Best Private Student Loans of May 2022

Find out how you can get the right student loan to pay for your college expenses.

Advertising Disclosure: Some of the loan offers on this site are from companies who are advertising clients of U.S. News. Advertising considerations may impact where offers appear on the site but do not affect our editorial independence.

Whether your college plans involve heading to campus or logging on for online learning, one thing is certain: You will need a way to pay. Although federal student loans are often the most affordable way to borrow, they may not be enough to cover all of your college costs. Private student loans, as well as grants and work-study programs, can cover the gap between what you need and how much you can afford to pay toward your college expenses.

But be cautious about borrowing too much. "With so much uncertainty regarding college campuses and ... class schedules, planning for expenses is not an easy task," says Bruce McClary, vice president of marketing for the National Foundation for Credit Counseling and a U.S. News contributor.

This guide can help you navigate the school year. What you’ll learn here:

  • How do private student loans work?
  • What are the drawbacks of private student loans?
  • How can you choose the best private student loans?

Because each student has unique financial aid needs, no single lender is a good choice for everyone. These lenders are a good starting point for your private student loan research.

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Earnest

4.7

3.24% to 12.78% with autopay Fixed APR
No maximum Max. Loan Amount
650 Min. Credit Score

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College Ave

4.7

3.49% to 12.99% with autopay Fixed APR
Cost of attendance, minus aid Max. Loan Amount
Mid 600s Min. Credit Score

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Sallie Mae

4.6

3.75% to 12.85% with autopay Fixed APR
Cost of attendance, minus aid Max. Loan Amount
Mid 600s Min. Credit Score

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SoFi

4.5

3.47% to 11.16% with autopay Fixed APR
Cost of attendance, minus aid Max. Loan Amount
640 Min. Credit Score

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Ascent Funding

4.4

4.78% to 12.76% with autopay Fixed APR
$200,000 Max. Loan Amount
540 Min. Credit Score

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LendKey

4.1

3.99% to 8.49% with autopay Fixed APR
Cost of attendance, minus aid Max. Loan Amount
Not disclosed Min. Credit Score

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Citizens

4.5

3.48% to 11.34% with auto and loyalty discount* Fixed APR
Up to $350,000 Max. Loan Amount
Not disclosed Min. Credit Score

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PNC

3.9

As low as 2.99% with autopay* Fixed APR
$50,000 Max. Loan Amount
Not disclosed Min. Credit Score

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Purefy

4.5

3.26% to 14.50% with autopay Fixed APR
Not disclosed Max. Loan Amount
Not disclosed Min. Credit Score

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Sparrow Student Loans

4.7

2.99% to 14.98% with autopay Fixed APR
Cost of attendance, minus aid Max. Loan Amount
No minimum Min. Credit Score

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Lender
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3.24% to 12.78% with autopay Fixed APR
No maximum Max. Loan Amount
650 Min. Credit Score

View Disclosure

Lender
Learn More
3.49% to 12.99% with autopay Fixed APR
Cost of attendance, minus aid Max. Loan Amount
Mid 600s Min. Credit Score

View Disclosure

Lender
Learn More
3.75% to 12.85% with autopay Fixed APR
Cost of attendance, minus aid Max. Loan Amount
Mid 600s Min. Credit Score

View Disclosure

SoFi

4.5

Lender
Learn More
3.47% to 11.16% with autopay Fixed APR
Cost of attendance, minus aid Max. Loan Amount
640 Min. Credit Score

View Disclosure

Lender
Learn More
4.78% to 12.76% with autopay Fixed APR
$200,000 Max. Loan Amount
540 Min. Credit Score

View Disclosure

Lender
Learn More
3.99% to 8.49% with autopay Fixed APR
Cost of attendance, minus aid Max. Loan Amount
Not disclosed Min. Credit Score

View Disclosure

Lender
Learn More
3.48% to 11.34% with auto and loyalty discount* Fixed APR
Up to $350,000 Max. Loan Amount
Not disclosed Min. Credit Score

View Disclosure

PNC

3.9

Lender
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As low as 2.99% with autopay* Fixed APR
$50,000 Max. Loan Amount
Not disclosed Min. Credit Score

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Lender
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3.26% to 14.50% with autopay Fixed APR
Not disclosed Max. Loan Amount
Not disclosed Min. Credit Score

