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Best private student loans in July 2024

Jul 10, 2024
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Federal student loans are almost always a better first choice than private student loans, but they have borrowing limits and qualification requirements. When federal loans aren't enough, private student loans can cover tuition, room and board, fees and other costs of higher education once you've reached your federal limit. Private student loans can be useful for:

  • Borrowers who don't qualify for federal aid, including international students.
  • Borrowers who have reached their federal student loan limits.
  • Borrowers who would like the flexibility of a variable interest rate.
  • Borrowers with great credit scores.

Bankrate's ranking of the best private student loans weighs interest rates, loan types, terms, fees and unique features to give you a starting point in your search for college funding. The resources below can also help you decide whether a private loan is right for you and find the best interest rate for your situation.

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STUDENT LOAN

Ascent: Best for borrower incentives

4.3

Fixed APR from
3.79- 15.41%
Loan term
5-20 yrs
Loan amount
$2k- $400K
See offersArrow Right

Check rate with Credible

STUDENT LOAN

College Ave: Best for international students

4.4

Fixed APR from
4.22- 17.99%
Loan term
5-15 yrs
Loan amount
$1k- $300K
See offersArrow Right

Apply on partner site

STUDENT LOAN

Citizens Bank: Best for existing Citizens Bank customers

4.0

Fixed APR from
4.24- 15.61%
Loan term
5-15 yrs
Loan amount
$1k- $350K
See offersArrow Right

Check rate on Credible

STUDENT LOAN

Sallie Mae: Best for part-time students

4.6

Fixed APR from
4.25- 15.49%
Loan term
10-15 yrs
Loan amount
$1k- $500K
See offersArrow Right

Apply on partner site

STUDENT LOAN

Custom Choice: Best for graduation rewards

4.1

Fixed APR from
4.43- 14.04%
Loan term
7-15 yrs
Loan amount
$1k- $180K
See offersArrow Right

Check rate on Credible

STUDENT LOAN

Education Loan Finance: Best for customer service

4.2

Fixed APR from
4.50- 14.22%
Loan term
5-15 yrs
Loan amount
$1k- $500K
See offersArrow Right

Apply on partner site

STUDENT LOAN

INvested: Best for Indiana residents

Fixed APR from
4.56- 8.34%
Loan term
5-15 yrs
Loan amount
$1k- $500K
See offersArrow Right

Check rate on Credible

STUDENT LOAN

Mefa: Best for low rates

Fixed APR from
5.75- 8.95%
Loan term
10-15 yrs
Loan amount
$1.5k- $500K
See offersArrow Right

Check rate on Credible

STUDENT LOAN

Earnest: Best for applying without a co-signer

4.5

Fixed APR from
4.17- 16.49%
Loan term
5-15 yrs
Loan amount
$1k- $500K

STUDENT LOAN

SoFi: Best for online borrower resources

4.7

Fixed APR from
4.19- 14.83%
Loan term
5-20 yrs
Loan amount
$1k- $500K
Lender conversion and compensation impacts how, where and in what order products appear in the above table

Compare top private student loan lenders

LENDER BEST FOR MIN. CREDIT SCORE APR MIN. LOAN AMOUNT MAX LOAN AMOUNT
Ascent Borrower incentives Not specified 6.17%-15.23% variable; 4.13%-14.74% fixed (with autopay) $2,001 $200,000
College Ave International students Not specified 5.59%-17.99% variable; 4.22%-17.99% fixed $1,000 100% total cost of attendance ($150,000 for some degrees)
Citizens Bank Existing Citizens Bank customers Not specified 5.97%-16.47% variable; 4.39%-15.46% fixed $1,000 Up to $350,000, depending on degree
Sallie Mae Part-time students Not specified 5.37%-15.70% variable; 4.25%-15.49% fixed $1,000 100% total cost of attendance
Custom Choice Graduation rewards Not specified 5.38% - 15.56% variable; 4.43% - 14.04% fixed (with autopay) $1,000 $99,999 annually; $180,000 aggregate
Education Loan Finance Customer service 680 6.00%-14.22% variable; 4.50-14.22% fixed $1,000 100% total cost of attendance
INvestED Indiana residents 670 3.45%-7.21% variable; 4.38%-8.23% fixed (with autopay) $1,001 100% total cost of attendance
MEFA Low maximum APR Not specified 5.75%-8.95% fixed $1,500 100% total cost of attendance
Earnest Applying without a co-signer 650 5.87%-18.51% variable; 4.54%-16.74% fixed $1,000 100% total cost of attendance
SoFi Online borrower resources Not specified 5.74%-14.83% variable; 4.19%-14.83% fixed $1,000 100% total cost of attendance

Loan details presented in the table above are current as of June 15, 2024. Check the lenders’ websites for more current information. The student loan lenders listed here are selected based on factors such as APR, loan amounts, fees, credit requirements and more.

