Private student loan volume grows when federal student loan limits remain stagnant.
Private student loan volume grew much more rapidly than federal student loan volume through mid-2008, in part because aggregate loan limits on the Stafford loan remained unchanged from 1992 to 2008. (The introduction of the Grad PLUS loan on July 1, 2006 and the increases in the annual but not aggregate limits had only a modest impact on the growth of private student loan volume. The subprime mortgage credit crisis of 2007-2010, however, limited lender access to the capital needed to make new loans, reining in growth of the private student loan marketplace.) The annual increase in private student loan volume was about 25% to 35% per year, compared with 8% per year for federal loan volume.
Then the Ensuring Continued Access to Student Loans Act of 2008 increased the annual and aggregate loan limits on the federal Stafford loan starting July 1, 2008. This shifted significant loan volume from private student loan programs to federal. Private student loan volume dropped in half in 2008-09, according to the College Board’s Trends in Student Aid 2009.
Private student loan volume is expected to return to the 25% annual growth rate unless there is another increase in federal loan limits or an expansion of the availability of federal student loans. For example, the proposal for expanding Perkins loan funding from $1 billion a year to $8.5 billion a year will cause a significant decline in private student loan volume. But so long as federal loan limits do not increase every year, private student loan volume will continue to grow at double-digit rates.
If current trends continue, annual private education loan volume will surpass federal student loan volume by around 2030. Accordingly, it is important that students have tools they can use to compare different private student loans.
Best Private Student Loans
As a general rule, students should only consider obtaining a private education loan if they have maxed out the Federal Stafford Loan. They should also file the Free Application for Federal Student Aid (FAFSA), which may qualify them for grants, work-study and other forms of student aid. Undergraduate students should also compare costs with the Federal PLUS Loan, as the PLUS loan is usually much less expensive and has better repayment terms. Grad students can find the best graduate loan options on Finaid as well.
The fees charged by some lenders can significantly increase the cost of the loan. A loan with a relatively low interest rate but high fees can ultimately cost more than a loan with a somewhat higher interest rate and no fees. (The lenders that do not charge fees often roll the difference into the interest rate.) A good rule of thumb is that 3% to 4% in fees is about the same as a 1% higher interest rate.
Be wary of comparing loans with different repayment terms according to APR, as a longer loan term reduces the APR despite increasing the total amount of interest paid. Finaid’s Loan Comparison Calculator may be used to generate an apples-to-apples comparison of different loan programs.
The best private student loans will have interest rates of LIBOR + 2.0% or PRIME – 0.50% with no fees. Such loans will be competitive with the Federal PLUS Loan. Unfortunately, these rates often will be available only to borrowers with great credit who also have a creditworthy cosigner. It is unclear how many borrowers qualify for the best rates, although the top credit tier typically encompasses about 20% of borrowers.
Generally, borrowers should prefer loans that are pegged to the LIBOR index over loans that are pegged to the Prime Lending Rate, all else being equal, as the spread between the Prime Lending Rate and LIBOR has been increasing over time. Over the long term a loan with interest rates based on LIBOR will be less expensive than a loan based on the Prime Lending Rate. About half of lenders peg their private student loans to the LIBOR index and about 2/5 to the Prime lending rate.
Some lenders use the LIBOR rate because it reflects their cost of capital. Other lenders use the Prime Lending Rate because PRIME + 0.0% sounds better to consumers than LIBOR + 2.80% even when the rates are the same.
It is not uncommon for lenders to advertise a lower rate for the in-school and grace period, with a higher rate in effect when the loan enters repayment.
Federal student loans are not available for expenses incurred by law, medical and dental students after they graduate, such as expenses associated with study for the bar or finding a residency. There are two types of private student loans for these expenses:
- A Bar Study Loan helps finance bar exam costs such as bar review course fees, bar exam fees, as well as living expenses while you are studying for the bar.
- A Residency and Relocation Loan helps medical and dental students with the expenses associated with finding a residency, including interview travel expenses and relocation costs, as well as board exam expenses.