View Disclosure

Lender
Learn More
2.99% to 14.98% with autopay Fixed APR
Cost of attendance, minus aid Max. Loan Amount
No minimum Min. Credit Score

Lender

Learn More

Fixed APR

Max. Loan Amount

Min. Credit Score

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3.24% to 12.78% with autopayNo maximum650

View Disclosure

3.49% to 12.99% with autopayCost of attendance, minus aidMid 600s

View Disclosure

3.75% to 12.85% with autopayCost of attendance, minus aidMid 600s

View Disclosure

SoFi

4.5

3.47% to 11.16% with autopayCost of attendance, minus aid640

View Disclosure

4.78% to 12.76% with autopay$200,000540

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3.99% to 8.49% with autopayCost of attendance, minus aidNot disclosed

View Disclosure

3.48% to 11.34% with auto and loyalty discount*Up to $350,000Not disclosed

View Disclosure

PNC

3.9

As low as 2.99% with autopay*$50,000Not disclosed

View Disclosure

3.26% to 14.50% with autopayNot disclosedNot disclosed

View Disclosure

2.99% to 14.98% with autopayCost of attendance, minus aidNo minimum

U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.

To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. The scoring factors for private student loan providers are customer service ratings, fixed APR, variable APR, loan product availability, minimum and maximum loan terms, minimum and maximum loan amounts, minimum FICO score, and online features.

The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.

To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.

Find the Best Student Loans for You

Advertiser Disclosure

Earnest

4.7

U.S. News Star Rating

Earnest is an online lender offering private student loans to college and graduate students, as well as student loan refinancing. The company was founded in 2013. Borrowers can choose their own loan terms to fund up to the full cost of their education.

College Ave

4.7

U.S. News Star Rating

College Ave exclusively offers student loans. Founded in 2014 and based in Wilmington, Delaware, College Ave offers undergraduate, graduate and parent loans for students enrolled at schools affiliated with College Ave in all 50 states and the District of Columbia. College Ave’s advantage is speed, with applications that take a few minutes to complete and instant decisions.

Sallie Mae

4.6

U.S. News Star Rating

Sallie Mae is a publicly traded consumer bank that offers private student loans to pay for undergraduate, graduate and professional degrees, among other educational needs. Congress started Sallie Mae in 1972 as a government-sponsored entity that serviced student loans. The lender went private in 2004 and today provides a range of student loan products. Additionally, Sallie Mae Bank offers savings products and other tools to help families plan and pay for college, including a credit card that earns bonus cash back to help you pay off any student loan.

SoFi

4.5

U.S. News Star Rating

SoFi is an online lender founded by Stanford business school students in 2011. Originally focused on student loan refinancing, the company added private student loans in 2019. Its student loans for undergraduates, graduates and parents start at $5,000 and charge no fees.

Ascent Funding

4.4

U.S. News Star Rating

Ascent Funding is an online lender offering undergraduate and graduate student loans for those with or without a co-signer at more than 2,200 eligible schools nationwide. Students who are not U.S. citizens or permanent residents or those with Deferred Action for Childhood Arrivals status – aka "Dreamers" – may apply for an Ascent loan. Ascent Funding was founded in 2015 and is based in San Diego.

LendKey

4.1

U.S. News Star Rating

LendKey's digital platform connects borrowers who need private student loans or refinancing loans with credit unions and community banks. Since 2009, LendKey has helped more than 120,000 people by funding $4 billion in loans. The company offers fixed- and variable-rate loans for undergraduate and graduate students.

Citizens

4.5

U.S. News Star Rating

Citizens Bank was founded in the late 1800s in Rhode Island. Today, it's one of the largest commercial banks in the U.S. Branches are concentrated in the New England, mid-Atlantic and Midwest regions.

PNC

3.9

U.S. News Star Rating

PNC Bank offers loans in all 50 states for students at all stages of postsecondary education, including professional training loans and refinancing. The bank is also engaged in a number of community efforts, including financial literacy programs and PNC Grow Up Great, which supports early childhood education. For undergraduate students, PNC offers opportunities to win $2,000 scholarships toward education expenses.

Purefy

4.5

U.S. News Star Rating

Purefy is a student loan comparison site, and it also originates refinanced student loans and parent loans via a partnership with Pentagon Federal Credit Union. Purefy was founded in 2014, and began working with PenFed in 2016. Since then, the company has originated more than $1 billion in loans.

