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Best Private Student Loans for 2024
Full college cost coverage, a simple application process, and various repayment options are just some of the benefits you’ll enjoy with private student loans. As usual, however, the market is overloaded with options, and choosing the right student loan is the first big financial decision most Americans make. Luckily for you, we compared the industry-leading lenders and found the best private student loans to choose from.
Best Private Student Loan Offers of November 2024
College Ave
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
College Ave offers personal student loans for undergraduate and MBA students. Operating in all 50 states, this lender is best known for its versatile repayment options, three-minute application process, and a cashback reward program. Read more
- •Flexible repayment options
- •Fixed and variable rates
- •Cashback rewards
Ascent
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
If you’re looking for non-cosigned student loans, Ascent is the best option for you. As a student, private loans for borrowers with low credit scores will be particularly interesting to you, and they’re Ascent’s specialty. Read more
- •Two non-cosigned loan options
- •Four-step loan approval
- •Flexible repayment options
Earnest
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Although the requirements are hard to meet, Earnest’s loans come with a grace period of nine months, various in-school repayment options, and a 12-month forbearance period. Besides, Earnest offers competitive rates and no late payment fees. Read more
- •Nine-month grace period
- •Skip payment every 12 months
- •Application via mobile phone
Discover
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Discover’s loans come with competitive rates, post-graduation rewards, and no fees. In addition, Discover customer service is one of the best you will encounter. However, limited payment options are the company's downside. Read more
- •Industry-lowest APR
- •Various financial products
- •Post-graduation rewards
Best Private Student Loans for 2024:
- College Ave - Consider if you need a cosigned loan with flexible repayment options
- Ascent - Consider if you want an independent loan
- Earnest - Consider if you want a cosigned loan
- Discover - Consider if you’re looking for versatile financial products
Detailed Reviews of Private Student Loans
College Ave Review
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
College Ave is an online lender that offers various types of loans and financial products for students who want to refinance their loans.
Loan types
College Ave offers undergraduate, MBA, and parent student loans. While most of the loans approved by this lender need to be cosigned, you can also apply for a non-cosigned private loan, assuming you have a good credit score.
The minimum amount you can apply for is $1,000, while the maximum goes up to the full attendance cost.
Aside from offering student loans that cover all your expenses (tuition fees, student accommodation, books, etc.), College Ave’s loans don’t require full-time school enrollment.
Loan terms and fees
College Ave provides loans with both fixed and variable rates. APR for fixed undergraduate student loans can be as low as 3.49% and can’t go above 12.99%. This lender also has the low rates with variable APR. The minimum variable APR can be as low as 1.09%, and the maximum it might rise to during the lifetime of your loan is 11.98%.
College Ave doesn’t charge application, origination, or prepayment penalty fees, but late payments will cost you.
Eligibility requirements and application process
Loans by College Ave are available in all 50 states. US citizens can apply for a loan without a cosigner, but international students must have a cosigner with a permanent US residency. All students applying for a loan must be enrolled in an eligible student program and attending classes.
The lender will also check your credit score, monthly income, and debt-to-income ratio. Before applying for a loan, you can let College Ave run a soft check to see if your credit score is good enough and get an estimate for potential rates and payments.
Although College Ave enables non-cosigned loans, 96% of its undergraduate loans have cosigners. Their credit score is a deciding factor for loan amounts and interest rates.
Repayment terms
It’s always good to have plenty of choices for customizing your loan to fit your budget. College Ave offers repayment periods of 5, 8, 10, or 15 years. And if you’re a medical, law, or dental student, you’re eligible for College Ave’s 20-year repayment program.
College Ave offers four ways to repay your loan while in school: Full principal and interest payment, interest-only, flat rate, and deferred payment.
College Ave grants borrowers a grace period after graduation, during which they don’t need to make payments. The grace period is six months for undergraduate students, while it’s nine months for graduate students. Medical students can defer their payments for 36 months. You can also get a 6-month extension on your grace period.
College Ave deferment and forbearance options allow you to postpone your payments, too. Deferment is a possibility for students enrolled at school at least half-time during their military service. Forbearance options are more flexible: You can postpone your loan payments for up to 12 months if you’re facing financial hardship.
Releasing a cosigner takes a while with College Ave, a rare drawback with this lender. More than half of the repayment period must pass for the cosigner to be released from their obligation.
