Last Updated: December 3, 2023
If savings, scholarships, and grants aren’t enough to fully fund your college education, you might be considering taking out a private student loan. While you want to make sure that you’re getting the best deal possible, it’s also important to ensure that you’re minimizing your student loan debt by working with a reputable lender.
Securing a student loan with reasonable interest rates and borrower-friendly loan repayment terms will allow you to invest in your future, knowing that you won’t be saddled with unreasonable debt after you graduate.
So where can you get the best deal on a private undergraduate or graduate student loan? 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:
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.
Why Get a Student Loan from Sallie Mae?
Students and families can invest in their education with private education loans designed to responsibly bridge the gap between personal resources and federal student aid.
Private education loans:
Sallie Mae is committed to serving their borrowers so they can successfully pay their loans and build their credit.
Key features of Smart Option Student Loan® from Sallie Mae:
Important: Remember, most rising college students do not have enough of a credit history or consistent income to quality for a loan on their own.
Applying with a cosigner can help get you over that hurdle. Or, if you can’t qualify with your current cosigner, consider asking someone else. Keep in mind that cosigners do not have to be parents, guardians, or relatives. Even if you can qualify for a loan on your own, applying with a cosigner may get you a lower interest rate.
A good student loan should have a few key elements, including:
Having a variety of payment plans to choose from means that you can select an option that will set you up for success. 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 after graduation means that you’re not obligated to start making full payments on your loan right away. Lenders usually offer a six-month grace period after graduation or after your enrollment drops to half-time.
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 their obligation after you’ve established your own positive credit history and made a certain number on of-time payments. It's a great way to thank your cosigner for their help.
Many lenders offer reduced interest rates to qualified borrowers. For example, signing up for autopay can often yield a discount of 0.25 percentage points. That quarter of a percent can save you a lot of money over the life of your loan.
Most providers determine loan eligibility based on a defined set of characteristics that paint a picture of your credit worthiness.
What are banks looking for, specifically? To give you an idea, here’s what our preferred lenders typically evaluate when considering a new loan.
True student loan costs can be broken down in several ways.
The first and most-obvious thing to consider are fees, which are one-time charges that are usually attached to a specific service. For example, some lenders charge an application fee or an origination fee, which is typically a percentage of the loan value. Note: None of our recommended lenders charge application or origination fees.
Next, you’ll want to look at penalties. Some lenders may charge a penalty for early prepayment. There may also be penalties for late or missed payments. Note: None of our preferred lenders charge early pre-payment fees, which is one major reason we’re happy to recommend them.
Finally, 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 you’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:
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:
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 & you may get a lower interest rate, and
2.) If you apply through Nitro, any loan application fees will be waived.
Just like federal student loans, private student loans can help bridge the gap between grants, scholarships, and the price of college tuition. However, when you apply for student loans, whether or not you get the interest rate, loan term, and loan amount you need is completely dependent on your credit check.
Before you are approved for a private student loan, you are subjected to a credit check. The credit check will reveal your credit score, existing debt, and repayment history. With good credit, you'll likely get a favorable interest rate and loan term.
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.
There are a few different private student loan types: undergraduate loans, graduate school loans (including law school and medical school loans), parent loans, and technical school loans.
Each loan type has different interest rates, minimum loan amounts, maximum loan limits, and loan terms. Loans for graduate programs like law school and medical school usually have higher maximum loan limits while loans for shorter programs tend to offer the lowest minimum loan amounts.
Some banks may charge an application fee. However, all application fees are waived if you apply through Nitro.
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.
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.
Federal student loans are issued by the government, while private loans are offered by a variety of sources, including credit unions, online lenders, and banks. Federal student loans typically 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, as federal loans are eligible for financial protections like loan forgiveness programs, forbearance, and income-based repayment plans.
Moreover, some federal student loans are subsidized, meaning that the government pays interest while you are still in school. Private student loans are typically unsubsidized loans, meaning that interest starts accruing right away.
The two types of private loan interest rates are fixed-rate and variable-rate. The interest rate on fixed-rate loans won't change for the duration of your loan, while the interest rate on variable-rate loans can rise and fall with the market.
The perk of variable-rate loans is that their interest rates can start lower and remain lower than fixed-rate loans throughout the life of the loan. This is not a guarantee, however, as interest rates can also rise above those of fixed rate loans, increasing your monthly payment and overall loan amount.
Fixed interest rates are generally a safer bet for student loan borrowers, 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 lender's 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.