Featured Partner Offers
College Ave
4.24% to 17.99%¹
2.89% to 17.99%¹
Sallie Mae
4.37% to 16.99%
2.89% to 17.49%
Ascent
4.34% to 15.25%*
2.89% to 15.61%*
Compare the Best Private Student Loans of 2025
Best Private Student Loans of 2025: A Closer Look
Best Private Student Loan for Flexible Payment Terms
Ascent
Fixed APR
Starting at 2.89%
Minimum Credit Score
Not disclosed
Starting at 2.89%
Not disclosed
Ascent stands out for offering multiple payment terms and serving a diverse audience, including international students who apply with an eligible co-signer. Six loan term options are available, so you can design a loan payoff timeline that best fits your budget.
Why We Like It
We love that Ascent offers several repayment plans, including the progressive repayment option, which starts with a lower payment that gradually increases.
Undergraduate and graduate borrowers also get a nine-month grace period before payments begin, and dental and medical graduates get a 12-month grace period.
What We Don’t Like
Interest rates are high for borrowers who don’t apply with a co-signer.
Who It’s Best For
Ascent student loans are best for borrowers with co-signers looking for flexible repayment terms and longer payment grace periods than competing products.
- Payment grace periods of nine to 36 months
- Forbearance available for up to 24 months
- Co-signer release available after 12 months
- Loans without a co-signer may have significantly higher rates
- Unclear minimum credit requirements
- 5% origination fee for career training loans
Loan terms
Five, seven, 10, 12 or 15 years; see repayment examples for more details.
Loan amounts
$2,001** up to total cost of attendance, to a maximum of $200,000 per academic year ($200,000 aggregate) for undergraduate loans and $400,000 for graduate loans
Forbearance options
Up to 24 months of forbearance for financial hardship, available in increments of three months.
Co-signer release policy
Co-signer release may be available after 12 consecutive and on-time loan payments.
*Disclosure
*Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations, terms and conditions may apply for Ascent’s Terms and Conditions please visit AscentFunding.com/Ts&Cs. Annual Percentage Rates (APRs) displayed above are effective as of 9/8/2025 and reflect an Automatic Payment Discount (ACH). The ACH discount consists of 0.25% on credit-based college student loans submitted prior to 6/1/2025, a 0.5% discount for on credit-based college student loans submitted on or after 6/1/2025 and a 1.00% discount on outcomes-based loans when you enroll in automatic payments. Loans subject to individual approval, restrictions and conditions apply. Loan features and information advertised are intended for college student loans and are subject to change at any time. For more information, see repayment examples or review the Ascent Student Loans Terms and Conditions. The final amount approved depends on the borrower’s credit history, verifiable cost of attendance as certified by an eligible school and is subject to credit approval and verification of application information. Lowest interest rates require full principal and interest (Immediate) payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the examples above, based on the amount of time you spend in school and any grace period you have before repayment begins. Variable rates may increase after consummation.1% Cash Back Graduation Reward subject to terms and conditions. For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits. Ascent applicants and borrowers that agree to the AscentUP Terms of Service and Privacy Policy, as well as students associated with an Ascent parent loan application, have access to the AscentUP platform.
**The minimum amount is $2,001, except for the state of Massachusetts. The minimum loan amount for borrowers with a Massachusetts permanent address is $6,001.
Best Private Student Loan for Co-Signers
Earnest
Fixed APR
Starting at 2.89%
(with autopay discount)
Minimum Credit Score
650
Variable APR
4.99% to 16.85%
(includes .25% auto pay discount)¹
Starting at 2.89%
(with autopay discount)
650
4.99% to 16.85%
(includes .25% auto pay discount)¹
Earnest offers some of the lowest interest rates on the loan market for students applying with a creditworthy co-signer. Plus, Earnest serves many types of borrowers, including international, DACA and graduate students.
Why We Like It
We like that interest rates for co-signed student loans start at just 2.89% APR, and Earnest promises to match your rate if you get a better rate with another lender.