Rewards and unique features
College Ave’s most significant selling point is its partnership with Payce Rewards, enabling borrowers to earn cashback rewards on various purchases that go towards paying off their loan.
If you enable auto-pay for your payments, you can get 0.25% off on your monthly loan installment. You just need to create an account and select the recurring payment method to get a payment reduction.
Final thoughts
College Ave is worth considering if you’re looking for a lender with flexible repayment options. The versatility applies to the potential grace period and postponement options, too.
Reasons to Apply:
- Auto-pay option
- Three-minute application process
- Free rate calculator
- Various deferment and forbearance opportunities
Ascent Review
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Ascent is best-known for its independent undergraduate student loans, but it also offers loans with a cosigner for both undergraduate and graduate students. The company is praised for its versatile repayment terms, diverse forbearance and deferment options, excellent referral program, and cashback rewards.
Loan types
Ascent offers private student loans for undergraduate, MBA, medical, dental, law, and doctoral students. They can be cosigned or not, depending on the borrower’s creditworthiness.
However, while both options exist, Ascent is primarily focused on students who want to take out an independent loan. Non-cosigned loans can be either credit-based or future-income-based. For an independent future-income-based loan, a borrower must have a GPA of at least 2.9 and meet the school’s SAP threshold.
Loan terms and fees
Ascent’s cosigned and non-cosigned undergraduate loans can have either fixed or variable interest rates. Market-dependent APR ranges from 4.12% to 14.75%. Fixed APR can be as low as 3.04% or as high as 13.30%, depending on your credit score and debt-to-income ratio.
The minimum loan amount you can borrow is $2,001, while the maximum amount is up to $400,000 for credit-based loans. If you want to apply for an independent future income-based loan, the maximum amount per academic year is $20,000.
Ascent will not charge you any fees if you pay off your loan earlier.
Eligibility requirements and application process
Eligibility requirements differ based on loan type. Generally, the lender considers your credit history, but other things can also factor in, depending on whether you have a cosigner or not. Ascent sets a credit score requirement for both the student and their cosigner.
While it hasn’t set an explicit numerical threshold, Ascent will make a soft credit inquiry without impacting your score to determine your eligibility.
The most affordable options also require a cosigner income of $24,000 for the current and previous year. The same requirement pertains to students applying without a cosigner.
The application process couldn’t be simpler and faster. After you prequalify for a loan, you need to submit your application and any additional documents. Ascent then forwards the loan to your school for verification; it usually takes the school several weeks to complete the loan procedure.
Repayment terms
Ascent offers loans with a repayment term of 5, 7, 10, 12, 15, or 20 years.
You can postpone your payment for nine months if you apply for an undergraduate student loan, nine months for graduate programs, and up to 36 months for a medical student loan.
Other payment options include interest-only repayment and a $25 minimum flat rate repayment option.
Rewards and unique features
The referral program truly makes Ascent shine. If someone applies with your referral code, you can earn $25. Once the loan application is accepted, you’ll earn $500 more, and the person you referred can earn $100.
If you enable auto-pay with a flat in-school payment, your installment amounts will go down by 0.25% or 1% if your loan is credit-based or future-income-based, respectively.
Ascent loans also come with a 1% cashback reward program after you graduate.
The total forbearance postponement can last up to 24 months during the loan life. You can also have four consecutive forbearance periods of three months. In-school deferment and military deferment are also available.
Final thoughts
If you need a private student loan but don’t need anyone to sign with you, Ascent is the lender you’re looking for.
Reasons to Apply:
- Up to 36-month grace period
- Excellent referral program
- 1% cashback rewards after graduation
- Fast and simple application
Ascent Student Loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 10/01/2022 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.
Earnest Review
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Founded in 2013, Earnest is a San Francisco-based online lender specializing in providing personal loans and refinancing student loans. The lender is best-known for its flexible repayment terms and forbearance options.
Loan types
Earnest offers student loans for both undergraduate and graduate students. You can apply for a loan with or without a cosigner, but you need to meet a long list of requirements to get an independent loan.
Earnest loans are designed for students who already have a federal loan but need extra money to cover college costs.
Loan terms and fees
Earnest doesn’t charge application, origination, or prepayment penalty fees. But it won’t charge you a late payment fee, either, unlike most lenders.
