Best Private Student Loans for Undergraduates

Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice, and in 2017 he received the SABEW Best in Business Award.

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We've vetted the most popular private student loans for undergraduates to bring you a shortlist of top picks. From low interest rates and fees to discounts and flexible payment terms, these providers get the best grades in their class.

Here are The Ascent's pick for the best private graduate student loans:

Provider Rates & Terms Great For Get Started
Rates & Terms:

Fixed Rates: 5.29 - 9.83%

Variable Rates: 3.95 - 9.81%

Terms: 5, 10, 15 years

Great For:
  • Low rates
  • Cosigner release after 24 months
  • Forbearance option
Get Started: Check Rate
  • Checking rates won't impact your credit score

Credible Student Loans

Rates & Terms:

Fixed Rates: 4.73 - 12.99%

Variable Rates: 3.87 - 11.99%

Terms: Varies by lender

Great For:
  • Best rate guarantee
  • $0 fees for origination
  • $0 prepayment penalty
  • Checking rates won't impact your credit score

College Ave Student Loans

Rates & Terms:

Fixed Rates: 5.29 - 12.78%

Variable Rates: 4.2 - 11.44%

Terms: 5, 8, 10, 15 years

Great For:
  • Graduate and career loans
  • Flexible term options
  • Graduation reward
  • Checking rates won't impact your credit score

Wells Fargo private student loans

Rates & Terms:

Fixed Rates: 5.49 - 10.93%

Variable Rates: 4.8 - 10.72%

Terms: See terms

Great For:
  • Discounts
  • High limits
  • Up to 0.75% rate discount for Wells Fargo customers with autopay

Suntrust private student loans

Rates & Terms:

Fixed Rates: 4.551 - 11.3%

Variable Rates: 3.751 - 10.8%

Terms: 7, 10, and 15 years

Great For:
  • Low rates
  • Discounts
  • Graduation reward
  • Get a 2% reduction in your student loan principal when you graduate

Sallie Mae Student Loans

Rates & Terms:

Fixed Rates: 5.49 - 11.85%

Variable Rates: 4.37 - 11.47%

Terms: 5,15 years

Great For:
  • Specialized loan programs
  • Free FICO® Score
  • Repayment flexibility
  • Get 4 months of free homework support with Chegg's Study Starter when you apply
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CommonBond

CommonBond scores points for flexibility. There’s a built-in forbearance feature that allows borrowers to postpone payments for as many as 24 months over the life of their loans. CommonBond also has low APRs, high borrowing limits, and a quick and easy application process.

  • Fixed Rates: 5.29 - 9.83%
  • Variable Rates: 3.95 - 9.81%
  • Loan amounts: Up to 100% of the cost of school attendance
  • Soft inquiry: Yes
  • Funding: Undergraduate and Graduate
  • Autopay discount: 0.25%
  • Graduation discount: None
  • Loyalty discount: None
  • Fees: 2% origination fee (included in APR)
  • Deferred interest: None
  • Forbearance: Yes, up to 24 months over life of the loan
  • Cosigner: Yes

Credible

Credible isn’t actually a lender. It’s a platform that partners with multiple lenders to provide several (up to eight) student loan quotes with a single application. None of Credible’s partners charge origination fees or prepayment penalties, and the form to get all of your rate quotes takes about two minutes to fill out.

  • Fixed Rates: 4.73 - 12.99%
  • Variable Rates: 3.87 - 11.99%
  • Loan amounts: Varies by lender
  • Soft inquiry: Yes
  • Funding: Undergraduate and Graduate
  • Autopay discount: Yes, varies by lender
  • Graduation discount: Yes, varies by lender
  • Loyalty discount: Yes, varies by lender
  • Fees: $0 origination, $0 prepayment penalty, $0 service fee
  • Deferred interest: Yes, varies by lender
  • Forbearance: Yes, varies by lender
  • Cosigner: Yes, varies by lender

College Ave

College Ave offers low APRs, high borrowing limits, and one of the most user-friendly application processes in the industry. Borrowers can choose between four different repayment term lengths ranging from five to 15 years, and College Ave allows borrowers to check their rates without affecting their credit score -- a rarity among in-school private lenders. There’s also no cosigner requirement, no half-time enrollment requirement, and borrowers receive a $150 statement credit upon completing their degree.

  • Fixed Rates: 5.29 - 12.78%
  • Variable Rates: 4.2 - 11.44%
  • Loan amounts: 100% of their school’s cost of attendance.
  • Soft inquiry: Yes
  • Funding: Undergraduate and Graduate
  • Autopay discount: 0.25%
  • Graduation discount: $150 as statement credit
  • Loyalty discount: None
  • Fees: None
  • Deferred interest: None
  • Forbearance: No
  • Cosigner: Yes

Wells Fargo private student loans

Wells Fargo offers some of the lowest APRs in the industry for undergraduate loans, and doesn’t charge any application, origination, or prepayment fees. In addition to the industry-standard auto-pay discount, Wells Fargo offers additional discounts to people with existing banking relationships. Unlike most private lenders, Wells Fargo doesn’t have a minimum enrollment requirement, and cosigners are not required for borrowers with established credit of their own.