Borrowers also get a nine-month grace period before loan payments are due compared to the typical six-month grace period offered by most other private and federal loans.
What We Don’t Like
Borrowers must have at least three years of credit history to qualify, which is a requirement young adults may not be able to meet fresh out of high school.
Who It’s Best For
Earnest is best for borrowers with good credit or access to a creditworthy co-signer because co-signed loans offer the lowest interest rates.
- Provides rate match guarantee
- Forbearance available for up to 12 months
- No fees, including no late fees
- Co-signer release not available
- At least fair credit necessary to qualify
Loan terms
Five, seven, 10, 12 or 15 years
Loan amounts
$1,000 up to the total cost of attendance with a $400,000 lifetime limit
Forbearance options
Up to 12 months of forbearance may be available.
Co-signer release policy
Co-signer release isn’t available. You have to refinance the loan to remove a co-signer.
Disclosures
¹You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.
²Earnest clients may skip one payment every 12 months. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Please be aware that a skipped payment does count toward the forbearance limits. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
³Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
⁴Earnest’s Loan Cost Examples: These examples provide estimates based on principal and Interest payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 15-year term (180 monthly payments of $118.28) and a 11.69% APR would result in a total estimated payment amount of $21,290.40. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $126.82) and a 13.03% APR would result in a total estimated payment amount of $22,827.79.
These examples provide estimates based on interest only payments while in school. Variable APR: A $10,000 loan with a 15-year term (180 monthly payments of $145.41) and a 11.69% APR would result in a total estimated payment amount of $26,173.03. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $156.59) and a 13.03% APR would result in a total estimated payment amount of $28,186.67. Your actual repayment terms may vary. Other repayment options are available.
These examples provide estimates based on fixed $25 payments while in school. Variable APR: A $10,000 loan with a 15-year term (180 monthly payments of $169.92) and a 11.69% APR would result in a total estimated payment amount of $30,584.74. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $188.42) and a 13.03% APR would result in a total estimated payment amount of $33,915.55. Your actual repayment terms may vary. Other repayment options are available.
These examples provide estimates based on deferred payments. Variable APR: A $10,000 loan with a 15-year term (180 monthly payments of $174.79) and a 11.69% APR would result in a total estimated payment amount of $31,462.16. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $193.75) and a 13.03% APR would result in a total estimated payment amount of $34,874.28. Your actual repayment terms may vary. Other repayment options are available.
⁵Loan Eligibility criteria: Eligible students must: 1) For college Freshmen, Sophomores and Juniors, attend, or be enrolled to attend, a Title IV school full-time. For college Seniors and Graduate students, attend, or be enrolled to attend, a Title IV school at least half-time; and 2) be pursuing a Bachelor’s or Graduate degree. Earnest private student loans are subject to credit qualification, completion of a loan application, verification of application information, self-certification of loan amount, and school certification.
Responsible borrowing tip: Explore all scholarship, grant and federal options before applying for a private loan.
Earnest Private Student Loans are made by One American Bank, Member FDIC, or FinWise Bank, Member FDIC. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Finwise Bank, 756 East Winchester, Suite 100, Murray, UT 84107.
Earnest loans are serviced by Earnest Operations LLC, 300 Frank H. Ogawa Plaza, Suite 340, Oakland 94612. NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770) One American Bank, FinWise Bank, and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.
© 2025 Earnest LLC. All rights reserved.
Best Private Student Loan for Quick Applications
ELFI
Fixed APR
Starting at 2.99%
Minimum Credit Score
680
Starting at 2.99%
680
With a speedy prequalification and application process, Education Loan Finance (ELFI) is our top pick for borrowers who want a fast application process. ELFI borrowers can also access student loan advisors who can answer questions about education financing.
Why We Like It
In addition to competitive rates, we like that ELFI offers loan forbearance of up to 12 months if borrowers face financial difficulty.
What We Don’t Like
When applying without a co-signer, you need at least three years of credit history for loan approval with ELFI, which could be a major barrier for recent high school graduates and young adults.
