The Top 10 Private
Student Loans of 2021

Searching for the right student loans is daunting for many students, as they are commonly associated with debt, which can be hard to deal with later in life. However, student loans are often the only way for most students to cover their various college expenses.

Most types of loans require a good credit score, but student borrowers often have weak credit history or none at all. Typically, federal student loans are the best option for borrowers who fall into this category, but private student loans are a viable alternative. In this article, we will tell you everything you need to know about the best private student loans of 2021.

What Are Private Student Loans?

Private student loans are offered by banks, credit unions, or online lenders instead of the federal government. Private student loans are a good option after you’ve explored scholarships, grants, and federal student loans. Federal student lenders often do not perform credit checks, but most private lenders do.

Unlike federal loans, private student loans require students to apply directly with the bank or lender, rather than with the Free Application for Federal Student Aid (FAFSA). Private loans usually allow students to borrow the full cost of attendance (COA), whereas federal loans have a borrowing limit. Having a co-signer may increase your chances of receiving the loan.

Can I Get a Private Student Loan with Bad Credit?

Yes, you can. While you should first look for federal student loans before exploring private ones, certain private lenders recognize that college students likely have poor credit or no credit at all. For the best private student loans, bad credit is no obstacle.

If you yourself have bad credit, you may require a co-signer or pay a higher interest rate due to your low Fair Isaac Corporation (FICO) score. It is a good idea to try and restore your credit while you’re in school by making payments on time and utilizing credit cards.

How Do I Apply for a Private Student Loan?

There are several factors to consider before applying for a private student loan, as lenders differ in several ways. You should do your research to find the right lender. You can start by finding out whether your school offers a private lender list and confirming that the lender works with your program and level of study.

You should also ask friends, family, and school counselors to recommend lenders. Once you have several choices, you should compare the perks and disadvantages that each lender offers. Which ones have the lowest interest rates? Which ones offer fixed or variable interest rates? Does the lender offer different repayment plans?

After picking the loans that work for you, you can apply for private loans through each lender’s website. Each lender generally asks for your basic personal and financial information. Moreover, they may ask you about the interest rate type and repayment option for your loan, and whether you’ll be applying with a co-signer.

Most lenders issue a credit approval within a brief period of time. Make sure to carefully review your loan terms before submitting your application. Afterward, your school will have to certify your loan amount before they can receive it and then issue a disclosure to you regarding your loan details.

Top 10 Private Student Loan Providers of 2021 at a Glance

Lender Fixed APR Variable APR Max. Loan Amount Min. Credit Score
College Ave 3.34% – 12.99% 1.04% – 11.98% 100% of student’s COA Undisclosed
Discover 4.24% – 13.99% 1.24% – 12.99% 100% of student’s COA Undisclosed
Earnest Starting at 2.98% Starting at 1.99% 100% of student’s COA 650
Education Loan
Finance (ELFI)
Starting at 2.58% Starting at 2.39% 100% of student’s COA 680
Laurel Road 3.90% 3.80% 100% of student’s COA Undisclosed
LendKey 4.25% – 12.59% 1.49% to 11.25% 100% of student’s COA Undisclosed
Sallie Mae 4.25% – 12.59% 1.13% – 11.23% 100% of student’s COA Undisclosed
SoFi 4.23% – 11.26% 1.22% to 11.66% 100% of student’s COA Undisclosed
Splash Financial Starting at 2.63% Starting at 1.89% 100% of student’s COA 650
U-fi 3.59% – 12.37% 1.20% – 11.72% $125,000 (undergraduate)
$500,000 (graduate)
680
Top 10 Private Student Loans of 2021

Top 10 Private Student Loans of 2021

It may be overwhelming to find good private loans to fund your education. Hence, we’ve made the following list of the best private student loan lenders. Each of these lenders has an excellent reputation, and feature virtually no loan limits. Read on to find the best loan for your financial situation.

College Ave

#1 for: Instant approval

Loan Types: Undergraduate, graduate (MBA, law, dental, medical), parent loans, refinancing, career, international

Loan Term: 5 – 15 years

College Ave is a great option for undergraduates, graduate students, or students pursuing an accredited career program. Parents can also get College Ave loans to help pay for their child’s education. Not only are their applications quick and accessible, but College Ave is also known for its quick approval and response time.

Like many private lenders, College Ave offers a 0.25 percent interest rate discount if you sign up to have payments automatically withdrawn from your bank account. College Ave is a good choice if you want to make up to full payments while in school and if you want loan amount flexibility.

Key Facts

College Ave has a rapid application and approval process.

Career loan programs feature a completion incentive.

No origination or prepayment fees are required.

Discover

#1 for: No fees

Loan Types: Undergraduate, graduate, parent, refinancing, MBA, law, international, consolidation, health professions, residency, Bar exam

Loan Term: 36 – 84 months

Discover Bank has been taking care of patrons for over 100 years, and is now a full-service online bank. Since 2010, Discover has offered private student loans to students attending over two thousand colleges and universities. Students can also receive private loans that cover up to 100 percent of their education costs.

