When pursuing higher education goals, a common challenge students often face is how to pay for college tuition and other expenses. One option is to apply for two different student loan types: federal and private. Pursuing a federal loan first might be the right choice if you need financial aid for college expenses. Afterward, a private loan can help fill in the gaps. Learn about the different types of loans so you can apply for the best student loan for you.
Federal Loans vs. Private Loans
Federal student loans, which are funded by the federal government, offer perks such as low, fixed interest rates and income-based repayment plans — but the amount you can borrow each year is limited. Unlike private loans, some federal loans are subsidized, which means that you aren’t responsible for paying any interest on the loan while in school or during the grace period or deferment.
Private student loans — which are offered by banks, credit unions, schools and state agencies — offer both fixed and variable interest rate options. But, unlike federal loans, private loans aren’t subsidized and can require students to begin repaying while still in school. Additionally, private loans usually feature higher student loan rates than federal loans and require a credit check before funding.
Here’s an at-a-glance view of the 10 best private student loan options:
|10 Best Private Student Loans|
|Loan Provider||APR Range||Loan Amounts||How to Apply|
|Sallie Mae||3.25% to 11.85%||$1,000+||Learn More|
|Discover Student Loans||3.87% to 12.49%||$1,000+||Learn More|
|Citizens Bank||3.14% to 11.90%||$1,000 to $295,000||Learn More|
|College Ave Student Loans||3.69% to 12.52%||$2,000+||Learn More|
|Rhode Island Student Loan Authority||4.24% to 5.99%||$1500 to $40,000 per year||Learn More|
|SoFi Student||3.25% to 7.13%||$5,000+||Learn More|
|Wells Fargo||3.87% to 11.26%||Up to $120,000 undergraduate||Learn More|
|Commerce Bank||3.25% to 11.85%||$1,000+||Learn More|
|iHelp Student Loans||3.77% to 9.20%||$1,000-$150,000||Learn More|
|CommonBond||3.07% to 9.21%||Up to $110,00 per year||Learn More|
Best Private Student Loans
So you can better decide on the right private student loans for your financial needs and situation, take a closer look at some of the best options available. Here are the 10 best private student loans:
Sallie Mae Smart Option Student Loan
Interest Rates: 3.25% to 11.85% APRLoan Amounts: $1,000 and upFees: None
The Sallie Mae Smart Option Student Loan is available to U.S. citizens and permanent residents or non-U.S. citizen borrowers who have a creditworthy co-signer. Borrowers who need help paying for college have the option of choosing between variable and fixed interest rate loans.
After graduation, you can defer payments for up to six months with the deferred payment option or request to make 12 monthly interest-only payments with the interest repayment option. Additional perks include the ability to check your FICO score quarterly and receive up to 120 minutes of free tutoring.
Discover Student Loans
Interest Rates: 3.75% to 11.61% APRLoan Amounts: $1,000 and upFees: None
Discover Student Loans allow U.S. citizens, permanent residents or international students with a co-signer to apply for a variable or fixed-rate student loan, and borrow up to the amount of the school-certified cost of attendance. Borrowers must be at least 16, enrolled at least half-time and pass a credit check. Perks include a 1 percent cash back option when you get at least a 3.0 GPA and a 0.25 percent interest rate reduction with auto debit and no late fees.
Citizens Bank Student Loans
Interest Rates: 3.14% to 11.90% APRLoan Amounts: $1,000 to $295,000Fees: None
Citizens Bank Student loans have competitive private student loan interest rates for students who are enrolled at least halftime. To be approved, you must meet creditworthiness standards and be the age of majority in your state of residence or have a co-signer.
Additionally, you have the option of multiyear approval, which means you don’t have to apply for student loans annually, which can help protect your credit score. You can also save money with a loan interest rate reduction of up to 0.50 percent when you have a combined Citizens Bank’s Loyalty Discount and automatic payment discount.
College Ave Student Loans
Interest Rates: Never to exceed 25% APR on variable loansLoan Amounts: $2,000 and upFees: No origination fee
To be eligible for College Ave student loans, borrowers must be a U.S. citizen or a permanent resident, attend school at least half-time and meet credit and income guidelines. A co-signer, if needed, must also be a U.S. citizen. College Ave offers borrowers the flexibility of choosing their loan term, which ranges from eight to 15 years.
