Citizens vs Edly: Private student loans compared

Citizens vs Edly comes down to payment structure: Citizens offers traditional fixed or variable rate loans with predictable monthly payments, while Edly uses Income Share Agreements (ISAs) where payments are tied to a percentage of your post-graduation income. Choose Citizens for payment predictability or Edly for income-based protection.

Navigating the gap between federal aid and the total cost of college requires careful consideration of how you plan to repay that debt. In this guide, you’ll learn how rates, eligibility criteria, repayment terms, and borrower protections compare between these two distinct financing models. By understanding the fundamental differences between a traditional bank loan and an income share agreement, you can determine which lender better fits your family’s financial planning goals or your personal career trajectory.

Whether you are a parent looking to protect your retirement savings while helping your child, or a student worried about entering a volatile job market, understanding these options is the first step toward empowered borrowing. We will break down the complex terms into clear comparisons, ensuring you have the information needed to make a confident decision.

Context: How Citizens Bank and Edly differ

Before diving into the numbers, it is essential to understand that Citizens and Edly represent two fundamentally different approaches to higher education financing. This isn’t just a comparison of interest rates; it is a choice between two distinct financial models.

Citizens Bank is a traditional financial institution with a history dating back to 1828. As one of the top private student loan lenders in the country, they operate on a standard lending model: you borrow a specific amount of money and agree to pay it back over a set term with interest. The payments are generally fixed (unless you choose a variable rate), meaning you know exactly how much you owe each month regardless of your income.

Edly, on the other hand, is a fintech company that specializes in Income Share Agreements (ISAs). Under this model, you receive funding for school in exchange for agreeing to pay a fixed percentage of your future gross income for a set period. If you earn a high salary, you may pay back more than you would with a traditional loan. If your income is low or you are unemployed, your payments pause or adjust downward. This model shifts some of the risk from the borrower to the lender.

Citizens typically fits borrowers—or families with cosigners—who have strong credit and want the stability of a defined repayment schedule. Edly is often designed for students who may lack a credit-rich cosigner or those entering fields where starting salaries vary, providing a safety net against low earnings.

Quick comparison: Citizens vs Edly at a glance

To help you quickly assess which option aligns with your financial profile, the table below compares the core features of both lenders. This overview highlights the structural differences between a standard private loan and an income share agreement.

Source: Citizens Bank and Edly disclosures (as of October 2024)

Interpretation: If you value knowing exactly when your debt will be paid off and exactly how much interest you will pay, Citizens offers that certainty. If you are worried about graduating into a recession or an entry-level job with low pay, Edly’s structure ensures your payments never exceed a manageable portion of your paycheck, though you might pay more in total if your career takes off quickly.

Interest rates and payment structure compared

The most significant difference between these two lenders lies in how they calculate what you owe. This section breaks down the cost of borrowing so you can evaluate the total repayment scenarios for your specific situation.

Citizens offers standard student loans with either fixed or variable interest rates. According to Citizens Bank, as of October 2024, competitive fixed rates are 5.99% - 15.00% APR, while variable rates are 6.98% - 15.69% APR. Your specific rate is determined by your creditworthiness (or your cosigner’s), the repayment term you choose, and whether you have an existing relationship with the bank.

Borrowers can also benefit from a 0.25% interest rate reduction by enrolling in autopay. Because the interest rate is applied to the principal balance, you can calculate the total cost of the loan before you sign the promissory note (assuming a fixed rate). This transparency is a hallmark of traditional lending, as detailed in our guide to private student loans.

Edly does not charge an interest rate in the traditional sense. Instead, according to Edly, they assign an “Income Share Percentage,” which typically ranges between 2% and 10% of your gross monthly income as of October 2024. This percentage is determined by factors such as your school, your major, and the amount of funding you receive.

Because payments are tied to income, the “cost” of the funding is variable.

• Higher earner scenario: If you graduate and land a high-paying job, 5% of your income could add up to significantly more than the principal plus traditional interest.
• Lower earner scenario: If your income remains modest, your payments remain low, potentially resulting in a lower total cost compared to a high-interest loan.

According to Jason Delisle, higher education finance expert, “The private market can and does innovate—offering options federal loans don’t, such as variable rates or targeted underwriting.” This innovation allows ISAs to serve students who might be priced out of traditional loans due to credit history.