Discover does not disclose its terms and approval unless students first apply. Discover also offers students several repayment options such as flat payments and deferred payments, and allows them to make payments while in school. The lender has an A+ rating with the Better Business Bureau (BBB) and is a BBB-accredited business.

Key Facts

Loans as small as $1,000 are available.

Co-signers are accepted.

Discover has no origination, application, or late fees.

Earnest

#1 for: Students with fair credit scores

Loan Types: Undergraduate, graduate, co-signer, refinancing, parent PLUS refinancing, MBA, law, medical

Loan Term: 5 – 20 years

Earnest was founded in 2013, and is an online lender offering private student loans. The lender specifies that students have to be enrolled in school full time, pursuing a bachelor’s or graduate degree. In order to qualify, they must have a FICO credit score of at least 650 and at least a three-year credit history.

Earnest is also accredited by the BBB, from whom it has received an A rating. Trustpilot also considers Earnest to be a viable lender, based on over 3,000 positive reviews. Earnest is a great choice for students with fair credit scores because they can customize their loan term and do not have to pay fees.

Key Facts

Earnest doesn’t charge origination, application, or late fees.

Students can customize their monthly payment and loan term length.

Co-signers are accepted, and student loan refinancing is also an available option.

Education Loan Finance (ELFI)

#1 for: Customer service

Loan Types: Undergraduate, graduate, parent loans, refinancing, parent refinancing, MBA, law, health care

Loan Term: 5 – 15 years

ELFI is a student loan refinancing program offered by SouthEast Bank. Several options are available in all 50 states for students seeking to refinance private and federal student loans. Students are not charged prepayment penalties, which means they can make payments larger than the monthly amount.

Borrowers facing financial hardship also have access to forbearance for up to 12 months at ELFI’s discretion. ELFI is known for its excellent customer service, as the Consumer Financial Protection Bureau received no complaints in 2020 about ELFI or SouthEast Bank.

Key Facts

There’s no maximum loan amount.

You can refinance all kinds of student loans.

Borrowers with up to a 50% debt-to-income ratio may be approved.

Laurel Road

#1 for: Students with good credit scores

Loan Types: Student loan refinancing, health care graduate, parent PLUS refinancing

Loan Term: 5 – 20 years

Laurel Road is an investment program created by KeyBank, which is based in Cleveland. Laurel Road offers student loans and refinancing to graduate students. Students must have a FICO credit score of at least 650 and a maximum debt-to-income ratio of 45 percent to refinance with Laurel Road.

Laurel Road’s repayment terms include full deferment, interest-only payments, and full principal and interest payments while in school. For members facing financial hardship, Laurel Road offers full or partial forbearance. KeyBank has an A+ rating with the BBB, while its complaints with the Consumer Financial Protection Bureau were promptly answered.

Key Facts

Loans are available from $5,000 up to 100% of the student’s school-certified COA.

Borrowers can make full payments or interest-only payments while in school, or even defer payments.

There are no application, origination, or prepayment fees.

LendKey

#1 for: Multiple lenders

Loan Types: Undergraduate, graduate, refinancing

Loan Term: 5 – 15 years

LendKey is a special kind of lending platform that allows students to borrow from a network of credit unions and community banks. It was founded in 2009 and has served many satisfied borrowers with over $3 billion in loans from partner lenders. LendKey allows student loan borrowers to borrow from several lenders and repay while they are in school.

LendKey’s qualification requirements are often undisclosed, as they vary based on the lender. LendKey also requires that borrowers possess a minimum credit history of three years. LendKey offers students forbearance in the event of financial hardship, but at the lender’s discretion. The BBB gave this private lender an A+.

Key Facts

You can choose from a network of numerous lenders with only one application.

Co-signers are accepted.

LendKey has no origination or application fees.

Sallie Mae

#1 for: Loan availability

Loan Types: Undergraduate, career training, parent, K-12, graduate, MBA, medical, medical residency, dental, dental residency, health professions, law school, Bar study

Loan Term: 5 – 15 years

Sallie Mae is a consumer bank that has been a popular option among private student loan borrowers since 2004. It offers a great variety of loans for students and parents to help pay for undergraduate and graduate degrees, including specialty degrees. Sallie Mae is accredited by the BBB, from which it has an A+ grade.

Sallie Mae does not disclose its minimum credit score and other eligibility requirements but states that students must attend a degree-granting institution. Students are typically given a thorough credit result after submitting an application. Its repayment options include deferred payments, fixed repayment, and in-school payment assistance.

Key Facts

Loans can cover miscellaneous expenses such as tuition, fees, books, housing, meals, travel, or a laptop.

Customer service is 100% US-based and highly reputable.

Loan origination fees are not required.

SoFi

#1 for: Several repayment options

Loan Types: Undergraduate, graduate, parent loans, refinancing, parent refinancing, MBA, law, dental, medical

Loan Term: 5 – 20 years

SoFi is an online loan lender that was founded in 2011 by Stanford business students. Though it initially focused on student loan refinancing, the company added private student loans in 2019. Its student loans for undergraduates, graduates, and parents start at $5,000 and charge no fees.

