10 Best Private Student Loans of 2022
Private student loans for college are worth considering if you don’t have enough federal financial aid to pay for your tuition and other costs. But before you sign anything, you’ll want to shop around for the best private student loans.
To start your search, consider these 10 borrowing options we recommend based on factors such as rates, terms, amounts, fees and reviews. (See below for our methodology)
Read on to learn more about each of these lenders in-depth and how to choose the right private lender for your college loans.
10 best private student loans
Here’s our list of some of the best private student loans offered by the top lenders. To compile it, we looked for established lenders offering the best student loan rates and additional benefits, detailed below.
2. Citizens Bank
3. College Ave
5. Education Loan Finance
6. Funding U
9. Sallie Mae
|SLH lender rating: 4.5/5||Fixed APR: 3.22% – 14.75%
Variable APR: 0.98% – 11.90%
|Repayment terms: 5, 10,15 years||Loan amount: Up to 100% of cost of attendance (aggregate maximum of $200,000)|
Overview: If you have trouble finding a cosigner during your search, you may want to include Ascent among your considerations. This online company makes independent loans available to certain students at the same interest rates offered to borrowers who do apply with a guarantor. However, Ascent does have higher APR rates than some other lenders and some of the eligibility criteria for borrowers is unclear.
- Available to undergraduate and graduate students enrolled at least half time
- Accessible to U.S. citizens, permanent residents, DACA students and other noncitizen students who apply with a U.S. citizen or permanent resident cosigner
- No application or origination fees or prepayment penalties
- Interest-rate reduction (up to 1.00%) if you automate your monthly payments
- Three repayment options for qualifying borrowers: deferred payment, interest-only payments and fixed $25 payments
- Expansive deferment and forbearance options in cases of returning to school, serving in the military, working a residency or internship and experiencing hardship
- Receive a 1% cashback bonus upon graduation
- To qualify for the noncosigned loan, you must:
- Be a college junior or senior
- Be enrolled full time in school
- Not all schools are eligible for Ascent loans — you must attend one of the schools on Ascent’s list of eligible institutions
- Two years of full and timely payments are required to release your cosigner
2. Citizens Bank
|SLH lender rating: 4.31/5||Fixed APR: 3.72% – 10.59%||Repayment terms: 5,10,15 years||Loan amount: $1,000 to 100% of the cost of attendance|
Overview: With loan options for students and parents, Citizens Bank sets itself apart by offering multiyear approval. You can apply once for multiple years of financing for your degree — that could come in handy whether you’re an undergrad going into a four-year program, or a graduate or professional student staring down a long road to your advanced degree.
- Borrowers must be pursuing bachelor’s, master’s, graduate or professional degree, or be the parent of a student
- If you’re an international student, you must have a cosigner who is a U.S. citizen or resident
- Must have credit score of at least 700
- No application or origination fee
- No fee for paying off the loan early
- Interest-rate reduction of 0.25 percentage points if you set up automatic payments
- Two repayment options for students while in school, or payment deferment until after graduation
- Multiyear approval, so you can set up borrowing for future semesters
- Applicants will most likely need a good credit score (at least 700) or a qualified cosigner to be approved
- Potential qualification for cosigner release is based on creditworthiness and whether there have been 36 consecutive on-time principal and interest payments
3. College Ave
|SLH lender rating: 4.6/5||Fixed APR: 3.49% – 12.99%
Variable APR: 1.19% – 11.98%
|Repayment terms: 5, 8, 10, 15 years||Loan amount: $1,000 to as much as 100% of the cost of attendance|
Overview: This online-only lender, founded by former Sallie Mae executives, distinguishes itself with increased flexibility. Borrowers can expect greater in-school and post-school repayment options than what’s found elsewhere. Plus, students and parents alike will appreciate its perks, such as no application or origination fees and low rates, in spite of the slow path to cosigner release available at College Ave.