Sparrow Student Loans

4.7

U.S. News Star Rating

Sparrow is an online marketplace where students and parents can fill out a single application to see if they prequalify for loan offers from a variety of lenders. Though Sparrow is not a lender itself, potential borrowers can use the free service to see the rates for which they qualify. The company is based in New York City, and its lending partners issue loans in all 50 states and the District of Columbia. International students from countries that are not sanctioned by the Office of Foreign Assets Control also can use Sparrow’s services. Sparrow was founded in 2020.

Several top-scoring student loan companies in the U.S. News database recently increased their APRs.

Among student loan companies that earned a U.S. News score of 4.5 stars or more, four out of six increased their minimum fixed APR since January. Two out of six increased their maximum fixed APR.

It's important to shop around to get the best rate possible. Good credit also can help you secure a more competitive rate, so make sure you pay your bills on time and keep your credit card balances low.


U.S. News Survey

U.S. News Survey: Three-Quarters of Student Loan Holders Believe Federal Loans Should Be Canceled Completely

People are suffering under the weight of their student loan debt, a new U.S. News survey found, and they're looking for the federal government to do something about it. In the survey of student loan holders, 76.3% say their student loan debt is negatively affecting their mental health. An even larger 86.2% of respondents are resentful of the amount of student loan debt they are carrying. An overwhelming 76.6% of respondents say federal student loans should be canceled (13.4% say they shouldn’t be, and 10% don't know).

In addition to the mental stress, carrying student loan debt has practical effects on the borrowers. Only 20.2% of respondents have not had to postpone a major life goal (like getting married, having children, buying a house or saving for retirement) because of their student loan debt. For 62.8% of respondents, having student loans affected their ability to take out new loans or access credit.

Additional Survey Insights

During the federal student loan repayment freeze, only 19.6% of respondents kept paying their student loans. Most (43.5%) used the money for everyday expenses and bills.

More than one-third of respondents (36.7%) say they won't be able to go back to making their student loan payments if the federal freeze ends as it's scheduled on Sept. 1.

There are a variety of federal or private plans to help borrowers pay their loans, but 40.9% of respondents don't participate in a repayment or forgiveness program.

Student loan debt isn't the only source of debt for these respondents – only 17% say they aren't carrying additional debt like credit card debt, medical debt, personal loans, car loans or a mortgage.

Even though it takes some people decades to pay off their student loans, 57.3% of respondents say they didn't receive any financial counseling or guidance before they took them out.

Student loans put financial burdens on borrowers as soon as they've graduated. While 16.9% of respondents say their loans had a large impact on how they picked their college major or first job, 37.3% say the loans didn't have any bearing at all.

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  • During the federal student loan repayment freeze, only 19.6% of respondents kept paying their student loans. Most (43.5%) used the money for everyday expenses and bills.

  • More than one-third of respondents (36.7%) say they won't be able to go back to making their student loan payments if the federal freeze ends as it's scheduled on Sept. 1.

  • There are a variety of federal or private plans to help borrowers pay their loans, but 40.9% of respondents don't participate in a repayment or forgiveness program.

  • Student loan debt isn't the only source of debt for these respondents – only 17% say they aren't carrying additional debt like credit card debt, medical debt, personal loans, car loans or a mortgage.

  • Even though it takes some people decades to pay off their student loans, 57.3% of respondents say they didn't receive any financial counseling or guidance before they took them out.

  • Student loans put financial burdens on borrowers as soon as they've graduated. While 16.9% of respondents say their loans had a large impact on how they picked their college major or first job, 37.3% say the loans didn't have any bearing at all.

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U.S. News Survey Methodology

  • U.S. News ran a nationwide survey of 1,214 respondents through PureSpectrum between April 22 and April 28, 2022. Only people who currently have student loans answered questions.
  • The survey sample drew from the general American population, and the survey was configured to be representative of this sample.
  • The survey asked 15 questions relating to student loans.

Survey Results

Before you consider private student loans, try to make the most of federal and free financial aid, including private scholarships.

You may be eligible for federal Direct Unsubsidized Loans, but there are limits on how much you can borrow each academic year and overall. Limits range from $5,500 for dependent undergraduate students to $20,500 for graduate or professional students.

"Your first step in financing your education is to submit a Free Application for Federal Student Aid, commonly called a FAFSA," says Jay S. Fleischman, a lawyer who advises student loan borrowers on effective repayment strategies.