A closer look at Bankrate's top picks for private student loans 

Use each lender's deep-dive to help you better understand the loan product, who it's best for and how to qualify.

Ascent: Best for borrower incentives

Ascent
Rating: 4.3 stars out of 5
4.3

Overview: Ascent offers the most comprehensive incentive programs out of the lenders we reviewed. Borrowers who qualify can take advantage of the automatic payment discount, a one percent cash back graduation benefit, a reward of up to $525 per referral and one-on-one coaching through its student success program.

Fixed APR
3.79%–15.41%
Loan amount
$2k– $400k
Loan term
5-20 yrs

College Ave: Best for international students

College Ave
Rating: 4.4 stars out of 5
4.4

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.

Fixed APR
4.22%–17.99%
Loan amount
$1,000– $500,000
Loan term
5-15 yrs

Citizens Bank: Best for existing Citizens Bank customers

Citizens
Rating: 4 stars out of 5
4

Overview: While most of the lenders we review only have an online presence, Citizens Bank has nearly 2,000 locations across the country. As the oldest institution on our list, Citizens Bank has garnered a solid reputation over the years as a reliable and staright-forward lending option.

Fixed APR
4.24%–15.61%
Loan amount
$1k– $350k
Loan term
5-15 yrs

Sallie Mae: Best for part-time students

Sallie Mae
Rating: 4.6 stars out of 5
4.6

Overview: Sallie Mae is among the most well-known student loan lenders on our list and was originally founded in 1973. Unlike other lenders, Sallie Mae doesn't require its applicants to be full-time students, regardless of the degree program or loan type.

Fixed APR
4.25%–15.49%
Loan amount
$1,000-$500,000
Loan term
10-15 yrs

Custom Choice: Best for graduation rewards

Custom Choice
Rating: 4.1 stars out of 5
4.1

Overview: While most lenders offer interest rate reductions, Custom Choice's Grad Reward takes 2 percent off your principal balance after you graduate. Plus, it's one of the only companies that doesn't require applicants to meet the SAP requirements set by their school.

Fixed APR
4.43%–14.04%
Loan amount
$1,000 to $99,999
Loan term
7-15 yrs

Education Loan Finance: Best for customer service

Education Loan Finance
Rating: 4.2 stars out of 5
4.2

Overview: Education Loan Finance, Inc. is a nonprofit organization that values a personal relationship with its borrowers, having provided over $20 million in scholarships. The company is known for its financial literacy high school program and recently awarded a customer $50,000 to help a customer and his family pay off their loans.

Fixed APR
4.50%–14.22%
Loan amount
$1k– $500k
Loan term
5-15 yrs

INvestED: Best for Indiana residents

Invested

Overview: Functioning as a financial resource, INvestED is an online lender that offers residents of Indiana — and those attending an in-state school — a competitive student loan option. It's also one of the most engaged lenders out of the ones we've reviewed. It has an events calendar and attends over 700 events annually across the state.

Fixed APR
4.56%–8.34%
Loan amount
$1k– $500k
Loan term
5-15 yrs

MEFA: Best for low maximum APR

mefa

Overview: While MEFA's fixed-rate APR rnaximum is technically the second lowest on our list, it is lowest for a lender that caters to borrowers across the country. Unlike some, MEFA doesn't have any state restrictions on its loans — borrowers just need to attend an eligible U.S. nonprofit college or university.

Fixed APR
5.75%–8.95%
Loan amount
$1.5k– $500k
Loan term
10-15 yrs

Earnest: Best for applying without a co-signer

Earnest
Rating: 4.5 stars out of 5
4.5

Overview: Earnest is a well-known online lender that offers a variety of repayment terms and programs, which isn't a given with every student loan lender. Among its options are an extended term program, a deferment or forbearance option, loan forgiveness and discharge and a hardship rate reduction program.

Fixed APR
4.17%–16.49%
Loan amount
$1k– $500k
Loan term
5-15 yrs

SoFi: Best for online borrower resources

SoFi
Rating: 4.7 stars out of 5
4.7

Overview: SoFi is one of the most recognizable online lenders in the student loans space, and for a good reason. It's best known for its member benefits and perks, including exclusive access to the SoFi stadium, a personalized reward and redemption program and a SoFi PLUS membership.