- Must have a 660 credit score (or cosigner with good credit)
- Must have U.S. citizenship or permanent residency (or SSN and permanent resident cosigner with good credit)
- Be enrolled at an accredited college or university
- No application, origination or prepayment fees
- Interest-rate reduction of 0.25% if you set up automatic payments
- Four repayment options for students, including the option to defer payments until after graduation (this choice is not available to parent borrowers)
- Up to $2,500 can be deposited into a parent’s bank account to pay for student’s education costs
- Minimum credit score requirement set at 660
- Potential qualification for cosigner release isn’t available until more than half the scheduled repayment period has elapsed
- Repayment protections like forbearance aren’t clearly defined
|SLH lender rating: 4.6/5||Fixed APR: 3.24% – 12.78%
Variable APR: 0.94% – 11.44%
|Repayment terms:5, 10, 15, 20 years||Loan amount: $0 to 100% of the cost of attendance|
Overview: This student loan refinance company began offering some of the best private student loan options in 2019, and it’s a competitive lender for undergraduate and postgraduate students alike. Unlike most lenders, Earnest considers additional criteria when determining your interest rate, including your savings history and career trajectory. On the downside, if you need to apply with a cosigner to be eligible or to lower your rate, Earnest has stricter cosigner requirements than some other lenders.
- Available to students that are enrolled full-time (can be enrolled half-time if student is a senior)
- Students must be U.S. citizens or residents, or international students who have a valid SSN and a creditworthy cosigner
- Borrowers or cosigners with the following:
- A FICO credit score of at least 650
- Minimum of three years of credit history
- Minimum annual income of $35,000
- No origination, disbursement or prepayment fees
- A 0.25% interest rate reduction if you set up monthly payments via automatic debit
- Three repayment options to choose from while you’re in school and during your grace period (fixed, interest-only or full payments), as well as deferred repayment
- Borrowers receive a six or nine-month grace period before entering repayment
- Borrowers can skip a payment once per year (although this comes at the cost of interest accruing)
- Deferment available for borrowers in the military
- Cosigners (or borrowers without a cosigner on undergraduate loans) must have an income of at least $35,000
- Cosigners (or borrowers without a cosigner) must have a credit score at or above 650
- Cosigners can’t be released from the loan unless loan is refinanced
- Loans not available in Nevada
5. Education Loan Finance
|SLH lender rating: 4.1/5||Fixed APR: 3.20% – 11.99%
Variable APR: 1.30% – 11.52%
|Loan terms: 5 years||Loan amount: $1,000 to 100% of the cost of one academic year|
Overview: ELFI, a division of SouthEast Bank in Tennessee, provided student loans to in-school borrowers and their parents. It doesn’t offer common discounts, pledging that it bakes those discounts into its competitively-offered APRs. You can easily check rates (and confirm your eligibility) using the online-only lender’s prequalification tool — just be mindful of ELFI’s credit score requirements.
- Students and cosigners must be U.S. citizens or permanent resident
- Students (or their cosigners) must have minimum credit score of 680
- Students must be enrolled in school at least half time and pursuing their bachelor’s, master’s or doctorate degree
- No application or origination fee
- Work with a dedicated student loan advisor during your application process
- No fee for paying off the loan early
- Three in-school repayment options for borrowers, as well as full deferment
- Borrowers and cosigners must be permanent residents with good credit scores (at least 680)
- Limited forms of forbearance due to financial hardship are available on a case-by-case basis
- Cosigner release is not available
6. Funding U
|SLH lender rating: 3.8/5||Fixed APR: 7.99% – 13.49%
Variable APR: 0.00% – 0.00%
|Repayment terms: 10 years||Loan amount: $0 to $0 per year ($7,500 per semester)|
Overview: For any student that doesn’t have access to — or simply doesn’t want — a cosigner, Funding U may be a good option. Unlike some lenders, Funding U even offers loans to undocumented students (such as Deferred Acton for Childhood Arrivals (DACA) recipients). Keep in mind that this lender only gives loans out to students — not parents — and is more limited than some other lenders in how much it’s willing to offer.