Who It’s Best For
ELFI loans are best for undergraduate, graduate and parent borrowers who value a quick application process and have a credit score of at least 680 or a creditworthy co-signer.
- Transparent eligibility requirements
- Forbearance available for up to 12 months
- One-on-one support from student loan advisors
- No co-signer release without refinancing
- Strong credit is necessary to qualify
Loan terms
Five to 15 years.
Loan amounts
Up to the maximum loan size approved by the school for qualified education expenses.
Forbearance options
Up to 12 months of forbearance for financial hardship or medical difficulty.
Co-signer release policy
Co-signer release is not available at this time.
Best Private Student Loan for Member Benefits
SoFi®
Fixed APR
Starting at 3.43%
Minimum Credit Score
Does not disclose
Starting at 3.43%
Does not disclose
SoFi stands out from the pack by providing exclusive member benefits, such as family rate discounts, rewards opportunities and access to financial advice from certified advisors.
Why We Like It
We love that SoFi charges no fees, including no late, insufficient funds, origination or prepayment penalty fees. Borrowers can also lock in savings by securing the 0.25% autopay discount. Plus, if the applicant or co-signer is a current SoFi customer, new student loans qualify for another 0.125% rate discount.
What We Don’t Like
SoFi offers co-signer release, but you must make 24 on-time loan payments before applying.
Who It’s Best For
SoFi student loans are best for borrowers who value customer experience and extra perks. On top of rate discounts, members get extra bells and whistles like expedited access to SoFi stadium, invitations to social events and referral bonuses.
- Cash-back rewards, bonuses and rate discounts
- Co-signer release available after 12 months
- No fees, including no late fees
- Unclear forbearance options
Loan terms
five, seven, 10 and 15 years.
Loan amounts
.
Forbearance options
SoFi may offer forbearance and payment relief if you face hardship, but it doesn’t outline specific options unless you contact the lender.
Co-signer release policy
Co-signers may be eligible for release after borrowers make 12 on-time scheduled payments.
*Disclosures
* Interest Rates: Eligibility and Important Details. Fixed rates range from 3.43% APR to 15.99% APR with 0.25% autopay discount. Variable rates range from 4.64% APR to 15.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates are capped at 17.95%. SoFi rate ranges are current as of 9/3/2025 and are subject to change at any time Your actual rate will be within the range of rates listed above and will depend on the term and type of repayment option you select, evaluation of your creditworthiness, income, presence of a co-signer (if applicable) and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. Check out our eligibility criteria at https://www.sofi.com/eligibility-criteria/. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
Best Private Student Loan for Payment Assistance Options
Custom Choice
Variable APR
4.19% to 16.39%
Fixed APR
3.24% to 15.71%
Minimum Credit Score
Not required
4.19% to 16.39%
3.24% to 15.71%
Not required
Custom Choice shines for letting borrowers lock in rate quotes for 30 days with only a soft credit check, which doesn’t impact your credit. Borrowers may also be eligible for multiple payment relief options during repayment.
Why We Like It
Custom Choice offers payment assistance for borrowers impacted by a national disaster or unemployment. Unemployment protection is available in two-month increments for a maximum of 12 months. In addition, Custom Choice provides rewards to borrowers upon graduation that can reduce their principal balance by 2%.
What We Don’t Like
Custom Choice only offers a co-signer release after you make 36 on-time loan payments; this is longer than most lenders.
Who It’s Best For
Custom Choice is best for borrowers who want payment assistance as a safeguard. Borrowers wanting to pay debt aggressively should also consider Custom Choice, as the graduation reward can help reduce the loan balance.
- Provides discounts for using autopay
- Offers a graduation reward of 2% reduction in the loan principal
- Charges no late fees
- Co-signer release is not available until after 36 consecutive on-time payments
Loan terms
Seven, 10 or 15 years
Loan amounts
$1,000 to $99,999 annually ($180,000 aggregate limit)
Eligibility
Borrowers must be U.S. citizens, permanent residents or eligible non-citizens (DACA recipients). Eligible non-citizens must apply with a creditworthy co-signer who is a U.S. citizen or permanent resident.