Even if you don't think you'll need financial assistance, or think you won't qualify, submit a FAFSA, which is the key to most financial aid.

It's a requirement for the student financial assistance programs authorized under Title IV of the Higher Education Act, including federal loans, grants and work-study programs. These do not have income or GPA cutoffs, which are common myths.

Although it's primarily used for federal aid, the FAFSA is often necessary for other forms of assistance. "Many states and colleges use your FAFSA information to determine your eligibility for state and school aid," Fleischman says.

Unlike federal student loans, private student loans do not offer standard options and interest rates. Your credit, and that of a co-signer if you have one, will affect what types of loans you qualify for and the student loan interest rate you'll receive.

Private lenders may offer different types of loans depending on the degree you're pursuing. The loan type can affect your loan amount, interest rate and repayment terms.

  • Community college or technical training. Some lenders provide loans to students who are pursuing two-year degrees, attending nontraditional schools or going to career-training programs.
  • Undergraduate school loans. You can take out undergraduate loans to pay for expenses while you pursue a bachelor's degree. Undergraduate loans may have lower interest rates and higher loan limits than community college loans.
  • Graduate or professional school loans.Graduate school loans tend to have higher maximum loan amounts than undergraduate loans, reflecting the higher cost of attending school for a master's degree or doctorate. Some lenders have special loan programs for business, law or medical school.
  • Parent loans.Parent loans are offered by lenders to parents of students. Some families have an informal agreement that the child will make loan payments after graduating, but the legal responsibility to repay the loan falls on the parent.

Find the Student Loan That’s Right for You

If You Are:Consider:
Refinancing your student loansStudent Loan Refinancing & Consolidation
Not using a co-signerStudent Loans Without a Co-Signer
Building creditBest Student Loans for Bad Credit
A parentBest Parent Student Loans
An international studentBest International Student Loans
Attending medical schoolBest Medical School Loans
Attending graduate business schoolBest MBA Loans
Attending graduate schoolBest Student Loans for Graduate School
Attending law schoolBest Student Loans for Law Schools
Attending school part timeBest Part-Time Student Loans
Seeking a loan with fast co-signer releaseFastest Co-Signer Release Student Loans
Hoping to evaluate multiple lenders at onceBest Student Loan Marketplaces

Loan Terms

The loan term is the length of the loan's repayment period, which could range from five to 20 years for private student loans. Typically, shorter loans have higher monthly payments, lower interest rates and lower total costs. Longer loans have lower monthly payments but higher interest rates and higher total costs.

Loan Limits

Loan minimums: Most lenders have minimum amounts you can borrow, which may vary based on your state. Because the minimum could be as low as $1,000, a private student loan may not be the best option if you only need a few hundred dollars for, say, books.

Loan maximums: Lenders can have several limits that affect how much you can borrow. There could be a maximum annual amount you can borrow. Or there could be a maximum combined private and federal student loan amount you must be under to qualify for a loan.

You may also be limited to borrowing up to your school's certified cost of attendance. The maximum loan limits may be higher if you're going to graduate, professional or medical school, reflecting potentially higher costs compared with undergraduate programs.

Interest Rate Types

Lenders offer student loans with either fixed or adjustable interest rates. You may not be able to switch your interest rate type after taking out a loan, so carefully consider your options before deciding.

When you're comparing student loans from different lenders, look at the annual percentage rate, or APR, rather than the interest rate. The APR is your total cost of borrowing each year.

Fixed-rate loans. With a fixed-rate private student loan, your interest rate is set when you take out the loan, and it won't change. The rate you lock in can depend on market rates, as well as your lender, your credit and your loan's terms.

"In general, a fixed-rate loan is a better long-term option for financing your education," Fleischman says. "You are able to plan for future payments without worrying that interest rates may increase payments faster than your income increases."

Variable-rate loans. The same factors that may determine your interest rate with a fixed-rate private student loan can affect your initial interest rate when you take out a variable-rate loan. But with a variable-rate loan, your interest rate may rise or fall over the life of the loan.

Interest rates for variable-rate loans are tied to an index, such as the prime rate. The lender adds a margin to the index to determine your total interest rate. There may be a limit to how high or low your interest rate can go.

Variable-rate student loans tend to start with a lower initial interest rate than fixed-rate loans and could remain lower. However, you're taking on risk because the loan's interest rate could rise, causing your monthly payment and total cost of borrowing to increase.