- Available to U.S. citizens, permanent residents or DACA recipients
- Accessible to students who are age 18 or older
- Must be enrolled full time at one of about 1,450 eligible four-year, nonprofit schools
- Must meet minimum grade point average
- Allows students to prequalify without a credit score or income
- DACA recipients are eligible to apply for private loans
- Transparency around forbearance programs if borrowers need to pause payments
- Loan amounts are more restricted than some other lenders
- Borrowers required to make in-school payments (can be partial or interest only)
- No option to choose your loan term — automatically assigned
|SLH lender rating: 4.3/5||Fixed APR: 4.12% – 7.78%
Variable APR: 2.09% – 6.77%
|Repayment terms: 10, 20 years||Loan amount: $1,000 to $100,000 (for undergraduate), $1,000 to $150,000 (graduate)|
Overview: ZuntaFi, a South Dakota-based servicer, offers iHELP student loans which can be used by students and their parents for undergraduate, graduate, medical and flight school. Unfortunately, iHELP is limited in where it’s offered and is only available in up to 19 states. Keep in mind while applying that ZuntaFi doesn’t offer prequalification, so you’ll need to pass a hard-credit pull to see your rates.
- Must be a U.S. citizen or permanent resident
- Must have three years of good credit history
- Must have minimum income of $18,000 to $24,000
- Must be enrolled at least half time at an eligible school
- Can choose between three repayment options, including deferment
- After two years, cosigners can be released
- Offers deferment, forbearance and alternative repayment plans if you return to school or experience economic hardship
- Can receive 0.25% off if you sign up for autopay
- Cannot prequalify for a loan, so applying is required to see if you qualify (this can hurt your credit temporarily)
- Loans are only available in some states
- Only accessible to U.S. citizens or permanent residents, not to nontraditional students
|SLH lender rating: 3.6/5||Fixed APR: 2.99% – 9.89%
Variable APR: 1.09% – 8.19%
|Repayment terms: 15 years||Loan amount: $1,000 to $65,000 per year, depending on degree|
Overview: Thanks to its zero application or origination fees and competitive APRs, PNC may be a good lending option for U.S. citizens or permanent residents that are enrolled at least half time. While the bank encourages you to apply with a cosigner to score a lower rate, it’ll take four years of timely payments to release your cosigner.
- Available to undergraduate and graduate students, plus professional students who are enrolled in school, working in residency or studying for their bar exam
- Accessible only to U.S. citizens and permanent residents
- Cosigners or students without cosigners must have at least two years of steady income or employment and credit history
- No application or origination fees
- Interest-rate reduction of 0.50% if you set up monthly payments by automatic debit
- Three repayment options to choose from: deferment, interest-only or full payments while you’re in school and during your grace period
- No loan prequalification, so PNC will do a hard-credit pull when you apply
- More narrow limits on how much you can borrow compared to some other lenders
- International and part-time students are not eligible
9. Sallie Mae
|SLH lender rating: 4.4/5||Fixed APR: 3.75% – 13.72%
Variable APR: 2.00% – 12.35%
|Repayment terms: 5, 10, 15, 20 years||Loan amount: $1,000 and up to the cost of attendance|
Overview: With a best-in-class cosigner release policy, Sallie Mae could be your top choice if you want a cosigner. One of the longest-running lenders of the bunch (in operation since 1972), it also offers no application and origination fees, low rates and unique perks like study support and credit score tracking, all free of charge. One drawback, however, is the borrower’s inability to select the length of their repayment term.
- Available to undergraduate and graduate students — even part-timers — as well as parents borrowing on behalf of students
- Available for dental and medical school and/or residencies, other health profession loans, MBA loans, law school and bar study fees
- No origination fee or prepayment penalty
- Interest-rate reduction (0.25 percentage points) if you set up monthly payments by automatic debit with Sallie Mae
- Three repayment options to choose from: deferment, fixed or interest-only while you’re in school and during your grace period
- Borrowers receive free tutoring for school or study resources through educational tech firm Chegg
- Borrowers can apply for cosigner release after graduation and when 12 on-time principal and interest payments have been made (without having used hardship forbearance or a modified repayment plan during that time)
- Pause your loan repayment for up to 12 months (in three-month increments) using forbearance
- Repayment terms of 5, 10, 15, 20 years are available — but you can’t choose your specific term
|SLH lender rating: 4.8/5||Fixed APR: 3.75% – 13.30%
Variable APR: 1.89% – 11.98%
|Repayment terms: 5, 10, 15 years||Loan amount: $1,000 up to the cost of attendance|
Overview: SoFi is better known for student loan refinancing — however, in 2019, it also launched a private student loan offering. With SoFi, you can prequalify and check your rate within minutes without affecting your credit. SoFi’s no-fee loans are worth considering, but be aware that half-time enrollment status is an eligibility factor.