Forbearance options
Forbearance is available in increments of up to two months with a 12-month cap over the life of the loan.
Co-signer release policy
Co-signer release is available after 36 consecutive on-time principal and interest payments.
Best Private Student Loan for Multi-Year Loans
College Ave
Variable APR
4.24% to 17.99%¹
with auto-pay discount*
Fixed APR
2.89% to 17.99%¹
with auto-pay discount*
4.24% to 17.99%¹
with auto-pay discount*
2.89% to 17.99%¹
with auto-pay discount*
College Ave shines for offering a multi-year loan feature that assures loan approval for several years of financing. According to College Ave, 90% of undergraduates approved with a co-signer are able to get approved for subsequent school years.
Why We Like It
College Ave has a large portfolio of products for students pursuing advanced degrees that require many years of schooling, such as law, business or medical degrees. After leaving school, College Ave loans may be eligible for payment grace periods of up to 36 months.
What We Don’t Like
College Ave charges late fees, and interest rates may be high if you don’t have strong credit.
Who It’s Best For
College Ave is best for borrowers shopping for education financing to cover many years of school. Law, MBA and medical school students who’ve exhausted federal loan options should also consider what College Ave offers.
- Multiple loan options, including parent loans and loans for specialized professions
- Interest rate discounts for using autopay
- Prequalification without a hard credit check
- Late payment fees
- No co-signer release until halfway through the loan term
Loan terms
Five, eight, 10 and 15 years, depending on the degree
Loan amounts
$1,000 up to 100% of the school-certified cost of attendance
Eligibility
There’s no minimum credit score for borrowers who use co-signers, but co-signers must have a minimum credit score in the mid-600s.
Forbearance options
Forbearance is available for up to 12 months in three- to six-month increments.
Co-signer release policy
Co-signer release is available at the midpoint of the loan term. For example, if you have a 10-year loan term, your co-signer may be eligible for release after five years.
*The most creditworthy applicants who choose the shortest repayment term available and who make full monthly payments while in school qualify for the lowest rates.
Disclosures
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
- (1)All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
- (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
- (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 08/11/2025. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
Best Private Student Loan for Lowest Maximum APR
Rhode Island Student Loan Authority
Variable APR
N/A
Fixed APR
3.85% to 8.99%
N/A
3.85% to 8.99%
Rhode Island Student Loan Authority (RISLA) provides less flexible loans than other lenders, with only 10- and 15-year terms available. However, rate caps are low, making it an option worth considering if those two terms fit your goals.
Why We Like It
Along with low rates, RISLA offers rewards of up to $2,000 in loan forgiveness for interns, and nurses may be eligible for four years of no interest. When facing hardship, RISLA borrowers may qualify for income-based repayment plans or up to 24 months of forbearance.
What We Don’t Like
RISLA loans don’t offer much in terms of customizability since there are only two loan term options. Further, the maximum you can borrow is $50,000 per year, which may not be enough for those pursuing advanced degrees.
Who It’s Best For
RISLA is best for borrowers looking for a traditional 10-year term loan and have sufficient personal income or a creditworthy co-signer to land low APRs.
- Low interest rates compared to competitors
- Co-signer release available after 24 consecutive months of on-time payments
- Interest rate discounts for using autopay
- Requires a minimum income of $40,000 per year
- Students are limited to borrowing $1,500 to $50,000 per year, with a $180,000 aggregate limit per borrower
Loan terms
10 and 15 years
Loan amounts available
$1,500 to $50,000 per year, with a $180,000 aggregate limit per borrower
Eligibility
Applicants or co-signers must show a minimum income of $40,000 per year and a minimum credit score of 680.
Forbearance options
Forbearance is available for up to 24 months.
Co-signer release policy
Co-signer release is available after 24 consecutive months of on-time payments. Periods during which borrowers use income-based repayment do not qualify.