Students can apply with SoFi through a quick and simple online process, and can also access prequalification checks. SoFi members also gain free access to experienced career coaches and financial planners. The US News & World Report gave SoFi a high rating of 4.3 out of 5 stars, mainly for its affordability, flexibility, and customer service.

Key Facts

It charges little to no fees or prepayment penalties.

Borrowers facing financial hardship can access numerous programs, benefits, and co-signer release options.

Borrowers and co-signers can check rates and terms before submitting a full loan application without hurting their credit scores.

Splash Financial

#1 for: Quick credit decisions

Loan Types: Undergraduate, graduate, MBA, law school, dental school, medical school, parent loan refinancing

Loan Term: 5 – 15 years

Splash Financial is based in Cleveland, Ohio, and possesses a lender network of banks and credit unions. Loans are available in all 50 states. Applicants must possess a minimum FICO credit score of 660, and a maximum debt-to-income ratio of 50 percent. Applicants can also access a preapproval rate quote check, which doesn’t hurt their credit score.

Splash Financial offers deferment or forbearance for borrowers enduring financial hardship. This policy depends on the lender’s discretion, however, and is approved on a case-by-case basis. The entire application process can be completed online, and you can return to your application to check rates as often as you want.

Key Facts

Students can refinance several different kinds of student loans.

Students can look through a network of banks and credit unions to find the best possible rates.

Splash Financial does not ask for application fees, origination fees, or prepayment penalties.

U-fi

#1 for: Flexible loan terms

Loan Types: Undergraduate, graduate, MBA, law, health professions, refinancing

Loan Term: 5 – 25 years

U-fi offers private student loans and refinancing loans to borrowers in 49 states. A subsidiary of Nelnet, U-fi provides loan and refinancing options for all levels of study. It also offers students many flexible repayment plans, from in-school payments and grace periods to many others.

U-fi has a quick and easy application process, with which students can add co-signers and select their loan offers. The company is known for its great service and low interest rates. U-fi also offers forbearance and discharge options in the event that the borrower or co-signer dies.

Key Facts

Borrowers can repay the loan over a period of up to 25 years.

For automatic payments, the lender gives a discount on the interest rate.

Borrowers have the option of making full payments, paying only interest while in school, or deferring payments.

How to Choose the Right Private Student Loan Online

How to Choose the Right Private Student Loan Online

You should do your research and explore all your options before deciding how you’re going to fund your education. After scouring opportunities for financial aid and federal loans, take the time to compare loan options from private lenders. Below are some helpful tips you should consider when choosing the right loan.

Find the Right Type of Loan

What level of study are you pursuing? Every private student loan is different, and some loans are meant for students in specific programs. For instance, you will need to explore specific private loan programs if you’re pursuing a bachelor’s degree, planning to attend law school, or looking into online colleges.

Look for Benefits or Perks

Not all loans are equal, as some lenders provide specific benefits with their private student loans. These might include programs that make payments more manageable after graduation. Other benefits may involve no fees or coverage beyond education, such as for technology and travel needs. Some lenders also offer discounts for automatic payments.

Choose Between a Fixed and Variable Rate

Fixed rates, as the name implies, do not change, while variable rates can change based on the economy. Many private lenders offer the choice between a fixed and variable rate loan, but some offer only one or the other. Thinking about your priorities and preferences ahead of time will help you make your decision more swiftly.

Compare Interest Rates

Interest rates are important since they determine the final cost of your student loan. You should compare and contrast interest rate ranges from various private lenders to find the best applicable rate. Take advantage of prequalification offers, which will allow you to see what rate you qualify for without the lender doing a hard check on your credit report.

Research the Lender’s Reputation

It is important to investigate the reputation of a lender in order to make sure you won’t run into issues in the long run. It’s good practice to read online reviews of lenders. Several organizations and websites also give ratings to private lenders, such as the BBB and Trustpilot.

Fixed or Variable Student Loan: Which Is Better?

Since fixed interest rates always stay the same, they are usually preferred over variable rates. Variable rates can rise or fall in response to economic conditions. However, variable rates can help you save on interest if they don’t fluctuate too much.

If interest rates are increasing in the economy at large, you should consider a fixed rate, which has no chance of increasing. Fixed rates are also a good option if you want to make safe, routine monthly payments. However, if you expect to pay off your loans quickly, and interest rates are currently decreasing, then a variable rate may be a good option.

Should You Get a Private Student Loan?

If you’re still undecided on whether you should get a private loan, you should keep certain considerations in mind. Loans are a long-term financial commitment, and repayment can take anywhere from ten to 25 years.

Loans are also financially risky. They don’t guarantee that you will get a job after graduating, and many universities aren’t great at preparing students for the workforce. There are other options when it comes to funding your education, so make sure to do your research.

The decision to take out student loans depends on your career path, financial situation, and school of choice. Private student loans may not be necessary if you already have college costs covered by scholarships and grants. However, if you plan to go to an expensive college or didn’t qualify for sufficient financial aid, private student loans may be necessary.

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