Looking for the best private student loans?
Funding your education using student loans can be pretty useful. Here is an insightful guide on all you need to know about the best private student loans of 2021.
You have deftly tackled the nerve-wracking pressure of getting into the college or university of your dreams. You have the scores, a host of co-curricular activities to show your mettle, and the only thing left to do is secure a student loan to fund your education.
Quite a significant number of students are in your shoes right now. In fact, studies reveal that a whopping 71% students course through college with the help of student loans every year on an average. Not that startling, if you think about the high cost of education at the leading higher education institutions all across the world.
Since you are at the threshold of applying for one, it is best to proceed with all the knowledge that you can get your hands on regarding student loans. Presented here is a quick overview of the crucial facts and factors pertaining to student loans along with 6 best private student loan options you can explore.
The Difference Between Federal and Private Student Loans
Did you know the likes of Barack Obama and plenty of Hollywood actors (including Jane Lynch and Finesse Mitchell) all had to use student loans, whether federal or private? They couldn’t even escape the high cost of college, which is usually over $30,000 in the United States for a 4-year public college.
Before we apply for student loans, here are the basics of federal and private student loans.
Federal and Private Student Loans – Know the Difference:
Federal Student Loans
A federal loan stands for a loan that you borrow from the government. You are basically using the taxpayers’ money to get your college or university degree, hence repaying federal loans come with a different level of responsibility altogether.
However, since interest rates are comparatively lower in federal loans and one does not require having a great credit score, most students take a lax approach when the time comes for repayment. You will also find options for paying as per your level of income or alternative repayment options if you apply for federal loans.
Private Student Loans
In case you opt for a private student loan, a credit union, bank or online lender provides you with the money that you need to pay your way through getting a higher education degree. They can have varying rates of interest (that is usually dependent on the loan provider and the type of interest you choose) and have comparatively rigid repayment options.
However, since the rules regarding what you do with the loan money are quite lax in case of private loans, you can come up with ingenious tricks to pay it off way before it starts accumulating interest.
Top 6 Best Private Student Loan Options
Prior to approaching a lender for a private student loan, you must know that you will need to have to meet a number of criteria for your loan to be approved.
Carefully consider if you have an established credit score (or having a creditworthy co-signer will also do the trick) and read all terms and conditions before you apply.
Here are the six best private student loans that will help you pay off the high tuition fees for college or university.
In a hurry? You can easily find the best private student loans with Credible. Credible is an online marketplace that provides borrowers with competitive, personalized private student loan offers from multiple, vetted lenders in real-time without affecting your credit score.
But if you want to do your research — here are the best private student loans we’ve found.
LendKey offers repayments terms ranging from five to 20 years. They have numerous excellent 5-star reviews on Trustpilot and the process is easy to complete.
Borrowers can include parents of students, parents of graduates and degree holders as well as current undergrad and graduate students. To be eligible, U.S. citizens and permanent residents must have proof of citizenship or residence permit as well as proof of income. Potential borrowers can check their eligibility online and then receive offers from LendKey’s networks of community lenders.
The minimum loan amount starts at $7,500 and goes up to $250,000, with rates as low as 2.95% or 1.90% depending on if you go with a variable or fixed APR.
Don’t meet the requirements or want to qualify for a lower interest rate?
LendKey allows for borrowers to add a cosigner to the loan to help borrowers meet eligibility and get the interest rate that works best for them. This isn’t the only benefit to considering a LendKey loan, they also offer unemployment protection. If you lose your job or have just finished school, loan payments are placed on temporary hold.
SoFi’s mission is to help its customers handle their money and repay their student loans as quickly as feasible. SoFi offers a 3.49%–10.66% fixed APR with terms of 5-20 years.
SoFi loans are available to all students with a credit score of less than perfect, and the entire application procedure can be completed online. There are no additional costs associated with any SoFi loans, and students have several payment alternatives that suit their budget.
With perks like $400 off SAT/ACT preparation courses, it’s no surprise that most SoFi members would suggest the company to a friend.
3. Funding U
Funding U, also known as Funding University, has been around since 2016. This is a company that offers student loans to students without credit or a co-signer at eligible four-year colleges.
Funding U doesn’t fund you based on your credit score, but your grades in school and projected earnings after graduation. If you are a junior or senior in college, you can qualify for a Funding U loan. However, if you are a freshman or sophomore, the approval process is more strict.
It’s a smart option for students because:
- You don’t need a co-signer or credit history to get a loan.
- You can see if you’ll qualify and what rate you’ll get without a hard credit check.
