Last Updated: 12/01/2019
If savings, scholarships, and grants aren’t enough to fully fund your college education, you might be considering taking out a private student loan. If so, it’s wise to do some research first. While you want to make sure that you’re getting the best deal possible, it’s also important to ensure that you’re working with a reputable lender.
Securing a loan with reasonable interest rates and borrower-friendly repayment terms will allow you to invest in your future, knowing that you won’t be saddled with unreasonable debt after you graduate.
|Variable Rates (APR) w/ Autopay|
|2.75% - 10.22%1||4.74% - 11.35%1||Undergrad||5-15 years3
|3.52% - 9.50%1||5.45% - 9.74%1||Undergrad & Graduate||5, 10 & 15 years
|2.84% - 10.97%1||4.54% - 11.98%1||Undergrad, Graduate & Parent||5, 8, 10, & 15 years3
|3.22% - 12.54%1||4.21% - 13.12%1||Undergrad & Graduate||5, 10 & 15 years4
|2.73% - 10.07%1||4.40% - 11.35%1||Undergrad, Graduate & Parent||5, 10 & 15 years
Rate & Repayment Examples
|3.84% - 10.56%1||4.99% -10.49%1||Undergrad & Graduate||10 years
So where can you get the best deal on a private student loan for college? Which lenders have the best rates and terms? And which lenders can you trust?
At Nitro, we have relationships with several lenders that we’ve put through an intensive vetting process. We have researched and compared:
Let’s talk about what you should look for in a loan.
A variety of payment plans, so you can structure repayment terms in a way that will allow you to pay off your loan in affordable monthly installments without racking up additional debt. For example, if you’re not able to make full payments while you’re in school, making interest-only payments until you graduate can prevent additional interest from accruing and inflating the size of your loan.
A grace period is allowed by many lenders before you’re obligated to start making full payments on your loan after you’re no longer in school. Typically, the grace period is about six months after graduation or after your enrollment drops to half-time.
The ability to release your cosigner. A recent article in U.S. News & World Report states that up to 94% of recent college loan applicants applied with a cosigner. The reason for that is simple: few incoming college students have the credit history to qualify for a loan on their own. Most reputable lenders will allow you to release your cosigner from his or her obligation after you’ve established your own positive credit history and made a certain number on of-time payments.
Discounts. Many lenders offer discounted interest rates to qualified lenders. For example, signing up for autopay can often yield a discount of 0.25 percentage points. While it may not seem lik e a big discount, that quarter of a percent can save you a lot of money over the life of your loan.
|Interest Rate Discounts|
|0.25 percentage point deduction for auto debit1||No||Pay now or later: Make interest payments, pay a fixed $25 payment,3 or defer payments until after school.1||Yes4||6 months1|
|Auto-Pay (0.25%)1||No||Immediate repayment, interest-only, fixed monthly payments in school, fully deferred||Yes||6 months|
|Auto-Pay (0.25%)1||No||Flat Payment (In-School), Full (principal & interest), Deferred, & Interest-only||Yes||6 months|
|0.25% for enrollment in automatic debit5||No||In-School interest only, Deferred, and $25 minimum payment||Yes10||6 months|
|Yes8||Full (principal & interest), Deferred, Interest-only, Immediate-Repayment10||Yes4||6 months|
|Auto-Pay (0.25%)3||No||Full payments (Principal and Interest)||Yes||6 months|
What are banks looking for, specifically? To give you an idea, here’s what our preferred lenders typically evaluate when considering a new loan.
|Max Loan Limits|
|$1,000||Up to 100% of school-certified expenses5||Yes||Yes|
|$3,000||Up to cost of attendance (or $200K)||No min||Yes||Yes|
|$1,0002||$80,000 (Up to 100% of school-certified Cost of Attendance2||$35,000/year||Yes||Yes|
|$2,000||$200,000||Cosigner minimum gross annual income of $24,000||Yes*||Yes|
|$2,000||Up to 100% of school-certified Cost of Attendance||$15,000/year||Yes||Yes|
The first and most-obvious thing to consider are fees, which are one-time charges that usually attached to a specific service. For example, some lenders charge an application fee.
Next, you’ll want to look at penalties. Some lenders may charge a penalty for early pre-payment. There may also be penalties for late or missed payments. Note: None of Nitro’s preferred lenders charge fees or penalties as listed in the table below, which is one major reason we’re happy to recommend them. Only penalty to consider is missed payments.
Then, you’ll want to look at the largest cost of all: interest rates. Interest is how you pay the bank for giving you the loan. Interest is charged monthly, based on the annual percentage rate of your loan, or APR. The higher the APR, the most y ou’re going to pay every month, and ultimately, over the life of the loan. A fixed interest rate means that you’ll pay the same amount of interest for the life of the loan. A variable interest rate may fluctuate based on market conditions, meaning that your payments may increase or decrease over time.