- Available to undergraduate students and graduate students pursuing a law or business degree, as well as parent borrowers
- Accessible to U.S. citizens, permanent residents and nonpermanent residents
- Student must attend eligible institution
- Cosigners (or students without cosigners) must have income
- No origination, disbursement, prepayment or late payment fees
- Interest-rate reduction (0.25%) if you set up monthly payments by automatic debit (additional 0.125% discount available to families with loans for multiple students)
- Three repayment options to choose from while you’re in school and during your grace period (fixed, interest-only or full payments), as well as deferred
- SoFi members are also eligible to benefit from the company’s other services, including career coaching and wealth management
- Cosigner release is only available after making two years’ worth of on-time payments.
How to decide which lender is best for you
A variety of factors differentiate the best private student loans, though the main ones to focus on are interest rates and fees.
The amount of money you take out on your private school loans is only the beginning. Give yourself the best chance of maintaining a manageable level of debt by keeping your rates and fees as low as possible.
As you review different interest rates, remember that you can apply for more than one loan to see which one will give you your best deal. There are two ways you can do so without your credit score taking a hit:
- Many private student loan lenders do a soft pull on your credit, which enables you to see what you might be approved for without negatively impacting your credit score.
- If you were to file a formal application with more than one lender, you could avoid dinging your credit by rate shopping within a two-week window.
Besides looking for offers for the best private loans for college, also look out for beneficial perks. For example, some lenders offer college students a lower rate for good grades, while others provide the ability to release your cosigner.
Once you’ve narrowed down your list of options, use a monthly payment calculator to estimate what your regular dues might be.
Best private student loans for special situation
If you peruse a list of the best private student loans that are general in nature, you could miss out on lenders that cater specifically to your needs. Different lenders serve students attending certain types of schools, for example, or those pursuing specialized degrees.
To check out the banks, credit unions and online companies that we think could be one of the best for your situation, click away here:
Federal vs. private student loans
When you consider whether a private lender is right for you, remember that even the best private student loans for college don’t come with the same protections as federal loans.
|Interest rates||4.99%-7.54% (for loans originating 7/1/22-6/30/23)||Fixed and variable rates vary by lender|
|Origination fee||1.057% or 4.228%||Not typically charged by top-rated lenders|
|Credit check||Not necessary (except for PLUS loans)||Required (though applying with a cosigner can help you qualify)|
|Subsidized loans||Available for families with financial need||Not available|
|Changing repayment plans||Yes, at any time and free of charge||Not available|
|Postponing monthly dues||Variety of short- and long-term deferments, forbearances available||Short-term economic hardship forbearance, back-to-school deferment sometimes available|
|Student loan forgiveness||Multiple federally-administered loan forgiveness programs||Not available, though loan repayment assistance programs could be useful|
|For more details, see our federal vs. private loan comparison|
Federal student loans offer income-driven repayment plans, deferment and forbearance, as well as forgiveness program options. Some private school loans will offer hardship options in case your income hits a snag, but not all have them available.
Plus, private loans for college — much like federal direct unsubsidized loans — start accruing interest immediately. This contrasts with subsidized federal student loans — with those loans, the Department of Education will pay the interest until you graduate and during any deferment.
Keep in mind, too, that you’ll likely need a cosigner — that’s because private student loan offers are based on your creditworthiness, and most college students are too young to have much of a credit history.
If you do get a loan with a cosigner, make sure all your payments are on time. If not, your cosigner will be responsible — and missing payments or going into default can damage their credit as well as yours.
If you see tough financial times ahead, reach out to your lender immediately to find out if you can adjust your repayment plan — it doesn’t hurt to ask. Plus, the sooner you handle the situation, the better your chances of a good outcome.
