each year
  • Borrowers may refinance loans without completing a degree program
  • Loan amount limits
  • High interest rate caps
  • Late payment fees

Details

Loan terms
Five, 10 and 15 years

Loan amounts
$1,000 to $350,000 (depending on degree)

Eligibility
Parent applicants and students must be U.S. citizens, permanent residents or eligible non-citizens with creditworthy co-signers. Students must attend school at least half-time.

Forbearance options
Forbearance of up to 12 months throughout the life of the loan may be available in two-month increments.

Co-signer release policy
Co-signers can be released from the loan after 36 consecutive on-time payments.

Summary: Best Student Loans Of 2024

Tips for Comparing Private Student Loans

Do your due diligence as you prepare to borrow a private student loan. Experts recommend borrowing no more than what you’ll most likely earn in your first year out of college. This can protect you from having unmanageable monthly payments after you leave school.

When you review each lender and loan, consider the following factors:

  • Loan amount. Loan amounts can vary depending on the lender and degree you’re pursuing. Some lenders offer to finance up to 100% of school costs, but using college savings, grants and scholarships can help reduce how much you need to borrow.
  • Loan cost. The primary factor that impacts student loan costs is a loan’s annual percentage rate (APR), which varies depending on your credit. Most private student loans don’t have application or origination fees, but it’s worth checking for extra fees to understand the loan’s total cost.
  • Repayment term. Loan terms typically range from five to 20 years. Shorter loan terms have higher payments but get you out of debt faster. A longer repayment term might have more manageable payments but will cost more in interest over time.
  • Borrower benefits. Lenders might offer different perks to borrowers, such as interest rate discounts for using autopay. In some cases, lenders may also offer deferred payments until after you leave school and pause payments if you face financial hardship.
  • Co-signer release. Applying with a co-signer who has good credit is one of the best ways to qualify for a low-rate private student loan. Some lenders also have a co-signer release policy, which removes your co-signer from the loan after you make a certain number of on-time payments.
Pro Tip

Compare offers from multiple private student loan lenders to find the most competitive interest rates, fees and repayment options. Different lenders may have varying loan terms and borrower benefits.

The Complete Guide to Private Student Loans

Current Average Student Loan Rates

Student Loan Rate Yearly Trends

Private lenders typically determine student loan interest rates using a benchmark like the Secured Overnight Refinancing Rate (SOFR). The SOFR tends to align with the federal funds rate, which the Federal Reserve has increased 11 times since March 2022 in an attempt to cool inflation. As a result, interest rates on private student loans and other lending products increased. 

The Fed has kept rates fairly steady in 2024 but has signaled that they may start to come down later this year. 

How Do Student Loans Work?

Student loans can be used to pay for many school-related expenses, including tuition, room and board, books and school supplies, transportation and other common expenses. Once your loan application is approved, the funds are disbursed to the school to cover your balance. Often you can defer repayment until after leaving school, but interest may start accruing right away.

Federal vs. Private Student Loans

There are two broad categories of student loans: federal or private. Federal loans are offered by the U.S. Department of Education and, for most students, are the more attractive option. That’s because federal student loans offer things that most private lenders don’t, including:

  • A fixed interest rate that isn’t based on your creditworthiness; all borrowers are offered the same standard rates
  • More flexible repayment plans, including options that allow you to base your monthly payments on your income
  • More lenient deferment and forbearance options
  • Several loan forgiveness and loan discharge programs that you might qualify for

For these reasons, most borrowers turn to federal student loans first. However, private student loans can still be worthwhile in some circumstances. If you have excellent credit, for example, private student loans may offer better interest rates than the standardized federal rates. Private student loans can also be useful if you have gaps in your college funding and need extra cash.

The exact terms of private student loans vary by lender, but you can expect to find the following in many private loans:

  • The ability to choose between fixed and variable interest rates
  • A simpler application process
  • Low or no origination fees
  • The ability to add a co-signer if your credit isn’t sufficient

Ask An Editor

What must borrowers consider when choosing between federal and private student loans?

Renée Earwood

Renée Earwood

Student Loans, Federal Student Loan Debt Repayment Options Expert

Ryan Galliotto

Ryan Galliotto

Student Loans Expert

 

When choosing between federal and private student loans, borrowers should consider their financial situation and goals after graduation. Creating a mock budget that includes anticipated starting salary, monthly living expenses, future financial goals and student loan repayment terms can help the borrower decide which lloan is best for them.