  • Fixed Rates: 5.49 - 10.93%
  • Variable Rates: 4.8 - 10.72%
  • Loan amounts: Up to $120,000
  • Soft inquiry: No
  • Funding: Undergraduate
  • Autopay discount: 0.25%
  • Graduation discount: No
  • Loyalty discount: Yes, up to 0.50% rate discount for certain Wells Fargo customers
  • Fees: $0 origination, $0 early repayment
  • Deferred interest: Yes, make no payments until six months after leaving school
  • Forbearance: No
  • Cosigner: None

SunTrust private student loans

SunTrust’s private student loans have low starting APRs and high borrowing limits. SunTrust offers additional discounts to customers who have banking relationships, and also offers a 2% principal reduction upon graduation. While cosigners are welcome, they aren’t required of students who have established credit.

  • Fixed Rates: 4.551 - 11.3%
  • Variable Rates: 3.751 - 10.8%
  • Loan amounts: $150,000
  • Soft inquiry: No
  • Funding: Undergraduate and Graduate
  • Autopay discount: 0.25%
  • Graduation discount: 2% reduction in principal when you graduate
  • Loyalty discount: 0.25% discount for auto pay from a SunTrust bank account
  • Fees: $0 origination, $0 prepayment penalty
  • Deferred interest: No
  • Forbearance: No
  • Cosigner: Yes

Sallie Mae private student loans

Sallie Mae’s undergraduate loans have low starting APRs and no origination fees. Borrowers can obtain loans for up to 100% of their school’s total cost of attendance. Sallie Mae offers some of the most flexible repayment options in the industry, such as the option to make 12 interest-only payments after the grace period expires.

  • Fixed Rates: 5.49 - 11.85%
  • Variable Rates: 4.37 - 11.47%
  • Loan amounts: 100% of their school’s total cost of attendance
  • Soft inquiry: No
  • Funding: Undergraduate and Graduate
  • Autopay discount: 0.25%
  • Graduation discount: None
  • Loyalty discount: None
  • Fees: None
  • Deferred interest: None
  • Forbearance: No
  • Cosigner: Yes

How we picked the winners

There are several factors we evaluated when deciding which private student lenders are the best options for undergraduate students. Just to name some of the most important:

  • Interest rates/APRs -- This is perhaps the most obvious factor. All other things being equal, we definitely want to pay as little as possible to borrow money. Most private lenders offer a range of possible interest rates, in the form of both fixed- and variable-rates.
  • Discounts -- It’s become a standard practice in the student loan industry to offer a 0.25% interest rate discount to borrowers who agree to auto-pay their bill. However, some lenders offer other discounts, such as for good grades or an existing banking relationship. Some even give you a statement credit or principal reduction when you complete your degree.
  • Flexible repayment -- Deferment and forbearance options are a feature of federal student loans but aren’t quite as common in the private student loan industry. Some private lenders do have specific forbearance programs, and these can be great features if you fall on hard times.
  • Flexible terms -- Do lenders allow borrowers to choose between several repayment term lengths, or just one or two? The more control you have over your repayment term, the more control you have over your monthly payment. And do they allow for flexible repayment choices while you’re in school? Can you choose to make payments while in school, and if so, can you choose between full payments, interest-only payments, and other options?
  • Cosigners -- Most student borrowers will need a creditworthy cosigner, but not all lenders necessarily require it. And many private lenders have a cosigner release process, which can eventually take the legal responsibility of your loan off of your cosigner, although this varies from lender to lender.
  • Soft credit pull -- The ability to check your rates without affecting your credit score is common when it comes to student loan refinancing, but not so much for in-school student loans. However, some lenders do offer this feature.
  • Fees -- Some private student lenders charge origination fees, while others don’t. While they’re less common, application and prepayment fees are also important to watch out for.

Why you can trust me

I’m a Certified Financial Planner® who has published more than 4,500 articles on various personal finance and investment topics, and my work has been syndicated on news outlets such as MSN Money, USA Today, CNN Money, and more. In addition, I’m a student loan borrower myself who has extensive firsthand experience with the student loan borrowing, repayment, and refinancing processes.

What is a private student loan?

The basic concept of a private student loan is similar in nature to any other type of bank loan. A borrower’s qualifications are assessed by the lender -- such as credit history, other debts, employment, income, and other factors. Based on this information, the lender can decide to make the loan or not.

The main difference is that unlike other lending products such as personal loans, private student loans are intended to fund educational expenses. The maximum amount you can borrow is generally dependent on your school’s cost of attendance, which includes things like tuition, fees, supplies, room and board, and other costs associated with attending classes and completing the coursework.