A variable-rate loan may be best for those who can quickly repay the loan, which will limit your risk, or for those who can afford higher monthly payments if the interest rate increases.

Several factors determine a private student loan interest rate. If you have a low credit score or no established credit history, you may be offered a higher interest rate or require a co-signer. Whether you're pursuing career training, a bachelor's degree or a master's degree, and whether it is a fixed- or variable-rate student loan all factor in to your private student loan interest rate.

Private loans can help students fill gaps in funding. Yet private student loans have drawbacks compared with federal student loans. These include:

  • Credit-based eligibility. Private student loan terms will depend on the applicant's credit. Without a creditworthy co-signer, many students may not be able to get approved or may only qualify for a high interest rate.
  • Risk for co-signers. Co-signers take on debt and risk when they add their names to private student loans. If the student can't make payments, this can hurt the co-signer's credit. In some cases, the co-signer will be responsible for the debt if the student dies or is permanently disabled.
  • Potentially higher interest rates. Private student loans do not always offer lower interest rates than federal student loans.
  • Interest rate accrual. With subsidized federal loans, the government will pay the interest while you're in school and when the loans are in deferment. With private student loans, you'll accrue interest during these periods.
  • No guaranteed hardship options. "The difference between unsubsidized loans and private loans is deeper than the accrual of interest," Fleischman says. "Unsubsidized loans come with federally mandated periods of in-school deferment, forbearance opportunities and a variety of income-driven repayment options."

    Some private student loan lenders offer deferment or forbearance options, but they might not be as lenient or as lengthy as your options with federal student loans.

  • No federal forgiveness programs. Several federal student loan forgiveness and cancellation programs aren't available with private student loans. However, private student loans may be eligible for other hardship programs, including coronavirus relief.
  • Shorter default period and little recourse. If you default on a private student loan, the entire loan balance becomes due immediately. Federal student loans default after 270 days of nonpayment, and when they do, you may have several options for getting your loans out of default.
  • Private student loans can default after one missed payment. You may be able to repay the late balance and bring the account current before the lender charges it off, often around four to six months, depending on the lender. But federal student loan programs can be much more forgiving.

Focus on four keys areas when comparing private student lenders, according to the Federal Trade Commission, the Consumer Financial Protection Bureau, the Department of Education and countless consumer reviews:

  1. Products.
  2. Eligibility requirements.
  3. Costs.
  4. Additional features.

Products

Once you've determined the type of student loan you'll need and how much you want to borrow, check to see that the lenders' offerings match your requirements. You can then compare their loan terms and limits to narrow your list. For example, make sure each lender offers financing for your degree type.

Eligibility Requirements

Research lender eligibility criteria, such as citizenship, enrollment status, income and credit history. You should make sure you're likely to qualify for a student loan before you apply.

Student loan eligibility requirements typically include:

  • Citizenship. Private student loans are generally only available to U.S. citizens, U.S. nationals and permanent resident immigrants. International students may be eligible if a U.S. citizen, national or permanent resident immigrant co-signs the loan.
  • Enrollment status. Lenders may only offer loans to students who are enrolled at least half time at an eligible school.
  • Age. You must reach the age of legal adulthood in your state – usually 18 – or have an eligible co-signer.
  • Income. There may be income requirements, including debt-to-income ratio requirements, that you or your co-signer must meet.
  • Credit history. With private student loans, your credit history and score can determine your eligibility for a private loan and your interest rate. If you don't have good credit or haven’t established credit, you may need a creditworthy co-signer, such as a parent or another trusted relative. Your co-signer's credit will be considered with your application. This makes the co-signer legally responsible for the student loan.

Costs

The cost of your private student loan will depend on a variety of factors, including the interest rate and the type of interest you choose. Look closely at fees to calculate how they'll affect your total cost of borrowing.

Some lenders provide preapprovals, which will give you an estimated interest rate without hurting your credit. It's worth getting a preapproval if that's an option, as you can reliably find out the interest rate a lender will offer you.

Lenders often have application or origination fees. Not all lenders charge these, but you should always read the loan terms closely to identify potential fees, such as the:

  • Application fee. The lender may charge a nonrefundable fee to process your application.
  • Origination fee.Origination fees, sometimes called disbursement fees, aren't common for private student loans. If the lender charges one, it's usually a fee that's equal to a percentage of the amount you borrow.
  • Late fee. A fee is required if your monthly payment is late. It may be a percentage of the amount due, with a maximum amount, such as $15 or $25.