Best Private Student Loan for Repayment Options
Sallie Mae
Variable APR
4.37% to 16.99%
Fixed APR
2.89% to 17.49%
4.37% to 16.99%
2.89% to 17.49%
Sallie Mae is a veteran in the student lending space, providing loans to finance undergraduate and graduate degrees plus certificate programs in professional studies, such as culinary arts and aviation.
Why We Like It
Borrowers can choose from low-payment options, including deferment while in school or interest-only payments for 12 months once the post-graduation grace period ends. Borrowers who fall behind on payments may also be eligible for loan modifications, payment extensions or reduced payments to get back on track.
What We Don’t Like
Sallie Mae currently offers no way to check interest rates without a hard inquiry, which temporarily dings your credit score.
Who It’s Best For
Sallie Mae student loans are best for borrowers who could benefit from low payments while job hunting and career climbing after graduation.
- Loans are available for students enrolled less than half-time
- Co-signer release after just 12 months of on-time payments
- Interest rate discounts for using autopay
- Borrowers can’t prequalify without a hard credit check
- Late payment fees
Loan terms
10 to 20 years
Loan amounts
$1,000 up to 100% of the school-certified cost of attendance
Eligibility
Sallie Mae offers private student loans to eligible U.S. citizens and permanent residents. Further, international and DACA students residing in and attending U.S. schools may qualify with a creditworthy cosigner who is also a U.S. citizen or permanent resident.
Forbearance options
Sallie Mae can postpone payments during financial hardship and military service.
Co-signer release policy
Co-signers may be eligible for release after the borrower makes 12 on-time principal and interest payments.
Best Private Student Loan for No Co-signer Loans
Nelnet
Fixed APR
Starting at 3.47%
Minimum Credit Score
mid to high 600
Starting at 3.47%
mid to high 600
Nelnet Bank is backed by the loan servicer Nelnet and offers private student loans and parent loans for borrowers who meet credit requirements.
Why We Like It
Sometimes, loan eligibility conditions can be vague, and we like that Nelnet clearly defines its credit requirements if you don’t have a co-signer. You need a minimum credit score in the mid-to-high 600s to be eligible without a co-signer.
What We Don’t Like
Netlnet Bank’s website mentions payment assistance may be available but doesn’t explain the options. Borrowers struggling with payments must contact the lender to discuss arrangements.
Who It’s Best For
Nelnet Bank is best for borrowers applying without a co-signer who can show proof of stable income and decent credit. However, you might need to look elsewhere if you want a range of repayment options like income-based repayment.
- High loan limits
- Co-signer release available after 24 months
- Unclear forbearance options
- Late payments incur late fees
Loan terms
Five to 25 years, depending on your loan amount and repayment plan.
Loan amounts
$1,000 up to $125,000 for undergraduate loans; $175,000 for graduate, MBA or law degree loans; and $500,000 for graduate health degree loans.
Forbearance options
Payment relief options may be available if you need assistance with your payments; however, borrowers must contact the lender directly for details.
Co-signer release policy
Co-signer release may be available after 24 consecutive on-time payments.
Best Private Student Loan for Rate Discounts
Citizens Bank
Fixed APR
Starting at 3.24%
Minimum Credit Score
640
Starting at 3.24%
640
Citizens Bank is our top pick for rate discounts since student loans come with combinable discount opportunities that can drive down your monthly payments and long-term costs.
Why We Like It
Citizens Bank offers a discount of 0.25% for using autopay, which is pretty common across student loan lenders. However, you can get another 0.25% discount (for a total of 0.50%) if you or your co-signer has an eligible Citizens Bank account open at the time of application.
What We Don’t Like
Citizens Bank requires 36 months of on-time payments for co-signer release and charges late fees if you make late payments.
Who It’s Best For
Citizens Bank student loans are best for existing customers or applicants willing to open a bank account before applying to receive the maximum rate discount.
- Autopay and customer loyalty discounts
- Forbearance available for up to 12 months
- 36 payments needed for co-signer release
- Late payments incur late fees
Loan terms
Five, 10 and 15 years .