Like all financial tools, private loans for college can be a lifesaver if you use them wisely. They are best used as a backup when you can’t get enough federal student loans to cover your tuition and other education costs. In that case, private student loans can be a great way to finish off the funding for your education.
How to get a private student loan
Each private lender will have its own unique application and approval methods. However, most lenders typically follow the process laid out below when it comes to their application process. Here’s what you may expect:
1. Check the eligibility requirements: Before going through the trouble of applying for a private student loan, you’ll want to make sure you meet the lender’s basic eligibility criteria. Pay particular attention to details such as enrollment status, cosigner requirements, income standards, minimum credit score and citizenship criteria.
2. Fill out an application: Lenders typically require that you create an account on their website before filling out an online application form. Many of these reputable lenders offer the ability to view your potential rate while submitting only to a soft credit check, which won’t ding your credit report. However, not all lenders offer prequalification tools, so you may want to check before deciding to apply.
3. Provide documentation: After you’ve submitted your application, the lender will typically contact you and request that you provide documents proving the information you provided. You may have to demonstrate the following:
a. Proof of your (and your cosigner’s, if applicable) identity (e.g., a passport, driver’s license or birth certificate
b. Proof of your (or your cosigner’s) income (e.g., tax filings)
c. Proof of your (or your cosigner’s) employment (e.g., W-2 forms or pay stubs)
d. Your or your cosigner’s credit score
e.Cost of attendance at your school (may be included in your acceptance letter from the school)
f.Year in school and enrollment status
g. Loan amount
h. Expected graduation date
4. Sign for the loan: From here, the approval process can take anywhere from a few minutes to several days depending on the lender. If you’re approved, you’ll agree on the final details, including rates, terms and the amount and sign for the loan. The lender will then verify with your school that the funds are indeed the correct amount you need, then disburse the money directly to the school. Unused student loan funds typically get sent to you.
Pros and cons of private student loans
Private student loans aren’t a perfect solution for all borrowers, so it’s good to consider the pros and cons. For instance, the fact that they’re credit-based makes them inherently more accessible — and beneficial — to borrowers with at least good credit or a cosigner with good credit.
The vast majority of private loans are cosigned, which also adds risk to the borrowing process. As mentioned above, if you attach a cosigner to your undergraduate loan, they would be held as responsible as you would be for repayment. So if you miss payments, for example, their credit report and score will reflect that.
Defaulting on private loan debt is also a much easier trap to fall into. Some private lenders consider your debt in default after just one payment — this can bring potentially serious consequences, starting with debt collections proceedings. By comparison, a delinquent federal loan isn’t considered in default until at least 270 days since you missed payment date.
Private loans also carry far fewer repayment protections to prevent delinquency and default. Top-rated lenders offer customers the ability to postpone payments via deferment and forbearance for reasons such as unemployment or financial hardship. But don’t expect to be able to modify your repayment terms after your loan has been disbursed.
These and other cons of private loans should be weighed before you decide to borrow.
|Pros and cons of private student loans|
|● Be rewarded for excellent credit (or a creditworthy cosigner) with low APRs
● Borrow up to your cost of attendance
● Wait for statute of limitations to expire if you default in repayment
|● Not eligible for government-exclusive programs like income-driven repayment, loan forgiveness and subsidies
● Variable APRs can increase the cost of your loan
● Cosigner could be required to access lowest, advertised APRs
Alternatives to private student loans
While private student loans can bridge the gap for some students and their families to be able to afford college, this route may not be for everyone. If a private student loan isn’t a good fit for your financial situation, consider some of these alternative options.
- Apply for grants and scholarships: Grants and scholarships are types of financial aid that will not only help to make school more affordable, but you won’t have to pay them back. Some grants and scholarships are based on identity while others are more focused on merit, such as grade point average.
- Fill out a FAFSA: When anticipating attending college, after you’ve applied, you’ll want to fill out the Free Application for Federal Student Aid (FAFSA) as soon as possible. This form can show you how much federal aid — whether that be grants or loans — you may be eligible for so you can take out smaller private student loans (or even avoid them altogether).
- Consider cheaper alternatives: With college tuition on the rise, it may be wise to consider schools with cheaper tuition or explore taking general education courses at your local community college first. If you’re determined to attend a more expensive institution, however, get creative on how to make it more affordable such as living rent-free with family members, working part time or taking a gap year to save up money before you attend.