Your interest rate is calculated based on your or your cosigner’s creditworthiness. The loan amount you apply for is also taken into consideration. The minimum loan amount is $1,000, and the maximum can go as high as the total cost of attendance.
For private student loans, the interest rate with variable APR starts at 1.05%, while the fixed APR starts at 3.49%.
Eligibility requirements and application process
Earnest has strict application requirements: First off, you need to have a US permanent residence card and be of minimum legal age for your state. Second, full-time school enrollment is required to qualify for a loan. Before applying, check if the lender offers all its loan types in your state.
For example, Earnest’s loans are only unavailable in Nevada.
The eligibility standards get even stricter if you need an independent loan, so Earnest might not be the right place to get a loan without a cosigner. To even stand a chance, you need to:
- Have a minimum credit score of 665
- Have an income of at least $35,000 per year
- Have a minimum of 3 years of credit history
- Have no bankruptcies
The lender also checks other aspects of your finances, like whether you have outstanding credit card balances, personal loans, and savings.
The Earnest website can tell you if you’re entitled to loan consideration. To that end, Earnest will gather your personal information, like name, address, phone number, and estimated credit score. As a result, you’ll be able to see estimates for your potential private student loan rates.
Earnest’s online application process includes the added benefit of uploading the necessary documents via smartphone. The lender will forward a loan offer to your email within 72 hours of your application.
Repayment terms
Earnest’s main selling point is the extended grace period on student loan payments. You don’t need to pay your installments for nine months after you finish school. This only works for those who elected to defer their payments entirely while in school, though - if you choose to pay off your loan during your studies, the after-graduation grace period will not apply.
There are several possibilities in terms of interest rates if you opt for in-school payments. For many students, the most tempting offer is the $25 monthly flat payment. Those who have a cosigner can opt for making full payments, as well. And if neither of those work for you, you can decide to only pay off your accrued interest while studying.
Rewards and unique features
Earnest will meet you halfway in case of financial hardship, too, with a forbearance period of 12 months. If things aren’t that bad, but you need to catch a break, you can skip one monthly rate once in 12 months.
Final thoughts
Even with its strict eligibility requirements, Earnest is one of the better lenders on the market. It offers competitive interest rates and customizable repayment plans. The lender has lots of positive testimonials, and the option to postpone a payment once in 12 months is also appreciated.
Reasons to Apply:
- Loan terms between 5 and 15 years
- 0.25% auto-pay discount
- Competitive interest rates
- Prequalification available
Discover Review
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Discover Bank offers one of the lowest interest rates, along with various loan types, and good student rewards.
Loan types
Discover Bank is a popular destination for students in need of loans to cover their studies’ entire cost. Discover’s loan assortment includes undergraduate loans, loans for students pursuing master’s or doctoral degrees, and MBA students.
Discover also offers law school loans with a repayment period of 20 years, as well as a specialized bar loan to cover the costs of preparing for the exam. Students enrolled in medical and dental schools are also eligible for extended loans and specialized residency loans.
Discover offers debt consolidation loans, too.
At Discover, you can apply for a loan with or without a cosigner if you’re a US citizen. International students must have a cosigner to apply for a loan.
Loan terms and fees
Discover’s loans are a good choice if you need to cover bigger financial gaps while you’re in college. However, if you need money to buy books, taking out a loan is not your smartest option: Much like other lenders, Discover sets its lower limit on loan amounts at $1,000. The maximum borrowing amount covers full college costs.
Variable APR can bring your interest rate down to 1.24%, while fixed APR can go as low as 4.24% if you enroll in the auto-pay program. The interest rate mainly depends on your or your cosigner's creditworthiness. The highest variable APR is 11.99%, and the highest fixed APR is 12.99%.
Eligibility requirements and application process
Discover’s requirements for a student loan might not be as strict as Earnest’s, but you still need to meet several conditions to get one. You must be enrolled in an undergraduate school program in an eligible school at least part-time, or pursuing a graduate, law, health profession, or MBA degree.
Discover reviews your credit score and history, though there is no explicit limit. If you don’t have one or it’s bad, you’d be better served by applying with a cosigner.
The downside is that it doesn’t offer prequalification nor a loan rate estimate. Instead, you need to complete your application and endure a hard credit inquiry to find whether you are eligible or not.
However, the bank does have a multi-year option that enables pre-qualification for the next academic year - you won’t need to pass another hard credit inquiry.