Comparing Private Student Loans
Key information to understand student loans includes being aware of the annual and cumulative loan limits, interest rates, fees, and loan term for the most popular private student loan programs. Often the interest rates, fees and loan limits depend on the credit history of the borrower and co-signer, if any, and on loan options chosen by the borrower such as in-school deferment and repayment schedule. Loan term often depends on the total amount of debt.
Most lenders that require school certification (approval) will cap the annual loan amount at cost of education less aid received (COA-Aid). They may also have an annual dollar limit as well.
Lenders rarely give complete details of the terms of the private student loan until after the student submits an application, in part because this helps prevent comparisons based on cost. For example, many lenders will only advertise the lowest interest rate they charge (for good credit borrowers). Borrowers with bad credit can expect interest rates that are as much as 6% higher, loan fees that are as much as 9% higher, and loan limits that are two- thirds lower than the advertised figures.
The APRs for variable rate loans, if listed, are only the current APRs and are likely to change over the term of the loan. Borrowers should be careful about comparing loans based on the APR, as the APR may be calculated under different assumptions, such as a different number of years in repayment. All else being equal, a longer repayment term will have a lower APR even though the borrower will pay more in interest.
This page provides a basic comparison chart that highlights the key characteristics of the major private education loans. FinAid also provides a separate list of private consolidation loans. In addition to the private student loan programs, there are several websites like Credible and other student loan comparison sites that provide tools for comparing private student loans which help identify the loans that match your criteria.
The information presented below is based on lender provided information. Actual rates and fees may differ.
Featured Student Loan Providers
Credible
Credible offers borrowers a “kayak-style” experience while shopping for student loans. Similar to the “Common App,” users (and co-signers) complete a single, brief form and receive personalized offers from multiple lenders. Checking rates on Credible is free and does not impact a user’s credit score to compare offers.
Credible’s marketplace includes:
- Ascent
- Citizens
- College Ave
- Custom Choice
- EDvestinU
- INvestEd
- MEFA
- Sallie Mae
Please be advised that the operator of this site accepts advertising compensation from companies that appear on the site, and such compensation may impact the location and order in which the companies (and/or their products) are presented.
Disclosure: Requesting prequalified rates on Credible is free and doesn’t affect your credit score. However, applying for or closing a loan will involve a hard credit pull that impacts your credit score and closing a loan will result in costs to you.
Loan
Choose between fixed and variable rate loans, as well as deferred and interest-only repayment options for your school loans.
Graduate and undergraduate loans for almost every degree type.
Repayment options range from immediate full repayment (principal and interest payments immediately after the loan is fully disbursed), interest only (interest-only payments while you are in school, and start making principal and interest payments after you leave school), full deferral while in school, flat payment while in-school, graduated repayment (payments increase over time).
Limits
COA-Aid (annual limit)
Borrow up to $170,000 through Credible’s marketplace.
Annual max (100% of school certified costs minus other financial aid received).
Lifetime aggregate loan amount 200K.
Rates
4.44% Fixed APR (with autopay)* and 4.99% Variable APR (with autopay) See Terms*
*Read rates and terms at Credible.com.
Fees and Terms
No fees.
5, 7, 8, 10, 12, 15 and 20 year terms available.
Student Loan Providers
ASCENT STUDENT LOAN OPTIONS WITH OR WITHOUT A COSIGNER
Ascent offers benefits that put students first:
• Fast and easy, complete your application in minutes and check your pre-qualified rates without impacting your credit score
• Flexible repayment options
• Student success coaching* and additional resources to help you complete your degree
• Fast 12-month cosigner release option**
• Over $80,000 in scholarships awarded this year (Find Ascent Scholarships)
• 1% CASH BACK Graduation Reward*
• DACA Students eligible to apply
• NON-COSIGNED option for eligible students*
• OUTCOMES BASED LOAN for juniors and seniors with a 2.9+ GPA and no credit score*
Check your rate without impacting your credit score.
*Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: AscentFunding.com/Ts&Cs
Rates are effective as of 5/1/2023 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates
1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.
** Please see https://www.ascentfunding.com/borrowerbenefits/ for details.
Loan
Get a loan that goes beyond tuition. Ascent offers more ways to pay for school with or without a cosigner.
Ascent puts students first by offering financial resources and career-prep tools, including access to our student success program*. Ascent offers loans for undergraduate, graduate, international, and DACA students.
Limits
COVER UP TO 100% college tuition and living expenses with a minimum loan amount of $2,001 and up to $200,000 (or total cost of attendance less aid received).
Rates
AFFORDABLE RATES
Undergraduate Rates:
• Variable: 6.16% – 15.49%
• Fixed: 4.62% – 15.66%
Graduate Rates:
• Fixed APR with ACH: 5.44% – 15.91%
• Variable APR with ACH: 6.69% – 15.74%
Check your rate without impacting your credit score.
Fees and Terms
• No Fees. There are no application, origination or disbursement fees, and no penalty if you pay off your loan early.
• Choose your loan terms from 5, 7, 10, 12, 15, or 20 years. See repayment examples for more details.
• Start payments up to 9 months after graduation.
College Ave Student Loans – Undergraduate Student Loans
College Ave Student Loans offers loan options for undergrads, grad students and parents. Our loans are designed to give you great rates plus the most repayment options so you can create a loan that fits your monthly budget while paying as little interest as possible.
Our simple application process takes just 3 minutes to complete and get an instant credit decision. Not sure which repayment plan is right for you? Our student loan calculator and free credit pre-qualification tool can help.
For footnotes, please refer to the links for product specifics (undergraduate, graduate or parent).
Loan
Undergraduate Student Loan Help cover tuition and other education costs for students in associates and bachelors degree programs.2
You decide whether to make loan payments during school:
• Full Principal and interest payments
• Interest only payments
• $25 payments each month during school3
• Defer payments while in school
Limits
COA-Aid ($1,000 minimum)2
Rates
Variable Rates: 4.99%-15.32% APR (with auto-pay discount)1
Fixed Rates: 4.44% – 15.32% APR (with auto-pay discount)1
Fees and Terms
No application or origination fees and no penalties for paying early.
Choose between 5, 8, 10 or 15 year options.3
College Ave Student Loans – Graduate Student Loans
College Ave Student Loans offers loan options for undergrads, grad students and parents. Our loans are designed to give you great rates plus the most repayment options so you can create a loan that fits your monthly budget while paying as little interest as possible.
Our simple application process takes just 3 minutes to complete and get an instant credit decision. Not sure which repayment plan is right for you? Our student loan calculator and free credit pre-qualification tool can help.
For footnotes, please refer to the links for product specifics (undergraduate, graduate or parent).
Loan
Graduate Student Loan Cover the costs of school for students pursuing a masters, doctoral or professional degree.2
Graduate students should also check out our other graduate loan products…
• Dental Loan
• Medical Loan
• Law School Loan
• MBA Loan
• Graduate Health Professional Loan
You can also choose from 4 different repayment options
Limits
COA-Aid ($1,000 minimum)2
Rates
Variable Rates: 4.99%-13.99% APR (with auto-pay discount)1
Fixed Rates: 4.44% – 13.99% APR (with auto-pay discount)1
Fees and Terms
No application or origination fees and no penalties for paying early.
Choose between 5, 8, 10 or 15 year options.3
College Ave Student Loans – Parent Loans
College Ave Student Loans offers loan options for undergrads, grad students and parents. Our loans are designed to give you great rates plus the most repayment options so you can create a loan that fits your monthly budget while paying as little interest as possible.
Our simple application process takes just 3 minutes to complete and get an instant credit decision. Not sure which repayment plan is right for you? Our student loan calculator and free credit pre-qualification tool can help.
For footnotes, please refer to the links for product specifics (undergraduate, graduate or parent).
Loan
Help pay for your child’s education with a customized loan.