Loan amounts
Up to 100% of the maximum qualified loan limit or the total cost of education. Aggregate limits are $225,000 for undergraduate and graduate degrees, $300,000 for M.B.A. and law degrees and up to $400,000 for healthcare degrees.
Forbearance options
Up to 12 months of forbearance for the life of the loan .
Co-signer release policy
Co-signer release may be available after 36 consecutive on-time payments.
Most Popular is calculated from the number of times each affiliate product was selected by Forbes users over a six month time period.
Current Average Student Loan Interest Rates
Private student loan lenders typically set interest rates using a benchmark like the Secured Overnight Financing Rate (SOFR). The SOFR tends to align with the federal funds rate set by the Federal Reserve.
Below are average rates for 10-year fixed-rate loans and 5-year variable-rate loans.
Note that several factors determine your rate, including income and credit history. Typically, you’ll receive a lower rate with a higher credit score and sufficient income.
Student Loan Interest Rate Trends
Most private student loans are heavily credit-based. That means a lender will determine your interest rate based on the strength of your (or your co-signer’s) credit.
However, other factors may be considered for approval as well, such as your school and degree program. In some cases, lenders even offer non-credit-based loans that put a greater focus on your GPA and other education factors if you have limited credit.
Below are current interest rate trends for five-year and 10-year loans.
How Do Student Loans Work?
Student loans can be used to pay for many school-related expenses, including tuition, room and board, books and school supplies, transportation and other common expenses.
Once your loan application is approved, the funds are disbursed to the school to cover your balance. You can often defer repayment until after leaving school, but interest may start accruing immediately.
Federal vs. Private Student Loans
Student loans are either federal or private loans. Below, we break down some of the key differences between the two loan types.
| FEDERAL LOANS | PRIVATE LOANS | |
|---|---|---|
| Lender | U.S. Department of Education | Private lenders |
| Application process | Apply for loans using the Federal Application for Federal Aid (FAFSA); no credit check required, unless applying for PLUS loans | Apply for loans through private lenders; credit check required, and approval is based on creditworthiness |
| Origination fees | 1.057% for direct subsidized and unsubsidized loans
4.228% for direct PLUS loans | Low fees or no fees |
| Interest rates | Fixed rates set by Congress | Fixed and variable rates set based on creditworthiness |
| Borrower protections | Protections available to all qualifying borrowers include
| Deferment, income-driven plans and forbearance programs vary by lender |
Many borrowers consider federal student loans first due to the protections and forgiveness programs. However, after you’ve exhausted options like scholarships and grants, along with federal aid, private student loans can help to fill any financial gaps.
What must borrowers consider when choosing between federal and private student loans?
Renée Earwood
Student Loans Expert, Federal Student Loan Debt Repayment Options Expert
Ryan Galliotto
Student Loans Expert
When choosing between federal and private student loans, borrowers should consider their financial situation and goals after graduation. Creating a mock budget that includes anticipated starting salary, monthly living expenses, future financial goals and student loan repayment terms can help the borrower decide which lloan is best for them.
For example, borrowers who plan on entering professions or working for employers who qualify for a federal student loan forgiveness program may want to run a repayment analysis of the corresponding forgiveness program they may be eligible for and compare that to the terms of a private loan with regard to monthly repayment amount and total cost.
If a borrower isn’t sure whether they can afford their student loan payment after graduation, federal student loans tend to offer more flexible repayment plans based on income along with deferment and forbearance options. If a borrower doesn’t anticipate utilizing any of the federal student loan options and benefits and can find a lower interest rate with a private lender, then choosing a private student loan could be the best option for saving on the total cost of repayment.
Student Loans Expert, Federal Student Loan Debt Repayment Options Expert
Federal loans typically come with more “bells and whistles” than private loans, making them the more attractive option. These bells and whistles include better repayment options, forgiveness opportunities and easier approval odds, as a credit check isn’t necessary for most federal loans (aside from PLUS loans).