- DACA students with a work-eligible Social Security number can qualify.
If you wanted to apply you can see what rate you’ll get and it’s a soft credit check. The loan term is 10 years and loan amounts up to $10,000 and the range of interest rates is in line with other private student lenders.
Looking to make financing your education easy and affordable? You can apply for a private student loan from Citizens Bank today if you have a good or excellent credit score.
Citizens Bank private student loans are ideal for international students who have a qualifying co-signer and those with existing banking relationships with the bank. Applicants that open a qualifying Citizens Bank account get 0.25 percentage point interest rate savings.
If you’re going to a four-year institution to get your bachelor’s degree, you’ll be better off with another bank. If you want to take a certificate course at a local community college or attend a community college, Citizens Bank isn’t the best option. To qualify, students must have an undergraduate degree or higher and be pursuing a bachelor’s.
- Loan repayment terms of 5, 10 or 15 years
- 25% reduction in interest rates if you go for auto-repaying options while still in college or university
- 25% reduction in interest rates for existing Citizens bank account holders
- Fixed APR starting at 3.23%
- Variable APR of 1.03%
- No application, prepayment, disbursement or origination fees required
- Good or excellent credit scores needed
Student loans are available at College Avenue Student Loans — which was founded in 2014 and is located in Wilmington, Delaware, provides undergraduate, graduate, and parent loans to borrowers from all 50 states.
With applications that take a few minutes to finish on any device and quick decisions, College Ave has an edge in terms of speed.
At College Ave Student loans you can apply in just 3 minutes and get an instant decision. College Ave offers 4 flexible repayment options to help you make paying your student loans off easier.
Special features include: Repayment Options, US Based Customer Service, Easy Mobile Application.
- Loan term length of 8, 10, 12 or 15 years
- No application, origination or prepayment fees required
- 25% reduction in the interest rate for auto-repaying methods while in college or university
- Fixed APR of 4.72% – 12.94%
- Variable APR of 3.96% – 12.94%
- Good or excellent credit score needed (get a co-signer if you have a bad or no credit score)
5. Sallie Mae
Sallie Mae offers a variety of student loans for college and more. Apply for the Sallie Mae private student loan that fits your needs today and you’ll be in great hands.
- Covers up to 100% of education costs (including college-approved expenses)
- Offers interest rate reductions (subject to terms and conditions)
- 15-minute response time after applying
- No origination, prepayment or application fees
- Fixed APR of 4.74% – 11.35%
- Variable APR of 3.37% – 10.75%
- Good or excellent credit score required (you can opt for a co-signer in case you do not have a credit score)
Discover’s private student loans are a smart alternative for students who want to customize their payments in case they need more wiggle room in the future. In comparison with other student loan lenders, Discover provides more repayment assistance options, including the possibility of lowering payments temporarily.
Learn about student loans for college from #6 on our top picks for private student loan options. Discover Student Loans can help you find the best private student loan to fit your needs.
- Covers up to 100% of your education costs (including college-approved estimations of tuition and additional resources)
- Offers an interest-only repayment discount
- Includes 1% cash reward as an acknowledgment for good grades
- A simplified application process that provides the promptest feedback
- Fixed APR of 4.74% – 12.99%
- Variable APR of 3.37% – 11.87%
- No origination or prepayment fees needed
- A good or excellent credit score is needed (you can get a creditworthy co-signer in case you have a bad or no credit score to show)
Are There More Private Student Loan Options?
This list is not a comprehensive one by any means. There are definitely many more student loan options available to you — both private and federal — that we encourage you to research and consider as well.
The loans listed here are some of the best in regards to benefits and future opportunities, such as the interest rate reduction for meeting various requirements.
Your Best Option for Private Student Loans
You can benefit from using our top pick, LendKey, to help you pick the best private student loan with the lowest rates:
When choosing a loan, remember to consider variable versus fixed rates and also the repayment plans offered. You might not have the resources to repay a loan immediately after you graduate and enter the workforce. In that case, deferment options and grace periods are highly beneficial.
Whether it is a public, non-profit private, or for-profit private higher education institution, you can ease a considerable portion of the financial burden if you choose to go for private student loans. It is a common case for almost every student aspiring for higher education. Consider all the factors carefully before you apply for one, read this student loans 101 guide, and make sure that you are wise with spending the money.
With oodles of confidence, a fiery passion for academics, and all-around know-how of the workings of the world, you will surely be able to repay your student debt once you start earning a living after graduation. Good luck in securing a suitable private student loan to give wings to your scholastic aspirations!
Any questions on any of these best private student loans for 2021? Sound off below!