Best private student loans in June 2022

The Bankrate guide to choosing the best private student loans

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When shopping for a student loan, look for a competitive interest rate, flexible repayment terms that meet your needs, generous hardship options and minimal fees. Loan details presented here are current as of Jan. 28, 2022. Check the lenders’ websites for more current information. The top lenders listed below are selected based on factors such as APR, loan amounts, fees, credit requirements and broad availability. To learn more about how we chose lenders, read our methodology above.

Compare private student loan interest rates in June 2022

LENDER BEST FOR MIN. CREDIT SCORE APR MIN. LOAN AMOUNT MAX LOAN AMOUNT
College Ave International students Not specified Variable: 1.19%–11.98% (with autopay); Fixed: 3.49%–12.99% (with autopay) $1,000 100% total cost of attendance ($150,000 for some degrees)
Custom Choice Graduation rewards Not specified Variable: 1.03%–9.67% (with autopay); Fixed: 3.2%–10.77% (with autopay) $1,000 $99,999 annually; $180,000 cumulative
Discover Academic achievement bonus Not specified See rates at DiscoverStudentLoans.com/Rates $1,000 100% total cost of attendance
Earnest Applying without a co-signer 650 Variable: 0.94%–11.44% (with autopay); Fixed: 3.24%–12.78% (with autopay) $1,000 100% total cost of attendance
Sallie Mae Part-time students Not specified Variable: 1.62%–11.73% (with autopay); Fixed: 3.75%–12.85% (with autopay) $1,000 100% total cost of attendance
SoFi Online borrower resources Not specified Variable: 1.89%–11.92% (with autopay); Fixed: 3.47%–11.16% (with autopay) $5,000 100% total cost of attendance

Best private student loans in June 2022

BEST FOR INTERNATIONAL STUDENTS

College Ave

4.4

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Apply on partner site

Min. credit score:Not disclosed

Fixed APR From:3.49%

Loan amount:$1,000–$500,000

Term lengths:5 to 15 years

Min. annual income:$35,000

Overview: College Ave offers private loans for students seeking undergraduate, graduate, dental, law, medical and business degrees. Parents can also take out loans on behalf of their college-bound kids, and students interested in attending community college or receiving career training may also apply.

Why College Ave is best for international students: College Ave is one of the only lenders that has loans available for international students attending school in the U.S. As long as students have a qualified co-signer who is a U.S. citizen, they may be eligible for a private loan from College Ave.

  • Pros & Cons

  • Eligibility & More

BEST FOR APPLYING WITHOUT A CO-SIGNER

Earnest

4.6

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Apply on partner site

Min. credit score:650

Fixed APR From:3.24%

Loan amount:$1,000–$350,000

Term lengths:5 to 20 years

Min. annual income:$35,000

Overview: Earnest offers private student loans for students seeking undergraduate, graduate, business, law and medical degrees. Borrowers may qualify on their own or use a co-signer.

Why Earnest is best for applying without a co-signer: Earnest does not require undergraduate students to have a co-signer, which is rare among private lenders. You will need to meet financial and credit requirements, but Earnest is a good option for students who can qualify for a loan on their own – especially since it doesn’t offer co-signer release.

  • Pros & Cons

  • Eligibility & More

BEST FOR PART-TIME STUDENTS

Sallie Mae

4.3

See offers 

Apply on partner site

Min. credit score:Not disclosed

Fixed APR From:3.75%

Loan amount:$1,000–$500,000

Term lengths:10 to 15 years

Min. annual income:$0

Overview: Of all the lenders on this list, Sallie Mae offers the most extensive menu of private student loan options. There are loans for students seeking undergraduate, graduate, medical, dental and law degrees, plus career-training loans.

Why Sallie Mae is best for part-time students: Most lenders require students to attend their program at least half time. Sallie Mae broadens its eligibility requirements, so even students attending less than half time or looking to fund a study abroad program may get a student loan from Sallie Mae.

  • Pros & Cons

  • Eligibility & More

BEST FOR ONLINE BORROWER RESOURCES

SoFi

4.6

See offers 

Apply on partner site

Min. credit score:Not disclosed

Fixed APR From:3.47% –11.16%

Loan amount:$5,000–$500,000

Term lengths:5 to 15 years

Min. annual income:$0

Overview: SoFi offers undergraduate student loans, law school loans, medical school loans, MBA loans and parent loans, plus other financial products such as personal loans and mortgages.