Lenders usually don’t charge origination or application fees, but they charge late payment fees that can be extremely high. Not Discover, though - its loans are fee-free.
Repayment terms
Discover offers loans with a repayment period of 15 years for undergraduate and 20 years for graduate, law, and medical degree loans.
You can choose between fixed in-school rates and interest-only rates. There’s also the option to start paying off your loan after graduation and a six-month grace period.
Rewards and unique features
Discover has one of the best offers in terms of forbearance options. In case you lose your job or have other financial difficulties, Discover can postpone your payments for up to 12 months (but not consecutively) or decrease the installment amount.
Discover gives excellent rewards after graduation, too, provided you qualify. If you complete your school program with a high GPA and have an outstanding principal balance within six years of signing your loan, you can be eligible for a graduation reward.
Final thoughts
Discover might not be the best option for those with bad credit rating, but its assortment includes almost all types of student loans that you can qualify for with a good credit score.
Limited repayment options might discourage you, but Discover’s rates are among the lowest in the industry.
Reasons to Apply:
- No fees
- Bar exam loans
- Fast application procedure
- Multi-year prequalification
Everything You Need to Know Before Taking Out a Private Student Loan
Before choosing to commit to a private student loan, it’s essential to understand how they work, what the potential drawbacks and benefits are, and how to make the best choice possible.
What Is a Private Student Loan?
A private student loan is an educational loan issued by private financial institutions like banks, credit unions or online lenders, used to cover qualifying educational expenses for both undergraduate and graduate students.
How Do Private Student Loans Work?
Private student loans are used to pay for higher education purposes, and can be used to pay for numerous school-related costs, such as tuition, transportation costs, books, computer hardware, food, utilities, room and other common living expenses.
Private lenders usually allow loans that cover the total cost of attendance minus any other financial aid, and will disburse the funds to your school once the loan is finalized. If there are any leftover funds after covering the educational expenses, they will be sent directly to your account.
How Are Student Loan Interest Rates Determined?
As private student loans are credit-based, you will have to meet certain eligibility requirements and go through a credit check. This means that your interest rate is based on your creditworthiness. The higher your credit score, the lower the interest rates usually get.
A large number of undergraduates opt to have one of their parents as a cosigner to the loan, because lenders see this as a lower-risk option and will reduce the loan’s interest rate. These interest rate discounts sometimes reach 0.5%, even when the cosigner doesn’t have a higher credit score than the borrower.
Private student loans can have either fixed or variable interest rates. A fixed-rate loan will have the same interest payments during the entire duration of the loan, while variable rate interest rates can fluctuate depending on economic conditions. This means that the variable-rate loan option will usually, though not always, have a lower initial interest rate.
The repayment terms you choose will also impact your interest rate, as it starts accruing on loan disbursement and longer repayment options lead to increased rates.
If you can afford paying a flat monthly payment or at least cover the interest-only payments, the loan balance will be easier to pay off after graduation, while deferring the payments until after graduation can leave you paying much more in interest over the life of the loan.
Most lenders offer deferred repayment terms of five to 20 years after the usual six-month grace period, and the longer the term is, the higher the interest rate will be.
How to Apply for a Private Student Loan
Beside your credit worthiness, private student loan lenders will have more basic requirements that you will need to meet before applying for a loan. The majority of lenders follow the same set of requirements, but it must be noted that you will encounter different standards with different lenders.
First of all, private lenders will require you to attend an accredited school like a standard four-year college or a two-year community college. Most lenders will have a list of accredited schools, so your first step would be to check if the school you are attending is on there. There are also minimum income requirements that each lender has, and most lenders will look favorably on students who have a job while being enrolled in a school.
Finally, your lender will ask for a proof of age and citizenship. You will have to provide your Social Security number and be either a permanent resident or a US citizen to be eligible for a private student loan. Some states set the minimum age requirement at 19, but most of the borrowers will require you to have a high school diploma and be at least 18 years old to apply for a private student loan.
Federal vs. Private Student Loans
Private student loans differ from federal loans in a number of ways. With federal student loans, you are borrowing from the government and the Department of Education by submitting a Free Application for Federal Student Aid (FAFSA).
Federal loans have lower interest rates and come with perks like forgiveness programs, better income-based repayment options and benefits, but they also have origination fees and borrowing limits which oftentimes do not cover a students’ entire cost of attendance.