Choose how quickly to pay back the loan:
• Full Principal and interest payments
• Interest plus payment
• Interest only payments
Limits
COA-Aid ($1,000 minimum)2
Rates
Variable Rates: 4.99%-15.32% APR (with auto-pay discount)1
Fixed Rates: 4.44% – 15.32% APR (with auto-pay discount)1
Fees and Terms
No application or origination fees and no penalties for paying early.
Choose to pay back the loan in as little as 5 years or take up to 12 years (or pick something in between).3
Discover Student Loans – Undergraduate Student Loan
Get help with more than just tuition. Discover® Student Loans covers up to 100% of your school-certified college costs, including tuition, housing, books, and more. All with zero fees and cash rewards for good grades. Limitations apply.
Repayment Options
- In-School Interest-Only
- In-School Fixed
- Deferred
Application Process
Applying online is quick and easy, and our Student Loan Specialists are ready to help you anytime 24/7.
Rewards
- 0.25% Auto Debit Reward while enrolled in automatic payments.
- Cash Rewards for Good Grades. Limitations apply.
Loan
• For students enrolled at least half-time in a bachelor’s or associate’s degree program at an eligible school.
• Set your own terms with rate and repayment options.
Limits
COA-Aid ($1,000 minimum)
Rates
• Variable Rates: 6.12%–15.37% APR
• Fixed Rates: 5.49%–14.99% APR
• Lowest APRs are available to the most creditworthy applicants, and include an interest-only repayment discount and Auto Debit Reward.1
• Applying with a creditworthy cosigner may improve your likelihood for loan approval and you may receive a lower rate.
• Rates advertised valid as of April 1, 2023.
1 The fixed interest rate is set at the time of application and does not change during the life of the loan unless you are no longer eligible for one or more discounts. The variable interest rate and corresponding APR may increase over the life of the loan. The variable interest rate is calculated based on the 3-Month CME Term SOFR index plus the applicable margin percentage less any applicable discounts. The 3-Month CME Term SOFR index value for variable interest rate loans is 4.875% as of April 1, 2023. 3-Month CME Term SOFR is administered by CME Group and is published by CME Group on its website (cmegroup.com/termsofr). Discover Student Loans may adjust the variable interest rate quarterly on each January 1, April 1, July 1 and October 1 (each an “interest rate change date”), based on the 3-Month CME Term SOFR rate available for the day that is 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125), or 0%, whichever is greater. This may cause the monthly payments to increase, the number of payments to increase or both. If the 3-Month CME Term SOFR rate is less than zero percent, then the index will be deemed to be zero percent (as stated in the promissory note) for purposes of calculating your interest rate. Your variable interest rate (index + margin – applicable discounts) will not exceed 18%. Our lowest APRs are only available to applicants with the best credit. The APR will be determined after an application is submitted. It will be based on credit history, the selected repayment option and other factors, including a cosigner’s credit history (if applicable). If a student does not have an established credit history, the student may find it difficult to qualify for a private student loan on their own or receive the lowest advertised rate. Learn more about Discover Student Loans interest rates.
Fees and Terms
• No late fees, application fees, origination fees, or any fees. Period.
• No prepayment penalties.
• See DiscoverStudentLoans.com for repayment details.
Discover Student Loans – Graduate Student Loans
Get help with more than just tuition. Discover® Student Loans covers up to 100% of your school-certified college costs, including tuition, housing, books, and more. All with zero fees and cash rewards for good grades. Limitations apply.
Loan Types
- Graduate
- MBA
- Health Professions
- Law
Repayment Options
- In-School Interest-Only
- In-School Fixed
- Deferred
Application Process
Applying online is quick and easy, and our Student Loan Specialists are ready to help you anytime 24/7.
Rewards
- 0.25% Auto Debit Reward while enrolled in automatic payments.
- Cash Rewards for Good Grades. Limitations apply.
Loan
• For graduate, MBA, health professions, and law students enrolled at least half-time in a master’s or doctorate degree program at an eligible school.
• Set your own terms with rate and repayment options.