Here’s how our preferred lenders stack up:
|Variable (APR)||Variable (APR)2.75% - 10.22%1
4.74% - 11.35%1
|3.75% - 9.40%1||5.00% -11.62%2||No origination or disbursement fees|
|Fixed (APR)||Fixed (APR)4.74% - 11.35%1||5.50% - 10.23%1||5.49% - 12.87%2|
|Variable (APR)||Variable (APR)3.52% - 9.50%1
5.45% - 9.74%1
|3.52% - 9.50%1||N/A||None|
|Fixed (APR)||Fixed (APR)5.45% - 9.74%1||5.40% - 9.74%1||N/A|
|Variable (APR)||Variable (APR)2.84% - 10.97%1
4.54% - 11.98%1
|4.45% - 10.97%1||4.63% - 19.53%1||None|
|Fixed (APR)||Fixed (APR)4.54% - 11.98%1||5.20% - 11.68%1||6.50% - 11.56%1|
|Variable (APR)||Variable (APR)3.22% - 12.54%1
4.21% - 13.12%1
|3.22% - 12.54%1||N/A||None|
|Fixed (APR)||Fixed (APR)4.21% - 13.12%1||4.21% - 13.12%1||N/A|
|Variable (APR)||Variable (APR)2.80% - 10.91%1
4.72% - 12.04%1
|2.75% - 10.07%1||4.35% - 7.49%5||None|
|Fixed (APR)||Fixed (APR)4.72% - 12.04%1||4.64% - 11.35%1||5.48% - 8.52%5|
|Variable (APR)||Variable (APR)3.84 - 10.56%1
4.99% - 10.49%1
|3.84 - 10.56%1||N/A||None|
|Fixed (APR)||Fixed (APR)4.99% - 10.49%1||4.99% - 10.49%1||N/A|
Hopefully some of the charts in this article have given you some insight into how different lenders compare. But there’s more to a loan than just crunching numbers. As we mentioned before, working with a reputable lender is key to ensuring that you’re getting a loan that you’ll be able to pay back.
Sallie Mae® has developed a wide range of private education loans, and other education-related services to help make students' dreams of higher education a reality.
Key features of Smart Option Student Loan® from Sallie Mae:
College Ave is one of the newest and most-innovative lenders in the private student loan marketplace. The company was founded by veterans of the student loan business who wanted to make student loan process more transparent and flexible.
Key features of a student loans from College Ave:
CommonBond entered the student loan marketplace five+ years ago with a novel idea: bring the concept of crowdsourcing to college loans. The idea quickly garnered attention from investors and CommonBond took off.
Key features of a private student loans through CommonBond:
It’s wrong to lose your financial freedom before you’ve even had a chance to earn it! To help you borrow responsibly, Ascent has incorporated financial education into their application process and give you exclusive access to tools to help you manage your money.
Citizens One is an established bank with a solid history in student lending. This lender also ranks high on the “feel good” scale, as it prioritizes charitable giving and offers financial literacy education in the communities where it does business.
Key features of a student loan from Citizens One:
LendKey is one of the most exciting new players in the student loan space. It connects borrowers with smaller, local banks and credit unions around the country, giving you access to potentially great deals that might not otherwise be on your radar screen.
Key features of a student loan from LendKey:
Apply now and find out your personalized rates with:
** Remember the following two items **
1.) if you apply with a cosigner, you may increase your chances of getting approved for a loan & may get a lower interest rate, and
2.) if you apply through Nitro, any loan application fees will be waived.
Q. What do I need to apply?
For most student loans, you can apply online within a matter of minutes if you have the right documentation on hand. The information you might want to have at the ready includes:
Note: If you’re applying with a cosigner, you’ll need the above info as it pertains to him or her as well.
Q: What else do I need to think about when applying for student loans?
Before applying for private student loans, be sure to fill out the Free Application for Federal Student Aid, otherwise known as FAFSA. Doing so will help determine your eligibility for federal grants and loans, as well as some scholarships. Accept all of your grant and scholarship money, followed by federal loans, before applying for private student loans. Then, use our free NitroScore tool to determine how much money you need to borrow before applying for loans.
Q: Does it cost money to apply for a private student loan?
Some banks may charge an application fee. However, all application fees are waived if you apply through Nitro.
Q: How long does it take to get approved for a student loan?
Most lenders will require certain kinds of documentation, including your (and your cosigner’s) social security number, address, and employment or income info. If you have your paperwork in hand, it should take about 15 minutes to go through the application process. Some banks may approve you within a few minutes. If you have to provide additional documentation, that process may take several days.
Q: What’s the difference between a federal student loan and a private student loan? Is one better than the other?
Federal student loans are issued by the government and often feature lower interest rates than loans offered by private lenders. It’s a good idea to utilize all federal loan money that’s offered to you before applying for private student loans.
Q: Should I opt for a variable or fixed interest rate?
A fixed interest rate will remain the same for the life of the loan. A variable interest may fluctuate based on market conditions. That may affect your monthly payment, as well as your overall loan amount. Fixed interest rates are generally a safer bet, although finding a good deal on a variable rate might make sense if you’re only taking the loan for a short period of time, or if interest rates are expected to fall.
Disclaimer: NitroCollege.com is a free website designed to help students and their families evaluate how to responsibly pay for their college education. Before recommending any services we put lenders thru a vetting process that includes: the competitiveness of rates, repayment options and terms, any discounts offered, any fees or penalties to be aware of, responsiveness to customers and applicants, and the lenders overall reputation and history. Nitro is not a lender and is not involved in the private student loan approval process, nor do we make credit related decisions. The lenders profiled on our site are the ones who will issue and approve your private student loan applications. We will sometimes earn a bounty for recommending various products and services to you. Actual interest rates may vary depending on your credit score, income, savings, type of degree, and whether you apply with a cosigner. Here at Nitro we strive to provide the most up-to-date information, but you should always check with individual lenders for current rates, terms, and conditions before applying for private student loans.