Additionally, auto debit is available — which ensures you won’t miss a payment — plus a 0.25 percent auto-pay interest rate reduction applies. As you consider how much to borrow, think about student loan repayment strategies. Four payment options are available, one of which will allow you to defer payments until you graduate.
Rhode Island Student Loan Authority
Interest Rates: 4.24% to 5.93% APRLoan Amounts: $1,500 to $40,000 per yearFees: None
To qualify for a loan from RISLA, you must be a U.S. citizen, enrolled in a college located in Rhode Island or be a resident of the state and meet income requirements. Students can receive a 0.25 percent interest rate reduction by enrolling in the automatic debit program. RISLA also offers income-based repayment plans, which create a manageable monthly payment based on the annual income and family size of the borrower and co-borrower.
SoFi Student Loans
Interest Rates: 3.250% to 7.125% APR for fixed-rate loans when you enroll in autopay; 2.560% to 7.400% APR when you enroll in autopayLoan Amounts: $5,000 and up; minimum loan amount might be higher in some statesFees: None in most states
SoFi allows you to refinance private and federal student loans at fixed and variable rates. To qualify, you must be a U.S. citizen and meet credit and income requirements. Because SoFi offers some of the lowest private student loan rates, this lender might help you to save money over the life of the loan.
Another way to save money is to enroll in auto debit and receive a 0.25 percent interest rate reduction. Plus, SoFi offers career counseling as a perk to its clients.
Wells Fargo Student Loans
Interest Rates: 3.87% to 11.26% APRLoan Amounts: Up to $120,000 including federal loansFees: None
Wells Fargo offers loans with fixed or variable interest rates to degree-seeking students. To qualify, you’ll need to meet credit, employment and debt-to-income requirements. Otherwise, a co-signer can help you qualify.
To save money, there’s a 0.25 percent interest rate reduction for setting up an automatic payment, and an additional 0.25 percent reduction if you’ve had a prior Wells Fargo student loan or you have a qualified Wells Fargo consumer checking account.
Commerce Bank Student Loans
Interest Rates: 3.25% to 11.85% APRLoan Amounts: $1,000 and upFees: No origination fee
Commerce Bank offers student loans to U.S. citizens, or non-U.S. citizens with a U.S. citizen co-signer, who are enrolled and seeking a degree. The loan offers deferred payments until graduation. Borrowers who chose to pay small payments each month while in school can receive a rate that’s 0.50 percentage points lower than the deferred payment option and those who make monthly interest payments can receive a rate that’s 1 percent lower.
You can further reduce the interest payment by 0.25 percent by enrolling in auto debit. Other perks include free quarterly FICO credit scores and up to 120 free minutes of live online tutoring.
Find Out: How Student Loans Can Save You Thousands
iHelp Student Loans
Interest Rates: 3.77% to 9.20% APRLoan Amounts: $1,000 to $150,000Fees: None
iHelp offers instant preapproval for its variable-rate student loans. U.S. citizens or permanent residents of legal age who are enrolled in eligible schools are welcome to apply.
To qualify, borrowers or cosigners must meet income requirements of earning at least $24,000 over the last two years and have a favorable credit history. Additionally, a cosigner’s debt-to-income ratio cannot exceed 45 percent. Both in-school and after graduation repayment options are available to borrowers. Additionally, iHelp offers free college planning services.
CommonBond Student Loans
Interest Rates: 3.08% to 9.21% APRLoan Amounts: Up to $110,000Fees: 2 percent loan origination fee
CommonBond offers student loans with fixed and variable rates and flexible repayment options. To qualify, you must be a U.S. citizen or permanent resident who is at least 16. You also must be an attendee or a graduate of a Title IV college. Additionally, there tools on the site to help you determine how much to borrow and which repayment option is best for your needs.
Plus, CommonBond allows you to postpone payments to help you get back on track if you run into financial difficulties. And, with every loan, CommonBond offers a one-to-one promise for educational help directed at children in developing countries.
Rates accurate as of Nov. 1, 2017.