Skip to content Skip to sidebar Skip to footer

Best Private Student Loans

It's best to use private student loans to pay for college after you've borrowed the maximum you qualify for on both subsidized and unsubsidized federal student loans.

Private student loans come from banks, credit unions and online lenders, and unlike federal student loans for students, they require a credit check. This means that most students will need a co-signer to qualify. Private student loans are also more expensive than federal loans—especially now that federal loan rates have fallen to historic lows—and typically don't offer the flexible payment options that their federal counterparts do.

Here's why there's no five-star lender on our list of private student loans: In the vast majority of cases, the best option for financing college is a federal student loan.

Tips for comparing private student loans

As you prepare for a private student loan, don't wait until your school decides how much of the loan you can handle: Do your own due diligence. Experts recommend not borrowing more than you are likely to earn in the first year after graduating from college. This can protect you from unmanageable monthly payments after you leave school.

When considering each lender, consider the following factors:

The amount you can borrow

The total cost of the loan, including interest rate and fees

When you have to start paying

How long do you have to pay off the loan?

What help does the lender offer if you have trouble paying?

your credit score; Lower scores get higher interest rates

Discounts available, including automatic payment discounts

If you can add a co-signer (and if you can qualify for a co-signer later)


We ranked the 12 lenders that generated 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 selected the top nine for the show based on those with three stars or higher.

The following is the weighting assigned to each category:

Difficulty options: 30%

Application process: 16%

Loan terms: 14%

Interest rates: 13%

Eligibility: 14%

Fee: 13%

Specific features considered in each category include the number of deductible months available, economic hardship repayment options available outside of traditional deductibles, benefits such as cash back bonuses upon graduation, rebates, time to default liabilities, disclosure of credit score and income requirements and other factors.

Lenders who offered interest rates below 10% scored the highest, as did those who offered more than 12 months of standard forbearance, who made their loans available to non-US citizens, who offered interest rate discounts above the standard 0.25% for automatic payment, which offered conditions Multiple loan with a maximum of 15 years and a minimum commission.

In some cases, lenders were awarded partial points, with a maximum of 3% of the final score left to editorial discretion based on the quality of the consumer-friendly features offered.

How do student loans work?

Students and their parents can borrow private or federal student loans to pay for higher education. These loans can be used to pay for many school-related expenses, including:


board and room

Books and school supplies

transportation costs

Technological equipment such as a computer or related software

Food, utilities and other common living expenses

Specific repayment terms will vary depending on your lender, but most student loans don't go into repayment until after the student leaves school. You can usually specify a repayment term between 5 and 20 years, although longer repayment terms usually come with higher interest rates.

Federal Student Loans vs. Private Student Loans

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

A fixed interest rate that does not depend on your creditworthiness; The same standard rates are offered to all borrowers

More flexible payment plans, including options that let you base your monthly payments on your income

More loose options for delay and patience

Several loan forgiveness and loan forgiveness programs you may qualify for

For these reasons, most borrowers turn to the Fed first.