If a borrower is worried that they may not be able to keep up with their payments after graduation, federal loans make sense since they’ll have access to better repayment options than private loans offer. Also, if they think they’ll work in the nonprofit space for at least 10 years, they can potentially have their federal loans forgiven via the Public Service Loan Forgiveness (PSLF) program.
It should also be noted that any borrower, regardless of where they work, who has federal loans being paid back on income-driven repayment plans can have their remaining balances forgiven after 20-25 years, depending on which plan they are on.
For these reasons, I typically recommend that borrowers max out their federal loan amounts first, then, if needed, take out private loans. You can always refinance your federal loans down the road (making them private loans), but you can’t transfer private loans to the federal system.
Student Loans Expert
Pros and Cons of Private Student Loans
Borrowing a private student loan has its advantages, but there are also potential downsides. Consider these pros and cons before you apply.
Pros
- Fills in the gaps when you’ve maxed out financial aid. You can use private student loans to pay for tuition, fees, supplies, groceries, rent or other costs.
- May be able to borrow up to your school’s full cost of attendance. By contrast, some federal student loans come with borrowing limits.
- Low interest rates may be available for excellent credit. Creditworthy applicants may access low fixed and variable interest rates.
- Provides funding for international students. International students aren’t eligible for federal student loans or financial aid but can qualify for a private student loan.
Cons
- May require a co-signer. Most undergraduates have to apply with a co-signer, such as a parent, to get approved for a loan.
- Interest rates could be high. Interest rates may exceed 17%, resulting in high borrowing costs.
- Not as many protections as federal student loans. Federal student loans are eligible for various benefits, including income-driven repayment, deferment and forbearance. Private student loans may or may not come with these protections.
- Don’t qualify for federal loan forgiveness. Private student loans aren’t eligible for federal forgiveness programs, such as Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness or the loan forgiveness you can receive at the end of an IDR plan.
How Much Will a Student Loan Cost You Up Front?
Some lenders charge origination fees to process your loan. This is typically a percentage of your loan amount that’s subtracted from what you borrow.
These fees vary widely with private lenders, and some lenders don’t charge them at all.
All federal student loans, on the other hand, charge an origination fee. For loans disbursed before October 1, 2025, the fees are 1.057% for direct subsidized and unsubsidized loans, and 4.228% for parent and graduate PLUS loans.
We asked Andrew Paulson, co-founder of StudentLoanAdvice.com and Forbes Advisor advisory board member, what borrowers should consider about fees when choosing a lender.
– Andrew Paulson, Forbes Advisor advisory board member
Other Student Loan Fees To Consider
Once you begin repaying your student loans, you may run into other costs, such as a late payment fee if you don’t make on-time payments.
On a positive note, student loan lenders and servicers are prohibited by federal law from charging a penalty fee if you make extra payments or if you pay off your student loans early.
Here’s a glance at the fees lenders charge from our list.
| LENDER | APPLICATION FEES | ORIGINATION FEES | DISBURSEMENT FEES | LATE FEES |
|---|---|---|---|---|
| Ascent | None | None | None | None |
| Earnest | None | None | None | None |
| ELFI | None | None | None | Late fees of 5% of the past due amount or $50, whichever is less, may apply if ELFI doesn’t receive any part of a payment within 10 days after the due date. |
| SoFi® | None | None | None | None |
| Custom Choice | None | None | None | None |
| College Ave | None | None | None | Late fees of 5% of the unpaid amount of the monthly payment, or $25, whichever is less, may apply if your payment isn’t received within 15 days of your due date. |
| Rhode Island Student Loan Authority | None | None | None | None |
| Sallie Mae | None | None | None | Late fees may apply, but Sallie Mae doesn’t disclose the specific amount online. |
| Nelnet | None | None | None | Late fees of 5% of the payment that was not paid in full when due or $25, whichever is less, may apply if your payment isn’t received within 15 days of your due date. |
| Citizens Bank | None | None | None | Late fees of 5% of the overdue amount may apply if your payment isn’t received within 15 days of your due date. |
Tips for Comparing Private Student Loan Companies
Do your due diligence as you prepare to borrow a private student loan. Experts recommend borrowing no more than what you’ll most likely earn in your first year out of college. This can protect you from having unmanageable monthly payments after you leave school.
