Best Private Student Loans of May 2024

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If you’ve already used your savings, federal student loans, and student aid to pay for college and still find that you’re short on cash, a private student loan could be a good option. 

Our Top Picks for the Best Private Student Loan Companies

The best student loans available are federal student loans. But if you need to turn to a private lender, here are a few of the best places to begin your search.

Compare the Top Private Student Loans

The best private student loans have competitive interest rates, a variety of repayment terms, and no origination fees. Our list of the best options includes picks for both undergraduate and graduate students.

Sofi Student Loans

SoFi private student loans are best for graduate students. SoFi is one of the few lenders offering lower interest rates for graduate school loans than undergraduate loans. 

While SoFi’s interest rates are competitive with others on the list, what makes SoFi unique are its other features. This lender offers some good protections for student loan borrowers, like career services and unemployment protection. Additionally, SoFi’s student loans have no fees, including no late fees (though it’s worth noting that interest will still accrue).

Watch out for: High maximum loan amount. SoFi’s minimum loan amount is $5,000 — if you need a small student loan, it might be worth turning to a lender that makes smaller loans. 

SoFi Student Loans Review

Ascent Student Loans

Ascent private student loans are a flexible option for almost any student loan borrowers. Interest rates are competitive, and terms range from five to 15 years. 

Cosigners are allowed and encouraged. A relatively unique feature is Ascent’s cosigner release. Make 12 consecutive on-time payments, and Ascent can release a cosigner from your student loan. 

What to watch out for: Ascent isn’t a great option if you want to repay your student loans while you’re still in school, as this lender doesn’t offer a repayment plan with full payments while borrowers are still enrolled. But there’s no prepayment penalty on loans if you want to make partial payments in school. It’s also worth noting that Ascent limits borrowers’ total loans to $400,000, including any other federal or private student loans outside of Ascent. 

Ascent Student Loans Review

Earnest Student Loans

Earnest’s private student loans offer low starting interest rates and very flexible repayment terms. Earnest has four options for repayment, including a nine-month deferral after school. Earnest doesn’t charge any fees, including prepayment or origination fees on private student loans, which makes it a strong option. 

Earnest also advertises the ability to skip a payment once per year. But that doesn’t mean that you’re off the hook for that payment, since interest will still add up and your payoff will be delayed. Your payments could be higher if you take full advantage of these features, and they could increase your total payoff time and loan amount. 

But if used the right way, Earnest’s private student loans could still beat the competition with such low starting interest rates.

What to watch out for: Some of Earnest’s flexible features aren’t the right fit for everyone. The ability to delay loans for nine months may not be as great as it sounds, since interest still accrues during this period, growing your loan’s balance.

Earnest Student Loans Review

College Ave Student Loans

College Ave ties has one of the lowest starting interest rates on private student loans, since undergraduate fixed-rate loans start with an interest rate of 4.07%. Interest rates for grad school students are also competitive with SoFi’s lower interest rates for this group. 

It’s a good choice for both graduate and undergraduate students, and it offers four options for repayment. College Ave allows cosigners for loans and offers parent loans in addition to undergraduate and graduate loans, starting at the same interest rate as the undergraduate interest rate.

What to watch out for: Late payment penalty. You’ll fork over a late payment of 5% of the amount due, capped at $25 if you fall behind on your payments. 

College Ave Student Loans Review

Sallie Mae Student Loans

Sallie Mae doesn’t charge any origination and prepayment fees, and you also get four months of the study service Chegg for free. Chegg offers expert Q&A, and students can submit up to 20 questions per month.

What to watch out for: Sallie Mae sets your repayment term length, so if you want to choose your term length another lender is a better option. 

Sallie Mae Student Loans Review

Discover Student Loans

Discover’s undergraduate student loans don’t have any prepayment penalties, origination fees, or late charges. However, you may be able to find lower fixed rates with other lenders on our list. 

Discover also boasts a one-time 1% cash reward on its student loans for borrowers who get a GPA of 3.0 or higher for any academic term covered by the loan. You’ll have to redeem your reward within six months after the loan’s disbursement or six months after the academic term has ended, whichever is later.  

What to watch out for: Limited term length options. Discover has only one standard term available, 15 years, which makes it a bad option if you want a different length. 

Discover Student Loans Review

Custom Choice Student Loans

Custom Choice offers loans of up to $99,999 annually that come without fees, and you can check your rates within a few minutes. 

Custom Choice also offers a 2% reduction on your loan principal after you provide the lender with proof of graduation, as well as a .25% interest rate reduction when you sign up for AutoPay.

What to watch out for: No mobile app. If you want to manage your loans on the go, you won’t be able to with Custom Choice.

Custom Choice Student Loans Review

MPower Financing Student Loans

MPower Financing offers fixed loans designed for international students. You can get a loan without a cosigner, collateral, or US credit history. Most other lenders that offer loans to international students require a US citizen or permanent resident to cosign on the loan. 

What to watch out for: High interest rates. While the lender’s starting interest rates are higher than many of the other lenders on this list, we included it because of its accessibility for international students. 

MPower Financing Student Loans Review

Which Private Student Loan Lender Is the Most Trustworthy?

We’ve only selected private student loan lenders with no public controversies in the last three years. We’ve also compared each institution’s Better Business Bureau score.

The BBB, a non-profit organization focused on consumer protection and trust, evaluates companies by judging a business’s responses to consumer complaints, honesty in advertising, and clarity about business practices. Here is each company’s score:

Of our top picks, only Custom Choice and MPower are not currently rated an A- or higher by the BBB. Custom Choice isn’t rated by the BBB at all, and the BBB doesn’t have sufficient information to rate MPower Financing. That said, this doesn’t necessarily reflect Custom Choice or MPower’s trustworthiness, and you should ask others about their experiences with the businesses before deciding against borrowing from the companies.

FAQs

Why You Should Trust Us: Our Experts for the Best Private Student Loans

We consulted loan and financial experts to give their insights into finding the best low-interest student loans for your needs.

Methodology: How We Picked the Best Private Student Loans

We rate all student loan products in our reviews and guides on a 1-5 scale. The overall rating is a weighted average that takes into account seven different categories, some of which are judged more heavily than others. They are:

• Interest rate (20% of rating)
• Fees (20% of rating)
• Term lengths (15% of rating)
• Repayment options while in school (15% of rating)
• Borrower accessibility (15% of rating)
• Customer support (7.5% of rating)
• Ethics (7.5% of rating)

Each category’s weighting is determined based on its importance to your borrowing experience. Rates and fees have the most significant impact on the total cost of your loan, so we weigh those the most heavily. Customer support and ethics are still crucial parts of the borrowing experience, but do not directly tie to a student loan’s terms, so they have less of an impact on the overall rating.

Read more about how we rate student loans >>

Our Experts’ Advice on Choosing the Best Private Student Loan

How should I determine how much to borrow through a student loan?

Sean August:

“The loan amount should be high enough to cover your education expenses, but not so high that you borrow more than you can afford to repay.”

Ryan Wangman:

“Look at the total cost of your education, and subtract any ‘gift aid’ you’ll receive, like scholarships or grants. Then, consider how much of the remaining money you’ll need to take out in loans to afford the cost of school.”

How do the best private student loan rates compare with other loan rates?

Sean August:

“The best private student loans should have lower interest rates compared to credit cards and personal loans. Competitive interest rates will ensure that you don’t pay more than you need to over the life of your loan.”

Ryan Wangman:

“The best private student loans will have rates in the single digits, especially for borrowers with great credit. Rates on student loans are usually lower than the rates on credit cards or personal loans.”