Advantages and Disadvantages of Private Student Loans
As you can see by now, private student loans do have some cons to them, but they also come with certain advantages that can make these loan options more attractive and affordable to students. Beside the more competitive interest rates and potential discounts, you also have the ability to compare rates and choose early repayment or deferment options. Private lenders often offer other perks like co-signer release or financial hardship deferment, in case you join the military or lose your job and therefore cannot afford payments.
The main disadvantages of private student loans are the risk that cosigners take, as your inability to make payments will hurt the credit score of your cosigner, and the potential for interest accrual, as private loans accrue interest and are not covered by the government in deferment like it is in the case of federal student loans. Private student loans also do not come with federal forgiveness programs or guaranteed hardship options, while also having shorter default periods, as your entire loan balance will become due immediately as you default on the loan, while federal student loans default after 270 days of nonpayment.
Alternatives to Getting a Private Student Loan
If you are currently unable to find a right private student loan offer, there are some potential alternatives that you can pursue instead. First of all, you can apply for scholarships and grants. You can find the available national scholarships in the U.S. News Scholarship Finder database.
Secondly, you can consider asking your college for a payment plan to spread out specific costs like campus housing and food over monthly installments. If the college does not offer monthly payment plans for housing, you can consider living at home, or transferring to a cheaper college. Getting a part-time job can also be a good option, as some employers will offer to help you pay for college in terms of tuition assistance and paid internships.
Can I Get a Student Loan Without a Co-signer?
Getting a private student loan without a co-signer can be difficult, as most lenders require a credit score of at least 670 to qualify for favorable interest rates. This level of credit worthiness is not easy to reach for undergraduates, so having a co-signer remains the best option for ensuring that you get the lowest rates possible.
Still, there are some private student loan lenders that consider your school performance and field of study instead of your credit history, making it possible to get a good loan and an interest rate reduction offer even without a cosigner.
How to Get Private Student Loans for Bad Credit
Private student loans are generally not a good option for bad-credit borrowers when compared to federal student loans which have standardizer interest rates. If you have subpar credit history, getting a private student loan without a creditworthy cosigner will usually leave you with much higher rates, in which case we recommend that you prioritize and exhaust all of your federal student loan options before considering a private loan.
How We Evaluate Private Student Loans
Student loans are pretty much par for the course when applying for college, and there are many ways to get one. Government agencies, colleges, non-profits, banks, online lenders - the list of sources is quite long.
Federal loans are commonly used as financial aid because they offer more benefits than private student loans - they won’t be based on your credit, and the interest rates are fixed. With federal loans, you can also hope for loan forgiveness and count on payments customized to fit your income. Without a required credit check, you just submit your federal loan application through FAFSA.
However, if you don’t qualify for federal aid or need more money after you’ve maxed out what you already borrowed, comparing student loans from online lenders and banks is probably your next step. Still, getting a private loan is a bit more complicated than getting one that’s government-issued and regulated. For starters, your creditworthiness enters the picture.
Each lender presents a set of eligibility criteria that potential credit-based loan student must meet before applying for a loan. And you should have your own set too - for example, can you get a forbearance period? Can you postpone loan repayment? If yes, for how long? Can you apply for a loan independently, or do you need a cosigner?
It might seem overwhelming, but having all these questions in mind will help you immensely when shopping for the best private student loan.
We followed the same principles while conducting our evaluation and outlined the methodology for finding the prime private loan candidates by the following categories:
Private Student Loan Types
As you may have guessed, you can’t just get any loan to cover your university expenses. Undergraduate loans tend to require a cosigner as a sort of guarantee, but depending on your income and credit score, you might be able to get one on your own. Graduate loans - loans for MBAs, master’s, and doctoral degrees - usually include higher borrowing amounts and extended repayment periods. Specialized offers for future health and legal professionals are relatively common as well.
Deciding between a cosigned or an independent loan is your first step. Generally, the best college loan options require a cosigner, especially for undergraduate students. After all, these young borrowers usually have neither a credit score nor a stable income. A cosigner - with their own score and salary - serves as a guarantee the loan will be paid off.
Loan options without a cosigner are rare, but if you’re a student who already has a good credit score and meets the lender’s income requirements, you might qualify for an independent loan.
Loan Terms for Private Student Loan Offers
Loan terms are the next thing to check out before applying. Each lender has a maximum borrowing amount to give, and it differs based on your loan type. Most top student loan companies have a minimum borrowing amount of $1,000 and a maximum that covers the cost of attendance for undergraduate loans.
