Banks that offer student loans
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When you need student loans to help pay for college, there are plenty of options available. While it’s best to start with federal student loans, there are limits on how much you can borrow each year and in total; if you’ve maxed out your allotment, you may turn to private student loans to help you bridge the gap.
Many national banks offer student loans with low interest rates and customizable terms. Here’s where to start your search.
Best banks for student loans
It’s always a good idea to shop around and compare loan offers from multiple lenders before you submit an application. This list below can help you narrow down your list of options.
Citizens Bank has branches in only 14 states, but it offers private student loans nationwide. The bank offers loans for undergraduate and graduate students, as well as for parents who are hoping to help their child get through school. Loan terms range from five to 15 years for students and five to 10 years for parents.
The lender has both variable and fixed interest rates and offers a 0.25 percent interest rate loyalty discount to existing customers — that includes your co-signer if you have one — with a checking account, savings account, money market account, certificate of deposit, auto loan, home equity loan, home equity line of credit, mortgage, credit card account or other student loan owned by Citizens Bank. The bank also offers a 0.25 percent interest rate discount for automatic payments.
Citizens Bank also offers the chance to get multiyear approval. With this feature, you undergo a hard inquiry once for multiple years’ worth of student loan needs. When you request future disbursements, you’ll undergo just a soft credit check, saving the hassle of applying every year.
Discover is an online bank that has only one physical branch. The bank offers a wide variety of private student loans, including undergraduate loans, graduate loans, MBA loans, health professions loans, law loans, residency loans, bar exam loans and parent loans. Loan terms are 15 years for undergraduate loans and 20 years for graduate loans.
The lender offers both variable and fixed interest rates, with the chance to get two discounts on your rate. The first is a 0.35 percent discount if you opt to make interest-only payments while you’re in school and during grace periods. The second is a 0.25 percent discount you’ll get if you set up automatic payments from a checking or savings account.
To sweeten the pot even more, Discover offers cash rewards for good grades. You can get a reward of 1 percent of your disbursed loan balance if your GPA for the term covered by the loan is 3.0 or higher. And if you’re an incoming freshman, you can get a 1 percent cash reward on your first loan from the bank if your high school GPA was 3.0 or higher.
Education Loan Finance
Education Loan Finance, or ELFI, is the online student loan division of SouthEast Bank, which is located in Tennessee. The lender offers loans to undergraduate students, graduate students and parents. Repayment terms range from five to 15 years for students and five to 10 years for parents.
What sets ELFI apart from other lenders is that you’ll get assigned a student loan advisor who will help you throughout the process. However, ELFI doesn’t offer an autopay discount like other banks, saying that it doesn’t require you to do anything extra to get its best rates.
PNC Bank, which is based in Pennsylvania, offers private student loans to undergraduate and graduate students. It also offers specialized loans for health and medical professions, health professions residency and bar study.
The lender offers both fixed and variable interest rates. Like some other banks, PNC offers an interest rate discount, but it’s double the standard discount at 0.5 percent. Repayment terms on PNC Bank private student loans range from five to 15 years.
One way PNC is unique is that it offers a $2,000 scholarship twice a year, and you don’t even need to have a PNC student loan to qualify. Once you enter and meet the eligibility requirements, you’ll be eligible for two drawings over the following 12 months.
Sallie Mae is another online bank that doesn’t have any brick-and-mortar branches. The bank offers undergraduate loans, graduate loans and career training loans.
Graduate loan options are broken down into MBA loans, medical school loans, medical residency loans, dental school loans, dental residency loans, health professions loans, law school loans and bar study loans. Repayment terms range from five to 20 years.
The bank offers both fixed and variable interest rates, with the chance to get a 0.25 percent discount if you set up automatic payments. Sallie Mae can be an excellent choice for part-time students because, unlike most student loan companies, it doesn’t require you to attend school at least half time to get approved.
Do banks offer student loans without a co-signer?
It can be challenging for college students to get approved for a private student loan without a co-signer, especially if you have little to no income and credit history.
Banks are no different than other lenders in this regard, so if you’re planning to apply for a private student loan, consider asking a parent to co-sign the loan application to improve your odds of getting approved and qualifying for a reasonable interest rate.
With that said, if you do have some credit history to your name, you can likely find a bank that will accept your loan application without a co-signer. This is particularly true for graduate school loans.
Student loans from banks vs. online lenders
For the most part, banks offering student loans are relatively similar to online lenders. While each bank has its own unique features, there’s not a huge difference between the two types of lenders.
That said, some of the best banks for student loans offer loyalty discounts to their existing customers. This can come in handy if you or your co-signer has an eligible account with a bank that offers private student loans. A bank could also be a good option if you prefer in-person customer support and there’s a branch near you.
Before you apply for any loan, it’s critical that you take the time to shop around and compare interest rates, repayment terms and other features with several lenders to make sure that you get the best deal for you.
How to apply for a student loan with a bank
The application process for private student loans with a bank doesn’t differ much from that of other lenders. Here’s what to expect:
- Shop around: Even if your bank is offering a loyalty discount, shop around and compare rate quotes from multiple banks, credit unions and online lenders to determine which one can give you the best deal. In addition to rates, you may also want to compare repayment plans, co-signer release options, forbearance and deferment plans and other features that are important to you.
- Apply directly with the lender: Once you’ve decided which bank you want to apply with, you can typically apply directly through the bank’s website. Some may also allow you to apply by phone or in person, but an online application is the quickest option. You’ll typically need to provide information about yourself, your school, how much you want to borrow and other relevant details.
- Provide documentation: The bank may ask for documentation for your income, a government-issued ID and other relevant information about your application. The faster you share your documents, the more quickly the underwriting process will go.
- Agree to the final offer: Once the lender has done a complete review of your credit history and other aspects of your application, you’ll receive a final offer, which may or may not be the same offer you received when you first requested a quote. If you agree to the terms, read the loan agreement and other documents the lender provides and sign them electronically.
- Wait for disbursement: Private student loans are typically disbursed first to your school to cover tuition, fees and other relevant expenses. If there’s money left over, you should receive it directly. At that point, you can use your loan funds to cover other eligible educational expenses.
Also, make sure you know when payments start. If you’re a student, you can typically wait until after you leave school to begin your payments. But if you’re a parent taking out loans to help your child through school, payments may begin immediately. Contact your lender if you have any questions.