Limits
COA-Aid ($1,000 minimum)
Rates
• Graduate Variable Rates: 6.87%–16.97% APR
• Graduate Fixed Rates: 5.99%–15.99% APR
• MBA Variable Rates: 7.12%–13.87% APR
• MBA Fixed Rates: 5.99%–12.99% APR
• Health Professions Variable Rates: 6.87%–11.72% APR
• Health Professions Fixed Rates: 5.99%–10.99% APR
• Law Variable Rates: 6.87%–15.87% APR
• Law Fixed Rates: 5.99%–14.99% APR
• Lowest APRs are available to the most creditworthy applicants, and include an interest-only repayment discount and Auto Debit Reward.1
• Applying with a creditworthy cosigner may improve your likelihood for loan approval and you may receive a lower rate.
• Rates advertised valid as of April 1, 2023.
1 The fixed interest rate is set at the time of application and does not change during the life of the loan unless you are no longer eligible for one or more discounts. The variable interest rate and corresponding APR may increase over the life of the loan. The variable interest rate is calculated based on the 3-Month CME Term SOFR index plus the applicable margin percentage less any applicable discounts. The 3-Month CME Term SOFR index value for variable interest rate loans is 4.875% as of April 1, 2023. 3-Month CME Term SOFR is administered by CME Group and is published by CME Group on its website (cmegroup.com/termsofr). Discover Student Loans may adjust the variable interest rate quarterly on each January 1, April 1, July 1 and October 1 (each an “interest rate change date”), based on the 3-Month CME Term SOFR rate available for the day that is 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125), or 0%, whichever is greater. This may cause the monthly payments to increase, the number of payments to increase or both. If the 3-Month CME Term SOFR rate is less than zero percent, then the index will be deemed to be zero percent (as stated in the promissory note) for purposes of calculating your interest rate. Your variable interest rate (index + margin – applicable discounts) will not exceed 18%. Our lowest APRs are only available to applicants with the best credit. The APR will be determined after an application is submitted. It will be based on credit history, the selected repayment option and other factors, including a cosigner’s credit history (if applicable). If a student does not have an established credit history, the student may find it difficult to qualify for a private student loan on their own or receive the lowest advertised rate. Learn more about Discover Student Loans interest rates.
Fees and Terms
• No late fees, application fees, origination fees, or any fees. Period.
• No prepayment penalties.
• See DiscoverStudentLoans.com for repayment details.
Discover Student Loans – Parent Loan
Get help with more than just tuition. Discover® Student Loans covers up to 100% of your student’s school-certified college costs, including tuition, housing, books, and more. All with zero fees and a 0.25% interest rate reduction while enrolled in automatic payments. Limitations apply.
Application Process
Applying online is quick and easy, and our Student Loan Specialists are ready to help you anytime 24/7.
Reward
0.25% Auto Debit Reward while enrolled in automatic payments.
Loan
• For parents or other creditworthy individuals of students enrolled at least half-time in a bachelor’s, associate’s, or graduate degree program at an eligible school.
• Repayment begins after the loan’s final disbursement.
Limits
COA-Aid ($1,000 minimum)
Rates
• Variable Rates: 10.87%–16.12% APR
• Fixed Rates: 9.99%–14.99% APR
• Lowest APRs are available to the most creditworthy applicants, and include an Auto Debit Reward.1
• Rates advertised valid as of April 1, 2023.