Generally speaking, in order to qualify for a private student loan, you’ll need to be enrolled in a degree or certificate program at an accredited educational institution. Some lenders have a minimum course load requirement as well, such as being enrolled on at least a half-time basis.

Private student loans vs. federal student loans

There are two main types of student loans borrowers can pick from -- private or federal. Private student loans are funded and underwritten by private lenders, while federal student loans are originated (and guaranteed) by the U.S. government.

To be perfectly clear, federal student loans are superior to private student loans in most ways. However, as we’ll see, that doesn’t mean a private student loan isn’t a good idea. Specifically:

  • Federal student loans are available to all eligible students. There’s no credit qualification requirement to obtain a federal student loan, nor is there a requirement that you apply with a cosigner, regardless of your credit, age, income, or employment situation. And since they’re guaranteed by the government, federal student loans have the same low, fixed interest rates for all borrowers. In most cases, the rates borrowers can expect from private lenders won’t be able to beat the rates offered with federal student loans.
  • Federal student loans can be subsidized. While the borrowing limits for subsidized loans are relatively low, this means that the government pays the interest on these loans while you’re in school, in a grade period, or in a qualified deferment. Simply put, there’s no equivalent to subsidized federal student loans in the private market.
  • Federal student loans may qualify for income-driven repayment plans, which cap your monthly payment amount at a certain percentage of your discretionary income. Plus, if you’re repaying loans under one of these plans, any remaining balance is forgiven after a certain number of years.
  • Federal student loans are eligible for loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness, provided that the borrower meets all of the other requirements of the specific program.

In fact, federal student loans are so superior that virtually every private student lender I’ve come across advises customers to use federal student loans as much as possible before considering applying for a private loan.

When to apply for private student loans

The major reason to use a private loan is that the borrowing limits for federal student loans are relatively low when compared with the cost of attending college in many cases. This is especially true in the first few years of college -- in fact, a first-year dependent college student can only borrow $5,500 in federal loans. In the majority of cases, this is not enough to cover the costs of attending school all by itself. Meanwhile, most private student loan companies only limit the size of their loans by the school’s total cost of attendance.

So private student loans are best used to bridge your funding gap between federal student loans (as well as other sources of funding like scholarships and grants) and the actual cost of attending school. If you still have financial need left after maxing out all of your other sources of funding, it could be a smart idea to apply for a private student loan.

Can you get a private student loan without a cosigner?

The short answer is “it depends.” In order to qualify for virtually any private loan product, your qualifications need to justify the loan. For example, when I applied for a mortgage, the lender checked my credit history to assess the likelihood that I’d make my loan payments on time, and also evaluated by income and employment situation in order to ensure that I could afford to make those payments.

The same idea applies to private student loans. Unfortunately, the credit, income, and employment qualifications of most student borrowers doesn’t justify the loan. That’s where cosigners come in. A cosigner is essentially loaning you their own qualifications in order to obtain a loan and is agreeing to be legally responsible for making the loan payments if you don’t.

Furthermore, some private student lenders require all applicants to apply with a cosigner, even if they could otherwise qualify for the loan on their own merit. Others will allow student borrowers to apply without a cosigner. If you’re a well-qualified borrower who happens to be heading back to school, just to name one example, you may want to look for a lender that doesn’t require cosigners.

It’s also worth mentioning that most private lenders have a way for a cosigner to eventually be released from the loan. This generally happens after a certain number of on-time loan payments have been made, but the exact requirements vary between lenders. If your cosigner doesn’t necessarily want to be legally responsible for your loan for its entire term, you may want to consider each lender’s cosigner release procedures.

How to choose a private student lender

Well, by visiting this page, you’re taking a great first step. We’ve tried to do the hard part for you by narrowing down our picks for the best private student lenders for undergraduates.

However, to narrow down your selection, the most important thing to do is to ask yourself which lender makes the most sense for you. For example, if you’re already a Wells Fargo or SunTrust customer, it could make sense to start your search with one of them. If flexibility is important, you may want to consider a lender like CommonBond that offers a generous forbearance feature.

The point is that while we love all the lenders mentioned in this review, there’s no such thing as a perfect lender for everyone. If there is, I certainly haven’t found it. So take a minute and check the individual reviews for the lenders you’re most interested in to see which one is the best fit for you. As you’re doing that, it might be a good idea to re-read our checklist of criteria we used to pick the winners, as this can give you some possible deciding factors to think about.

How to apply for private student loans

While applying for federal student aid involves a somewhat complex process, applying for any of these private student loans does not. You can apply with any of the lenders on this list quickly and easily online. In some cases, the application process won’t take more than a few minutes.

Before you apply, it’s a smart idea to have information such as your Social Security number and driver’s license handy (as well as for your cosigner, if applicable), along with information about the school you’re attending or planning to attend.

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