Fixed APR
4.19%–14.83%
Loan amount
$1k– $500k
Loan term
5-20 yrs

What is a private student loan?

A private student loan is a loan used to cover qualifying academic-related expenses. You can take out private student loans through banks, online lenders, 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.

How private student loans work

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. Because undergraduates usually don’t have extensive credit histories, they typically need a co-signer to take out a private student loan. 

Some lenders specialize in student loans without a co-signer for undergraduates. To determine your eligibility and rate, they may evaluate your performance in school, earning potential, work history and more.

Unlike other types of loans, you likely won't receive the funds. Instead, they'll be sent to your school or college. From there, you can use the money for academic-related expenses, like technology, room and board and tuition. 

Types of private student loans 

Just about any type of student can apply for a private student loan, from undergraduates to graduate students seeking medical, business, 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 thin credit or a less robust financial history, although student loans for bad credit might be more expensive.

Pros and cons of private student loans 

Before applying for a private student loan, consider the benefits and drawbacks of this type of financing.

Pros

  • High borrowing limits: Private loans will often have higher borrowing limits than federal loans, with some covering up to the full cost of enrollment.
  • Low interest rates: Borrowers with good credit could qualify for lower interest rates than federal student loans offer.
  • Flexible enrollment requirements: Federal student loans require you to be enrolled at least half time to qualify, but some private lenders offer loans for borrowers taking only a few classes or attending summer school.
  • Choice between fixed and variable rates: You can customize your repayment by choosing either a fixed interest rate or a variable interest rate.

Cons

  • No federal protections or benefits: Federal student loans come with benefits like standardized forbearance and income-driven repayment plans. Private lenders have fewer of these options available.
  • Average credit required: While most federal student loans don't check your credit, you will likely need a credit score in the mid-600s to qualify for a private student loan.
  • High rates for borrowers with poor credit: The lower your credit score, the higher your interest rates with private student loans. If you have a credit score near the lender's minimum requirement, your interest rate could be in the double digits.

Private vs. federal student loans 

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? 5.50% for undergraduates, 7.05% or 8.05% for graduates; all fixed rates 4.49% to 16.99%; 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 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

Current private student loan interest rates 

Currently, private student loan interest rates sit anywhere between 4 percent and can range all the way up to 18 percent. 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. Borrowers who prefer predictable payments may prefer fixed rates, 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 or SOFR. These rates may go up or down during repayment, although lenders usually limit how high the rate can go.

Every month, your bill includes part of 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.

Getting a private student loan

Here's what you can expect from most private student loan applications: 

  1. Prequalify: Most lenders offer prequalification before officially applying. This allows you to see your predicted eligibility odds and potential loan terms, without impacting your credit score. It's recommended that you prequalify with at least two lenders to get an idea of what a competitive rate looks like for your credit situation before you choose a lender.
  2. Apply: Online lenders offer fully online applications, while some banks or credit unions offer in person assistance at a physical location. If you come across a question while filling out the application, look up the lender's customer service phone number or email to receive customized assistance. 
  3. Accept the loan terms: Once you're approved, your lender will communicate with your school to verify the cost of attendance. This certification process may take a few weeks. At that point, funds will be disbursed to your school for tuition and fees and any remaining amount will be sent to you personally. 

Repaying a private student loan 

Generally, you don't need to worry about repaying your student loan until after your grace period. A standard grace period is six months after you graduate or drop below half-time enrollment, but it may be longer with some private lenders. At that point, you'll be responsible for paying back the principal and interest.

With many private companies, you have the option of selecting a payment plan while you're in school to decrease how much interest accumulates. Once your funds are disbursed, you may have the option to make interest-only payments or a small flat monthly payment. You may also have the opportunity to refinance your private student loan to help manage your payments.

Alternatives to student loans 

Before jumping into a student loan to cover the costs associated with a degree, consider options that can help reduce the overall cost. Grants and scholarships are two of the most common alternatives, but unlike loans, they don't need to be repaid. 

Federal need-based financial aid should also be explored before looking at private loans. Borrowers can apply for government-sponsored grants and programs — like work-study — through the Free Application for Federal Student Aid (FAFSA). 

FAQ about private student loans

How we chose the best private student loan providers 

Bankrate's trusted personal loans industry expertise

57

years in business

25

lenders reviewed

14

loan features weighed

350

data points collected

To find the best private student loan lenders, Bankrate's team of experts evaluated over 20 lenders. Each lender was then rated on a 14-point scale. The scale is split into three main categories:

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.