1 The fixed interest rate is set at the time of application and does not change during the life of the loan unless you are no longer eligible for one or more discounts. The variable interest rate and corresponding APR may increase over the life of the loan. The variable interest rate is calculated based on the 3-Month CME Term SOFR index plus the applicable margin percentage less any applicable discounts. The 3-Month CME Term SOFR index value for variable interest rate loans is 4.875% as of April 1, 2023. 3-Month CME Term SOFR is administered by CME Group and is published by CME Group on its website (cmegroup.com/termsofr). Discover Student Loans may adjust the variable interest rate quarterly on each January 1, April 1, July 1 and October 1 (each an “interest rate change date”), based on the 3-Month CME Term SOFR rate available for the day that is 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125), or 0%, whichever is greater. This may cause the monthly payments to increase, the number of payments to increase or both. If the 3-Month CME Term SOFR rate is less than zero percent, then the index will be deemed to be zero percent (as stated in the promissory note) for purposes of calculating your interest rate. Your variable interest rate (index + margin – applicable discounts) will not exceed 18%. Our lowest APRs are only available to applicants with the best credit. The APR will be determined after an application is submitted. It will be based on credit history, the selected repayment option and other factors, including a cosigner’s credit history (if applicable). If a student does not have an established credit history, the student may find it difficult to qualify for a private student loan on their own or receive the lowest advertised rate. Learn more about Discover Student Loans interest rates.
Fees and Terms
• No late fees, application fees, origination fees, or any fees. Period.
• No prepayment penalties.
• See DiscoverStudentLoans.com for repayment details.
Sallie Mae – Undergraduate Student Loans
Special Features/Benefits:
- Get a 0.25 percentage point interest rate reduction when you enroll and make monthly payments by auto debit.*
- You can get the money you need to cover 100% of your school-certified expenses whether you’re studying online or on campus.*
- Choose from multiple repayment options, including no payments while in school.*
Application Process:
Borrower can initiate the application process at SallieMae.com. It only takes about 15 minutes to apply online and get a credit result.
Sallie Mae reserves the right to modify or discontinue products, services, and benefits at any time without notice and provides compensation to Finaid for the referral of loan customers. Terms, conditions, and limitations apply.
*More Sallie Mae Loan Information.
Information advertised valid as of 5/25/2023.
Index is the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent.
Loan
For undergraduate and career training students. (School Certified)
Pay now or later – choose an in-school repayment option that fits your needs or defer your payments until after school.*
• Make interest payments each month
• Pay $25* per month
• Defer payments
Limits
COA-Aid ($1,000 minimum)*
Rates
• Variable Rates: 30-day SOFR + 6.25% (5.99% APR) to 30-day SOFR + 17.38% (16.33% APR)*
• Fixed Rates: 4.75% (4.50% APR) to 15.88% (14.83% APR)*
• Lowest APRs shown include the auto debit discount.
Fees and Terms
• 10-15 years based on cumulative Sallie Mae loan balance, repayment option and year in school.*
• No origination fee or prepayment penalty.
• Although we do not charge a penalty or fee if you prepay your loan, any prepayment will be applied as outlined in your promissory note — first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal.
We encourage students and families to start with savings, grants, scholarships, and federal student loans to pay for college. Students and families should evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan.
Please be advised that the operator of this site accepts advertising compensation from companies that appear on the site, and such compensation impacts the location and order in which the companies (and/or their products) are presented.
Additional Lenders listed below. Please visit lender website for updated information.
- Acumen Student Loans
- Alliant
- College Ave Student Loans
- Connecticut Higher Education Supplemental Loan Authority (CHESLA)
- Credit Union Student Choice
- cuLearn
- DEAL One Loan – Bank of North Dakota
- Higher Education Servicing Corp. (Texas)
- Independent Community Bankers of America (ICBA)
- Maine Educational Loan Authority (MELA)
- Massachusetts Educational Financing Authority (MEFA)
- Minnesota Office of Higher Education
- Navy Federal Credit Union
- PNC Education Lending
- Regions Bank
- Rhode Island Student Loan Authority (RISLA)
- SoFi, Inc.
- South Carolina Student Loan Corporation
- Thrivent
Definitions
- LIBOR is the 3-month average of the London Interbank Offered Rate. LIBOR is the average interest rate paid on deposits of US dollars in the London market.
- PRIME is the Prime Lending Rate as published in the Wall Street Journal. This is the rate banks charge their most creditworthy customers.
- COA-Aid is the Cost of Attendance minus all other student aid received.
- APR is the Annual Percentage Rate, a rate that factors in the interest rate, fees, and other terms.