For example, borrowers who plan on entering professions or working for employers who qualify for a federal student loan forgiveness program may want to run a repayment analysis of the corresponding forgiveness program they may be eligible for and compare that to the terms of a private loan with regard to monthly repayment amount and total cost.

If a borrower isn’t sure whether they can afford their student loan payment after graduation, federal student loans tend to offer more flexible repayment plans based on income along with deferment and forbearance options. If a borrower doesn’t anticipate utilizing any of the federal student loan options and benefits and can find a lower interest rate with a private lender, then choosing a private student loan could be the best option for saving on the total cost of repayment.

Renée Earwood

Renée Earwood

Student Loans, Federal Student Loan Debt Repayment Options Expert

 

Federal loans typically come with more “bells and whistles” than private loans, making them the more attractive option. These bells and whistles include better repayment options, forgiveness opportunities and easier approval odds, as a credit check isn’t necessary for most federal loans (aside from PLUS loans).

If a borrower is worried that they may not be able to keep up with their payments after graduation, federal loans make sense since they’ll have access to better repayment options than private loans offer. Also, if they think they’ll work in the nonprofit space for at least 10 years, they can potentially have their federal loans forgiven via the Public Service Loan Forgiveness (PSLF) program.

It should also be noted that any borrower, regardless of where they work, who has federal loans being paid back on income-driven repayment plans can have their remaining balances forgiven after 20-25 years, depending on which plan they are on.

For these reasons, I typically recommend that borrowers max out their federal loan amounts first, then, if needed, take out private loans. You can always refinance your federal loans down the road (making them private loans), but you can’t transfer private loans to the federal system.

Ryan Galliotto

Ryan Galliotto

Student Loans Expert

Pros and Cons of Private Student Loans

Borrowing a private student loan has its advantages, but there are also downsides to consider. Consider these pros and cons before you apply. 

Pros

  • Offers funding for tuition, fees and other expenses. A private student loan can help fill the gap after you’ve maxed out your eligibility for other financial aid. You can use private student loans to pay for tuition, fees, supplies, groceries, rent or other costs.
  • May be able to borrow up to your school’s cost of attendance. Many private lenders let you take out as much as you need to cover your cost of attendance. By contrast, some federal student loans come with lower borrowing limits. 
  • Low interest rates may be available for excellent credit. Creditworthy applicants may access interest rates starting around 4.5%. You can usually choose between a fixed and variable rate on a private student loan
  • Provides funding for international students. International students aren’t eligible for federal student loans or financial aid but can qualify for a private student loan. 

Cons

  • May require a co-signer. You’ll need to meet a lender’s requirements for credit and income to qualify for a private student loan. Most undergraduates have to apply with a co-signer, such as a parent, to get approved for a loan. 
  • Interest rates could be high. Interest rates can go up to 17% or higher, resulting in high borrowing costs. 
  • Not as many protections as federal student loans. Federal student loans are eligible for various benefits, including income-driven repayment (IDR), deferment and forbearance. Private student loans may or may not come with these protections—terms will vary by individual lender. 
  • Don’t qualify for federal loan forgiveness. Private student loans aren’t eligible for federal forgiveness programs, such as Public Service Loan Forgiveness, Teacher Loan Forgiveness or the loan forgiveness you can receive at the end of an IDR plan. 

How To Get the Best Private Student Loan Rates

Interest rates for private student loans fluctuate much more than their federal counterparts and are based on your credit profile, income and other factors. Here’s how you can qualify for the best rates, which may be lower than what you see on federal loans if you have strong credit.

1. Clean Up Your Credit

2. Consider a Co-signer

3. Compare Lenders

4. Choose Between Fixed and Variable Rates

5. Select the Right Repayment Terms

Compare Personalized Student Loan Rates

Takes Up To 3 Minutes

How To Get a Private Student Loan

After maxing out your eligibility for federal financial aid, you might still have a gap in funding. That’s where a private student loan can come in handy. Here are the steps you’ll need to take to get a private student loan.