Interest capitalization isn't a fee, but it occurs when unpaid interest is added to the principal of your student loan. How and when your interest is capitalized will influence your loan's total cost.

Some lenders let you forgo loan payments during school and for the first several months after graduation. Interest accrues on your loan principal, and when your interest capitalizes, your principal increases. As a result, you'll accrue more interest each month.

Interest capitalization also happens if you stop making payments but will continue to accrue interest in the future, such as when you put your loans into deferment.

One thing you don't have to worry about with student loans are prepayment penalties. Unlike some other types of loans, such as mortgages or personal loans, student loans do not charge borrowers fees for early repayment.

Additional Features

The fine print of private student loans can vary from one lender to another. Some features or benefits could make repayment easier, lower your interest rate or help you choose the right lender for your needs.

What Are the Benefits Of Private Student Loans?

  • Autopay savings. Many lenders offer an interest rate discount if you sign up for autopay. The discount is often 0.25 or 0.5 percentage point, but it may not take effect until you start making full principal and interest payments.
  • Other savings opportunities. Some lenders provide a discount if you have another financial product with them, such as a loan or bank account.
  • Early repayment options. Private student loans start to accrue interest as soon as they are disbursed. Some lenders have repayment plans that start while you're in school. Making interest-only payments, full payments or fixed monthly payments will help lower your loan balance before you graduate.
  • Deferment options. You might be able to defer payments while you're in school. Lenders may offer a grace period after you graduate or if you drop below half time, and you won’t need to make full payments until the grace period ends.
  • Financial hardship deferment. You may be able to defer your student loan payments if you go back to school, join the military or can't afford payments for another covered reason, such as a job loss.
  • Discharge due to death or permanent disability. Find out whether your loan balance passes on to your estate or co-signer if you die before it's repaid. Also, make sure you know what happens if you become permanently disabled and can't afford to repay the debt.
  • Co-signer release. A lender may release a co-signer from a loan after the student makes a series of on-time payments and if the student qualifies to take on the loan.

You'll take several major steps to obtain a student loan. When you apply for a student loan, you'll need to meet eligibility requirements, provide documentation, and go through processing before approval and disbursement.

1. Eligibility: The lender will check basic eligibility for the loan, including citizenship and enrollment status. Further documentation, such as your income, credit history and other eligibility factors will also be verified.

2. Required documentation: You'll need to provide personal and financial information when you apply for a private student loan. Organizing your documents could make this process easier.

Lenders may need this information for the borrower:

  • Name, address, phone number and email .
  • Date of birth and Social Security number.
  • Recent pay stubs or other proof of income.
  • Bank account balances.
  • Copy of mortgage statement or lease agreement.
  • Employer’s name, phone number and length of employment, if applicable.
  • School's name and the student's estimated cost of attendance.
  • Student's year in school and semester of enrollment.
  • Amount of financial aid received (you can find this on the award letter from the school).
  • Expected graduation date.
  • Desired loan amount and repayment period.
  • References.
  • Co-signer's name and valid contact information, if applicable.

3. Processing: Many private student loan lenders let you apply online. You may receive a decision within a few minutes after the lender analyzes your credit and other eligibility criteria. You may need to submit additional supporting documents or information if the lender has questions.

4. Approval and disbursement: Once you're approved for a private student loan, you can then choose the interest rate type, the repayment plan and the other loan terms, and then sign the loan agreement.

The lender will contact your school to verify that you're eligible for the loan amount you requested. The school could take two to five weeks to respond to the lender, and then it schedules disbursement dates and amounts for the loan.

Private student loans will be sent directly to the school. If your loan amount exceeds what you owe the school for that semester, you may receive a refund for the difference. You could return it to the lender, reducing your debt, or you could spend the money on education-related expenses, such as room, board or books.

Consider one or more of these options before jumping into a private student loan.