Private student loan FAQs
How do private student loans work?
For private student loans, you typically shop around with banks, credit unions and online lenders to find the best overall loan offer for you. Unlike federal loans, private loans are credit-based, so your eligibility and terms will depend on your credit history. If you’re a student with a thin or poor credit file, you could improve your application by adding a creditworthy cosigner.
Once you’ve gained approval, your lender will certify the funding amount with the college or university you’re attending. You may be allowed to borrow up to 100% of your cost of attendance, minus other financial aid. The funds are usually disbursed directly to the school, with any leftover amount credited to you later.
Your private lender may have a loan servicer that manages the repayment of your debt. Keep in mind that private loans have few safeguards if you run into trouble after leaving school, so they’re often used as a supplement for federal loans, rather than as a substitute.
Who qualifies for a private student loan?
Creditworthy students, including undergraduates, graduate and professional students — as well as their parents or legal guardians — can qualify for private student loans. To be eligible, the primary borrower or their cosigner must meet lenders’ underwriting criteria. Besides your credit history, credit score and debt-to-income ratios, lenders may also set requirements related to your age, school and citizenship.
Fortunately, many lenders cater to nontraditional applicants, such as those who can’t find a cosigner, attend school part time or aren’t permanent U.S. residents, among other cases. The most reputable lenders also allow you to prequalify to check your eligibility and rates before submitting a formal application and undergoing a credit check.
Is Salle Mae a good lender?
Sallie Mae is a veteran of the private student loan industry and is among our top-rated lenders. With that said, no lender is perfect for all borrowers, so check out our Sallie Mae review before filing an application.
Can you negotiate a lower rate on private student loans?
The rate you’re awarded on private student loans will depend on the creditworthiness of you or your cosigner, if you have one. To score the lowest advertised rates, you or your cosigner may need an excellent credit score (starting around 700), though a merely “good” score (about 600 or higher) should at least help you qualify.
Lenders typically rely on their underwriting processes to determine each borrower’s interest rate, so negotiation isn’t usually possible. With that said, you could lower your awarded interest rate by opting for a variable rate over a fixed rate, or by scoring rate discounts for enrolling in autopay or making a certain number of consecutive payments. Rate reductions are also achievable through academic performance, or by graduating or opening a bank account with the same lender.
Do private student loans have fees?
Many of the best private student loans carry no fees for application, origination or prepayment. A select few lenders even waive common and arguably fair extra charges, such as late payments or returned checks. Generally, however, many private student loan lenders and companies do still impose fees.
It’s important to ask lenders’ customer service teams about these fees before choosing a loan. You’ll want to avoid lenders that punish you with federal loan-like origination fees, which can eat into your balance, and prepayment penalties, which could dissuade you from paying down your debt ahead of schedule.
Can private student loans be forgiven?
Unlike with federal loans, there are no national private loan forgiveness programs. However, there are dozens of local loan repayment assistance programs available for private education debt. These programs are available to borrowers, often depending on their location and/or occupation.
In some cases, local governments, organizations or employers promise to cover a portion — or even the entirety — of your loan balance in exchange for your employment in an underserved field or geographical area. Check out our database of 120-plus loan repayment assistance programs to see if any could be a fit for your situation.
Can you transfer private student loans to federal ones?
No, private student loans can’t be transferred to the federal government. Private loans are owned by your lender, unless they’re sold to another loan servicer or you elect to refinance them with a different private financial institution.
If you have one private student loan and three federal loans, for example, the only way to combine all four would be through student loan refinancing. However, refinancing would strip those federal loans of their government-exclusive protections, so it may not be the right move for every borrower.
By offering an unbiased and comprehensive description of each lender’s rates and terms, Student Loan Hero can provide peace of mind when making a financial decision for your future. We chose student loans from private lenders that service students and their parents when it comes to covering the cost of a post-secondary education.
Private student loan lenders were chosen based on the following criteria:
- Transparent rates and repayment terms
- Loan amounts large enough to cover college expenses
- Little to no fees
Comments are closed.