  • Check your credit. You typically need good credit to qualify for a private student loan. Check your credit score and review your credit report so you know what you’re working with as you start the application process.
  • Consider a co-signer. If you don’t have good credit or a source of income, you may need to apply with a co-signer. Speak with your co-signer about repayment expectations to ensure you’re both on the same page about sharing responsibility for the loan.
  • Compare lenders. Take some time to compare multiple lenders, including banks, credit unions and online lenders. Some lenders let you check your rates through prequalification, which won’t impact your credit.
  • Choose an offer and apply. As you compare loan offers, look for a loan with a low interest rate, low (or no) fees and flexible repayment terms. Once you’ve found an offer you want to move forward with, submit a full application. You can usually apply online and may need to provide documentation with your personal information, such as W-2s, tax returns, ID and proof of address.
  • Sign your loan agreement. Your last step is to sign your loan agreement and finalize the loan. Read over the details of the contract carefully so you understand the rates and terms of your loan, as well as when your first payment is due.
Pro Tip
If you have poor credit or no credit, applying for a loan with a co-signer can help you get approved. The ideal co-signer has stable income and good credit, which is a FICO Score of 670 or higher.

How To Apply for a Private Student Loan

Consider private loans if you’ve reached the annual or aggregate limits for federal student loans and need to borrow additional funds. The private student loan application process can take several weeks or even months, so most lenders recommend applying at least two months before your tuition due date.

To apply for a private student loan, follow these steps:

  1. Review your credit. Private student loan lenders typically perform credit checks, and you’ll need good to excellent credit to qualify for a loan (or have a creditworthy co-signer). Before applying for a loan, review your credit reports at AnnualCreditReport.com, where you can access your credit report for free, to ensure all the information on those reports is correct.
  2. Find a co-signer. For the 2022-2023 academic year, 90% of undergraduate loans issued were co-signed. A co-signer can be a parent, relative or even a friend with a good credit score and a steady source of income.
  3. Gather supporting documents. Save time on your loan application by gathering the necessary documents ahead of time. Generally, lenders will ask for your address, Social Security number, income, employment information and details about your co-signer.
  4. Request quotes. Eligibility requirements, repayment terms and interest rates vary by lender, so it’s wise to shop around and request quotes from several private student loan companies. Many lenders allow you to get a quote with a soft credit check that doesn’t impact your credit score.
  5. Submit your application. Once you find a loan that works for you, submit an application. If you apply with a co-signer, they will have to apply separately. After you submit your information, the lender will review your application and perform a hard credit inquiry. When they make a decision, they will notify you and send you a loan agreement to review and sign.

Recap : Best Private Student Loans Of September 2024

  • Ascent – Best Private Student Loan for Flexible Payment Terms
  • Earnest – Best Private Student Loan for Co-Signers
  • Education Loan Finance – Best Private Student Loan for Quick Applications
  • SoFi – Best Private Student Loan for Member Benefits
  • Custom Choice – Best Private Student Loan for Payment Assistance Options
  • College Ave – Best Private Student Loan for Multi-Year Loans
  • Rhode Island Student Loan Authority – Best Private Student Loan for Lowest Maximum APR
  • Sallie Mae – Best Private Student Loan for Repayment Options
  • Nelnet Bank – Best Private Student Loan for No Co-signer Loans
  • Citizens Bank – Best Private Student Loan for Rate Discounts

Methodology

We scored 16 national lenders that make the most loans by volume across 15 data points in the categories of interest rates, fees, loan terms, hardship options, application process and eligibility. We chose the best lenders based on the weighting assigned to each category:

  • Hardship options. 20%
  • Interest rates. 20%
  • Fees. 15%
  • Application process. 15%
  • Loan terms. 10%
  • Eligibility. 10%
  • Customer service. 10%

Specific characteristics taken into consideration within each category included number of months of forbearance available, economic hardship repayment options available beyond traditional forbearance, perks like cash-back rewards upon graduation, discounts, time to default, disclosure of credit score and income requirements and other factors.

To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Student Loans Rating & Review Methodology.

Private Student Loan FAQs

How do I know if my student loan is federal or private?

If you aren’t sure which kind of loan you have, there are a few ways to find out:

  • View your account dashboard. Visit StudentAid.gov and sign into your Federal Student Aid account. The account dashboard will show you what federal loans, if any, you may have.
  • Contact the Federal Student Aid Information Center. If you don’t have your login information or never created an account, you can contact the Federal Student Aid Information Center at 800-433-3243.
  • View your credit report. Check your credit report for free at AnnualCreditReport.com. Your credit report will list all outstanding loans under your name and your loan servicers. Once you have that information, you can contact the loan servicer for details about the loans.

Federal loan programs include the William D. Ford Federal Direct Loan Program, the Federal Perkins Loan Program and the Federal Family Education Loan (FFEL) Program.