  • Apply for grants and scholarships. Grants and scholarships can help close the gap between college savings and educational expenses. Grants are typically awarded on the basis of financial need, such as the federal Pell Grant for low-income students. Need-based grants are awarded at the federal, state or college level. As for scholarships, students should start their search locally, since these awards are often less competitive, experts say. Different types of national scholarships are listed on database search websites, including Fastweb.com, Cappex.com, Unigo.com and U.S. News Scholarship Finder.
  • Exhaust all federal loan possibilities. Federal student loans tend to have lower interest rates that are fixed, which means the borrower is protected from sudden or significant increases to their monthly payments if interest rates rise. Federal loans also tend to offer better deferment and forbearance options, among other advantages. To apply for a federal student loan, a student and family need to fill out the Free Application for Federal Student Aid, or the FAFSA.
  • Consider a cheaper college. While an out-of-state or big state school may sound exciting, the price tag might not. Studying for two years at a community college before transferring to a four-year college can save you significant dough. The average cost of annual tuition and fees at schools ranked by U.S. News for 2021-2022 was $38,185 at private colleges, $10,338 for state residents at public colleges and $22,698 for out-of-state students at state schools, according to U.S. News data. In contrast, community colleges charge about $3,770 on average per year for in-state students, according to the 2020 Trends in College Pricing and Student Aid report released by the College Board.
  • Ask about a payment plan. Some colleges let you spread tuition out over monthly payments, reducing the amount you have to pay in one lump sum. These plans usually only cover direct costs to the institution, such as tuition and sometimes campus housing and meal plans. Not every school offers this option, but those that do often charge an enrollment fee and are usually interest-free.
  • Live at home. If you're dreaming of a traditional dorm experience, you may save a significant amount by living at home. Room and board cost an average of $11,950 per year at public colleges and $13,620 at private colleges for 2021-2022, according to the College Board. Do your research: You'll need to determine the cost of your commute, whether living at home will cut your aid amount and assess other factors.
  • Get a part-time job. A part-time job can help pay for personal expenses, supplement federal financial aid and possibly gain you valuable work experience. Though you will have to balance work and class, recent research shows those who work through school have higher earnings later in their careers. Some employers may help pay for college, with benefits like tuition assistance or paid internships. However, students who work while in college must also look out for any effect it might have on their existing financial aid eligibility.
  • Ask family or friends for support. Getting a personal loan from a family member or friend might seem awkward, but if someone is in a position to help pay for tuition or supplies directly – and wants to help – then by all means, accept gracefully.
  • Take a year off. While it might seem like the least attractive choice, sometimes taking a year off to work and save for college is preferable to taking out private student loans. Perhaps consider a job that may help you gain experience related to your field of choice before starting college. After you've exhausted all other options, weigh the total cost of a private student loan against the cost of pushing your education back a year, then decide what suits your situation best.

Education Loan Finance

4.6

U.S. News Star Rating

Education Loan Finance, also known as ELFI, is a student loan program offered by Tennessee-based SouthEast Bank since 2015. The company offers private student loans and refinancing for private and federal student loans.

Credible

4.8

U.S. News Star Rating

Credible is a loan comparison marketplace that allows would-be borrowers to shop around for loans that meet their needs – including mortgages, mortgage refinancing, student loans, student loan refinancing and personal loans. The company was founded in 2012 in San Francisco as a tool to empower borrowers to shop rates and products.

Best for fixed APR

RISLA

4.4

U.S. News Star Rating

The Rhode Island Student Loan Authority is a nonprofit quasi-state authority that provides college financing to students and parents. The lender specializes in providing loans to Rhode Island residents and students, though not all loans have residency requirements.

Best for no fees

Discover

4.4

U.S. News Star Rating

Discover Bank has been operating for more than 100 years, and since 2010, it has offered private student loans to students attending more than 2,400 colleges and universities. Loans of up to 100% of education costs with fixed or variable rates are available. This Discover student loans review highlights the main features, application process and more to help borrowers decide if it’s a good fit.

Best for co-borrowers

MEFA

4.2

U.S. News Star Rating

The Massachusetts Educational Financing Authority offers private student loans to undergraduate and graduate students nationwide. The lender also offers education refinancing loans across the country.

Best for small loan amounts

EDvestinU

4.1

U.S. News Star Rating

EDvestinU is a nonprofit student loan lending and refinancing organization. Undergraduate and graduate loans and student loan consolidation are available.

Advertising Disclosure: Some of the loan offers on this site are from companies who are advertising clients of U.S. News. Advertising considerations may impact where offers appear on the site but do not affect any editorial decisions, such as which loan products we write about and how we evaluate them. This site does not include all loan companies or all loan offers available in the marketplace.