When you review each lender and loan, consider the following factors:
Loan Amount
Loan Cost
Repayment Term
Borrower Benefits
Co-signer Release
When shopping around for a loan, make sure to review all loan features and not just interest rates. That’s because autopay discounts, good grade rewards, graduation cashback offers and borrower protections could help you save money and offer a safety net if you lose a job or face a reduction in income during repayment.
How To Get a Private Student Loan
Consider private loans if you’ve reached the annual or aggregate limits for federal student loans and need to borrow additional funds.
The private student loan application process can take several weeks or even months, so most lenders recommend applying at least two months before your tuition due date. Here’s how to apply for a private student loan:
1. Review your credit
2. Consider a co-signer
3. Gather supporting documents
4. Compare lenders
5. Choose an offer and apply
6. Sign your loan agreement
To get the best student loan interest rate, improve your credit score before applying or use a co-signer with a longer credit history and higher credit score. Many younger student borrowers have shorter credit histories and less diverse credit mixes than older adults, so most private student loans are co-signed.
If you’re a parent planning ahead for college costs and know you’ll be considering student loans, adding your child as an authorized user to a credit card will help improve their credit score. In the end, this can lead to them receiving lower interest rates.
Methodology
We scored 16 national lenders that make the most loans by volume across 15 data points in the categories of interest rates, fees, loan terms, hardship options, application process and eligibility. We chose the best lenders based on the weighting assigned to each category:
- Hardship options. 20%
- Interest rates. 20%
- Fees. 15%
- Application process. 15%
- Loan terms. 10%
- Eligibility. 10%
- Customer service. 10%
Specific characteristics taken into consideration within each category included number of months of forbearance available, economic hardship repayment options available beyond traditional forbearance, perks like cash-back rewards upon graduation, discounts, time to default, disclosure of credit score and income requirements and other factors.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Student Loans Rating & Review Methodology.
Frequently Asked Questions (FAQs)
Can I get a student loan without a co-signer?
It’s possible to get a student loan without a co-signer, but the difficulty of doing so depends on your situation.
Nearly every type of federal student loan does not require (or allow) co-signers. Because you don’t need a high credit score to qualify for these types of loans, most students are eligible without a co-signer if they can meet a few basic requirements.
Private student loans, however, may be harder to get on your own. These types of loans require a high credit score of at least 670 to qualify for the lowest rates. If you can’t qualify individually, you may need to add a co-signer to your application. However, some lenders offer a co-signer release after you meet certain requirements, so look for that feature as you compare your options.
Some private lenders specialize in student loans without a co-signer; instead of reviewing your credit, they may consider things like your performance in school and field of study instead. While it may be easier to qualify for these loans, they typically come with higher interest rates.
How much money can I borrow through private student loans?
The maximum amount you can borrow varies by lender. Some lenders allow you to borrow up to 100% of the school-certified cost of attendance—which considers tuition, fees, textbooks and room and board—while others have caps of $50,000 per year.
How long does it take to get a private student loan?
The amount of time it takes to get a private student loan will vary by lender, but expect it to take one to three weeks to receive your funds. Along with processing your application, the private lender will likely reach out to your school to confirm your cost of attendance. The lender may send your loan funds directly to your financial aid office, which will apply them to tuition and fees before sending the remaining funds over to you.
Do private student loans allow deferment or forbearance?
Some private student loans allow you to defer your loan payments while you are attending school, but interest still accrues on these loans. Some lenders may offer deferment for a financial hardship or during military deployment. Forbearance also lets you suspend payments for a certain period of time.
Regardless of whether payments are suspended payments through deferment or forbearance, the unpaid interest gets added to your principal, causing your monthly payments to increase once repayment begins again.
