College Ave Private Student Loan Review
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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College Ave is a versatile private student loan lender, offering student loans for undergraduate, graduate, and career programs. With competitive rates, flexible payment options, and success rewards, they are a solid option for anyone in need of a private student loan. Here's an in-depth review to determine if College Ave. is right for your needs.
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Rating image, 3.5 out of 5 stars.
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Rates & Terms:
Fixed Rates: 5.29 - 12.78%
Variable Rates: 4.2 - 11.44%
Terms: 5, 8, 10, 15 years
There’s no such thing as a perfect lender (or if there is, we certainly haven’t found it). However, there’s a lot for prospective borrowers to like about College Ave’s private student loans:
- High borrowing limits -- Some private lenders cap the maximum amount a student can borrow, but College Ave allows students to borrow as much as 100% of their school’s cost of attendance.
- Fast application -- College Ave has one of the easiest and most user-friendly application processes. In fact, the company claims that most people can apply within three minutes and get an instant credit decision.
- Competitive APRs -- College Ave offers some of the lowest advertised private student loan interest rates for undergraduates, grad student, and parents, especially for borrowers with strong credit.
- Repayment options -- College Ave offers four different choices when it comes to repaying their student loans. Students can choose to make full payments right away, pay only the interest that accrues while in school, make just a $25 monthly payment while in school, or defer payments completely while they’re still in school. College Ave says that 63% of its borrowers choose one of the in-school repayment options, and Parent Loan borrowers must be able to at least cover the interest while their child is in school.
- Flexible term lengths -- College Ave offers four different repayment terms borrowers can choose -- five, eight, 10, or 15 years. While this isn’t the most flexible term choice of private lenders, there are plenty of competitors that offer just two or three term lengths to choose from.
- Soft credit pull -- College Ave allows you and your cosigner (if applicable) to check your interest rates without affecting your credit score. While this is a common feature when it comes to refinancing existing student loans, this is a rarity among private lenders who originate new student loans.
- Cosigner not necessarily required -- Most undergraduate students don’t have an established credit history, so in the vast majority of cases (95%), College Ave’s undergraduate student loans are cosigned. However, unlike several other private lenders, a cosigner isn’t a requirement. In other words, if a student happens to have a good credit history at the time of the application, they could potentially apply on their own merit.
- No half-time enrollment requirement -- College Ave requires borrowers to be enrolled in a degree program, but there’s no full-time or even half-time enrollment requirement.
- Success Rewards -- This is a feature that is unique to College Ave’s Career Loan. Borrowers who complete a degree can receive $150 as a statement credit towards their principle balance.
- Auto-pay discount -- College Ave offers a 0.25% interest rate reduction when borrowers enroll in autopay (Note: This is reflected in the interest rates listed in this review). This is a common perk, but is still worth mentioning.
- No fees -- College Ave charges no origination or application fees for their loans.
What could be improved
As I mentioned, there is no such thing as a perfect student lender. While the “pros” list is certainly longer when it comes to College Ave’s private student loans, there are a couple of things some of its competitors do better:
- Better graduation incentive -- We love the Success Rewards program for the Career Loan, but would love to see it expanded to College Ave’s other loans. Some competitors offer graduation principal reductions of 1% or 2% of the loan’s balance, and it could help if College Ave offered something similar.
- Restrictive cosigner release -- Most private lenders offer a way for a cosigner to be released from the loan. College Ave does as well, and it’s not the requirement of 24 consecutive on-time payments that is the problem. In order for a College Ave cosigner to be released, the borrower must have two years of income that is more than twice the outstanding balance of all of their College Ave loans. In other words, if a borrower has $50,000 in outstanding loans, they’ll need income over $100,000 for two years in order to release their cosigner.
To be eligible for a College Ave student loan, you’ll need to be enrolled in a degree program at an eligible school. However, unlike many lenders, there’s no minimum enrollment requirement -- students enrolled on a less-than-half-time basis are eligible.
Furthermore, international students (with a valid U.S. Social Security number) are eligible for College Ave loans, although they are required to have a cosigner.
College Ave. offers loans for the following types of students:
- Undergraduate -- Loans for bachelor’s and/or associate’s degrees.
- Graduate -- These include loans to cover masters, doctoral, or professional degrees, among other postgraduate degrees.
- Parent loans -- Student loans a parent takes out to help pay for their child’s education. (Note: The key difference between parent loans and cosigned loans is that the student isn’t legally responsible for a parent loan.)
- Career loans -- Designed for students in career-training programs.
Who these loans are right for
- Borrowers who have good credit, or whose cosigner has good credit. College Ave’s student loans offer very competitive APRs for the strongest-credit borrowers.
- Borrowers who have exhausted their federal borrowing options, and other sources of funding such as scholarships and grants.
- Borrowers who want the flexibility to repay their loan as they see fit (or not at all) while they’re in school.
How to apply
As I mentioned, the application process for a College Ave student loan is a quick and easy one. The online application takes just a few minutes, and you’ll get an instant credit decision. Alternatively, if you aren’t ready to commit, College Ave allows you to check your rate quickly and easily with no impact to your (or your cosigner’s) credit.
Alternatives to consider
If you qualify for federal student loans, it’s generally a good idea to use those first, before considering a private student loan. In fact, federal loans have so many unique advantages over private student loans that many private lenders (College Ave included) specifically advise customers to utilize federal borrowing capacity first.
Just to name a few advantages of federal loans:
- No credit check or income requirements.
- No cosigner required, even if you have no credit history at all.
- Some federal loans are subsidized, meaning that the federal government pays the interest on the loans while you’re in school and during qualified deferments.
- Federal loans may qualify for forgiveness programs such as Public Service Loan Forgiveness (PSLF) or teacher loan forgiveness. Private loans never do.
- Federal loans offer income-driven repayment plans, such as Pay As You Earn (PAYE), which limit your monthly student loan payments to a certain percentage of your disposable income. This can be a big advantage, especially if you plan on working in a lower-paying career field after school.
The biggest downside to federal student loans is the borrowing limits. In the majority of cases, federal student loans don’t cover the entire cost of attending school (especially for undergraduates). Therefore, private loans are best used to bridge the gap between what you can get from scholarships, grants, federal loans, and other sources, and your total cost of attending.
In addition, it’s important to explore your options when it comes to private lenders. If you’ve decided that you’ll need a private student loan to help fund your education, it’s important to compare some of the options on the market to determine which is the best fit for you. Our best student loans page is a great place to start.
College Ave's private student loans are a great option for anyone who has maxed out their federal student loan options, or can't get a federal student loan for a career-training program. College Ave offers competitive APRs compared to the rest of the online market, and they offer great flexibility in payment plans and a good user experience.