Can I get a student loan without a co-signer?

It’s possible to get a student loan without a co-signer, but the difficulty of doing so depends on your situation.

Nearly every type of federal student loan does not require (or allow) co-signers. Because you don’t need a high credit score to qualify for these types of loans, most students are eligible without a co-signer if they can meet a few basic requirements.

Private student loans, however, may be harder to get on your own. These types of loans require a high credit score of at least 670 to qualify for the lowest rates. If you can’t qualify individually, you may need to add a co-signer to your application. However, some lenders offer a co-signer release after you meet certain requirements, so look for that feature as you compare your options.

Some private lenders specialize in student loans without a co-signer; instead of reviewing your credit, they may consider things like your performance in school and field of study instead. While it may be easier to qualify for these loans, they typically come with higher interest rates.

How do you get a private student loan with bad credit?

It’s possible to get private student loans with bad credit, but you’ll pay more for the privilege.

Some lenders offer student loans specifically for borrowers with bad credit or no credit. These loans have more relaxed eligibility requirements, and some don’t require a credit check at all. Instead, lenders may review alternative factors such as your field of study, grade point average or estimated future earnings to determine your eligibility. However, these loans come with significantly higher interest rates than traditional private student loans.

If you have bad credit, consider federal student loans first. Most of these loan types don’t check your credit, and the interest rates are standardized. That means everyone who qualifies for a federal loan receives the same interest rate, regardless of their financial history.

If you don’t qualify for federal student loans or have maxed out the federal aid available to you, consider taking steps to improve your credit before applying for a private student loan. If that’s not an option, you might add a co-signer to your loan application, which can help you qualify for better interest rates.

How much money can I borrow through private student loans?

The maximum amount you can borrow varies by lender. Some lenders allow you to borrow up to 100% of the school-certified cost of attendance—which considers tuition, fees, textbooks and room and board—while others have caps of $50,000 per year.

How long does it take to get a private student loan?

The amount of time it takes to get a private student loan will vary by lender, but expect it to take one to three weeks to receive your funds. Along with processing your application, the private lender will likely reach out to your school to confirm your cost of attendance. The lender may send your loan funds directly to your financial aid office, which will apply them to tuition and fees before sending the remaining funds over to you.

Do private student loans allow deferment or forbearance?

Some private student loans allow you to defer your loan payments while you are attending school, but interest still accrues on these loans. Some lenders may offer deferment for a financial hardship or during military deployment. Forbearance also lets you suspend payments for a certain period of time.

Regardless of whether payments are suspended payments through deferment or forbearance, the unpaid interest gets added to your principal, causing your monthly payments to increase once repayment begins again.

How are interest rates determined for private student loans?

Private student loans usually offer variable and fixed interest rates that are based on the borrower’s creditworthiness. If you have good or excellent credit, then you’ll be eligible for a lower interest rate. But if you have poor or fair credit, prepare for an interest rate on the higher end of the range.

Variable rates rise and fall according to the index they follow. For example, the lender may use the prime rate as its benchmark.

Next Up In Student Loans

Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.

Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.
Taylor Medine
Staff Writer

Taylor Medine is a staff writer at Forbes Advisor who demystifies complex money topics to help everyday people make more informed financial decisions. Over her nearly a decade of experience, Taylor's work has been published on Bankrate, Experian, Credit Karma, MarketWatch, The Balance and more.

Caroline Basile
Mortgages and Student Loans Deputy Editor

Caroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She holds a degree in journalism from the University of North Texas. When she’s not working on finance-related content, Caroline enjoys baseball, traveling and going to concerts.

Renee Earwood, AFC®
Student Loans, Federal Student Loan Debt Repayment Options Expert

Student loans expert Renee Earwood is an accredited financial counselor (AFC) through the Association for Financial Counseling and Planning Education (AFCPE). She has specialized in federal student loans since 2016. Through financial coaching and education, Renee helps borrowers understand their student loans and the strategic options available to them. She has been interviewed for her student loan expertise by numerous media outlets including NerdWallet and The Associated Press. She is the founder and CEO of Student Loan Coach LLC.
 
Renee has over 15 years of experience working in the financial services industry. Transitioning from the retirement and investment industry to financial counseling and education, she was the 14th person nationwide to earn the certified student loan debt counselor certification from the National Foundation for Credit Counseling (NFCC). Since that time, she has worked with thousands of clients through one-on-one counseling sessions and group workshops.
 

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