Interest rates are crucial when choosing a loan. There are two types of rates: fixed and variable. With fixed-rate loans, your monthly annual percentage rate (APR) will stay the same the entire repayment period. Variable-rate loans depend on market changes, and your interest rates will rise and fall accordingly. Getting the lowest APRs possible will require the shortest loan terms and interest-only payments, as these rates are available only to the most creditworthy applicants.
Term Length
Private lender and bank term lengths for student loan repayment usually include several options: 5, 7, 10, or 15 years. Our private student loan comparison includes lenders that offer even more than that. Term length will influence other loan characteristics, too. For instance, if you choose a 15-year repayment period, you’ll have low monthly payments, but the overall costs and the interest rate will be higher than with shorter terms.
Repayment Options Available to Students
Most lenders offer the same four most common repayment options:
Full in-school repayment. Repay your principal and interest rate right away, resulting in low overall costs but high monthly payments.
Interest-only in-school repayment. Start repaying interest rates while you are still in school.
Flat payments. Almost every best private loan for students offers fixed low in-school flat rates, typically $25 each month.
Deferred payment. This offer will cost you the most, but you won’t need to pay off your loan while you’re in school.
Grace period. A grace period is a time after you finish school during which you don’t need to repay your loan. The standard grace period is six months for undergraduate student loans and nine months for graduate loans. However, some lenders offer even longer grace periods.
Deferment and forbearance options. Deferment and forbearance allow you to postpone your loan repayment temporarily. Not all top student loans include this in their offer, so read each lender’s terms and conditions thoroughly before applying. You can defer your loan payments due to military or public service. In-school deferment is possible for those enrolled at least part-time in a school program. On the other hand, if you’re facing financial hardship, you might be eligible for loan forbearance.
The two options for postponing your payments differ in terms of interest rate management: Deferment means that your interest rate will not accrue on your balance. Forbearance accrues interest while you don’t make payments.
Loan Requirements
Regardless of how good a loan offer might seem, it won’t be of any use to you if you’re not eligible for it. The top private student loans have different criteria potential borrowers must meet, and if you have a cosigner, they have to meet them too.
These standards include a minimum credit score, minimal annual income, and debt-to-income ratio.
Lenders might also check whether you have unpaid debts or outstanding credit card balances. But before all that, you need to be of legal age for a loan and fulfill any residence requirements. Only a US resident can apply for an independent loan; if you have a cosigner, they need to have US citizenship.
Application Process
All lenders allow for online applications. You start by filling in the website form. Then your chosen lender for a private student loan reviews your application and sends you an offer. If you decide to go with them, you need to upload and submit the required documentation.
Getting a prequalification check is possible with many lenders. It’s the right solution for seeing whether you qualify for a loan without harming your credit score.
Additional Features
Sometimes lenders incorporate various discounts on your monthly rates and rewards programs for excellent students to their offers. You must meet specific criteria to earn rewards, but it’s worth checking with your lender to see if you can qualify for these programs.
Unlike federal loans, private loans don’t have a forgiveness program. Some lenders will go on charging monthly payments even if a borrower dies.
Further Reading
FAQ
Which private student loan is best?
Many student loan lenders offer private student loans; which one is best depends on your needs. Our reviews of the best private student loans can help you make this decision and find the right offer faster.
How do I choose a private student loan?
Unlike federal loans that you can apply for via the Free Application for Federal Student Aid (FAFSA), picking a private student loan requires more engagement. Student loan providers have different loan requirements and offer various repayment options. It’s crucial to get correct information about each lender before applying.
What credit score do you need for private student loans?
It depends on the lender, but a credit score in the mid 600s is usually required.
Are private student loans risky?
Private student loans come with certain restrictions, have fewer borrower protections and oftentimes incur higher interest rates, so they can be considered riskier than federal student loans.
Can I get private student loans with bad credit?
A private student loan requires a minimum credit criteria from a borrower or their cosigner. The best private student loan products are also available for people with low credit scores, but they need to have a trustworthy cosigner in most cases.
Is it a good idea to get a private student loan?
It is recommended that you first explore the federal student loan options before seeking out a private student loan, as federal loans come with a fixed interest rate, and certain borrower protections and forgiveness programs that aren’t available from private lenders.