Why SoFi is best for online borrower resources: SoFi goes beyond simply providing student loans; it also offers a mobile app, financial planning advice, unemployment protection and more.

  • Pros & Cons

  • Eligibility & More

What is a private student loan and how does it work?

A private student loan is a loan used to cover qualifying educational expenses. You can take out private student loans through banks, online lenders and credit unions, and sometimes through colleges and state agencies. These usually have higher borrowing limits than federal student loans and may offer lower interest rates for borrowers with good credit, but they come with fewer borrower protections.

To qualify, you’ll need to meet the lender’s eligibility requirements and go through a credit check. Applicants with good or excellent credit tend to get the lowest interest rates. But because undergraduates usually don’t have extensive credit histories, they typically need a co-signer to take out a private student loan.

What can private student loans be used for?

While the restrictions vary by lender, generally you can use private student loans for:

  • Tuition.
  • Fees.
  • Room and board.
  • Books and supplies.
  • Transportation.
  • Child care.

Typically you cannot use student loans for:

  • Clothes.
  • Vacations.
  • Restaurant dining.
  • Business expenses.
  • Car or home purchases.

How to get a private student loan

While every lender has its own application process, there are a few general steps you’ll need to take to get a private student loan:

    1. Check your credit score. Some lenders will list credit score requirements on their websites, but even if they don’t, it’s safe to assume that you’ll need a credit score in the mid-600s to qualify for a student loan.
    2. Enlist a co-signer if needed. If you don’t have much credit history or if your credit score is poor, you may need to get a co-signer. This person — usually a parent or family member — signs onto your loan with you in order to help you get approved.
    3. Get prequalified. The rates that lenders advertise aren’t necessarily the rates you’ll receive. By getting prequalified with a few lenders, you can compare true offers to see which loan is best for your needs.
    4. Send in an application. Once you’ve chosen a lender, you’ll send in your full application, which will ask for details like your Social Security number, financial history and school information. You’ll also go through a hard credit check at this stage.
    5. Wait for verification. The lender will process your application and confirm your cost of attendance with your school. After a few weeks, the lender will typically disburse the funds directly to your school.

How does a private student loan differ from a federal student loan?

While private and federal student loans are both viable ways to pay for college, there are some differences to keep in mind:

Federal student loans Private student loans
Where do they come from? The U.S. Department of Education Banks, credit unions, online lenders
How much can you borrow? Up to $31,000 for dependent undergraduates, up to $57,500 for independent undergraduates, up to the full cost of attendance for graduates Varies by lender; often up to the full cost of attendance
What are the interest rates? 3.73% for undergraduates, 5.28% or 6.28% for graduates; all fixed rates 0.94% to 12.94%; may be fixed or variable
What are the benefits? Income-driven repayment plans, loan forgiveness options, extensive deferment and forbearance Low interest rates for borrowers with good credit, potential for discounts and rewards, larger loan amounts
What are the drawbacks? Limited loan amounts for undergraduates, only one interest rate option Credit check required, high interest rates for borrowers with poor credit

How do student loan interest rates work?

Most private student loans offer two types of interest rates: variable and fixed. With a fixed interest rate, the rate doesn’t change throughout the life of the loan. This is a good option for borrowers who prefer predictable payments, although the rates usually start a little higher. Variable rates, on the other hand, are tied to changes to an index, such as the Libor. These rates may go up or down over the course of repayment, although lenders usually limit how high the rate can go.

Every month, your payments will be comprised of both the principal — the base loan amount you borrowed — and interest charges. While your monthly payment will be the same if you have a fixed interest rate, more and more of each payment will go toward the principal and less toward interest with each successive month. You can use a student loan calculator to determine how different interest rates will affect your monthly payment over time.

Types of private student loans

Just about any type of student can apply for a private student loan, from undergraduates to students seeking medicalbusiness, dental and law degrees. Some lenders also offer private student loans for international students or people who are in a residency program, studying abroad, attending community college, enrolled in a career-training school or studying for the bar exam. There are even student loans for borrowers with poor credit, although these student loans for bad credit might be more expensive.

Pros and cons of private student loans

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