Edly includes a “payment cap” (often 2-2.5 times the funded amount) to prevent high earners from paying an exorbitant amount, but it is crucial to model out different salary scenarios to understand the potential total cost.

Loan amounts and funding limits

Once you understand the cost, the next step is determining if the lender can provide enough funding to cover your tuition gap. Both options are designed to fill the void left after scholarships, grants, and federal aid are exhausted.

According to Citizens Bank, as of October 2024, the minimum loan amount is typically $1,000. The maximum can go up to the total cost of attendance (minus other aid received), with aggregate lifetime limits reaching as high as $150,000 for undergraduate degrees and up to $350,000 for certain professional graduate degrees (like medical or law school).

A distinct feature of Citizens is their “Multi-Year Approval,” which allows qualified borrowers to secure funding for their entire degree program with a single initial application, simplifying the process for subsequent years.

According to Edly, as of October 2024, funding amounts are generally smaller and more targeted. While specific limits vary by school and program, funding typically ranges from $5,000 to $25,000 per academic year. The amount offered depends heavily on the projected return on investment of your specific degree program.

Because ISAs are often used to cover final tuition gaps rather than the entire cost of attendance, Edly may be better suited for students who need to bridge a smaller shortfall rather than finance four full years of tuition.

Regardless of which option you choose, always remember to maximize your federal borrowing options first. Federal Direct Loans often come with lower fixed rates and more flexible repayment plans. You can learn more in our comprehensive guide to federal loans.

Eligibility requirements and cosigner policies

Qualifying for private funding is often the biggest hurdle for students. The criteria for Citizens and Edly differ significantly, reflecting their distinct business models.

Citizens operates like a traditional bank. Approval relies heavily on credit history and debt-to-income ratios.

• Credit score: According to Citizens Bank, borrowers generally need a good to excellent credit score (typically 670 or higher) to qualify as of October 2024, with the best rates reserved for those with scores in the high 700s.
• Income: There is usually a minimum income requirement for the borrower or cosigner (often around $24,000/year).
• Cosigners: Because most undergraduate students have thin credit files, a creditworthy cosigner is almost always required. According to Citizens Bank, they offer a cosigner release option, allowing the primary borrower to take full responsibility for the loan after making 36 consecutive, on-time principal and interest payments.

Edly uses alternative underwriting that focuses less on FICO scores and more on potential.

• Program-based approval: Eligibility is largely determined by your school, your year in school (juniors and seniors are often preferred), and your major. They look for programs with strong employment outcomes.
• Credit history: While they may perform a soft credit check, a high credit score is not the primary barrier to entry. This makes Edly an attractive option for students who cannot find a cosigner.
• Citizenship: Edly is available to U.S. citizens and permanent residents, similar to most private lenders.

According to Mark Kantrowitz, financial aid expert, “Most students will need a cosigner to qualify for a private student loan.” While this is true for traditional lenders like Citizens, models like Edly’s are designed specifically to address this barrier.

For a broader look at what lenders require, review our eligibility checklist for private loans.

Application process and timeline

Understanding the application workflow can help you plan your financing timeline and ensure tuition bills are paid on time.

The Citizens application process is fully digital and streamlined.

1. Prequalification: You can check your rate in minutes with a soft credit inquiry, which won’t hurt your credit score.
2. Full application: If you proceed, you (and your cosigner) will submit a full application requiring proof of income, identification, and school details. This triggers a hard credit check.
3. Certification: Citizens sends the loan details to your school for certification (verification of enrollment and financial need).
4. Disbursement: Funds are sent directly to the school. According to Citizens Bank, the entire process typically takes 2–4 weeks as of October 2024, depending on how quickly your school processes the certification.

Edly’s process is slightly different due to the nature of the agreement.

1. Account creation: You create a profile and select your school and program. Edly immediately verifies if your program is eligible.
2. Offer review: If eligible, you receive terms based on your major and anticipated graduation date.
3. Verification: You may need to upload transcripts or proof of enrollment rather than tax returns.
4. Funding: Once the contract is signed and the school certifies the amount, funds are disbursed directly to the school. Timelines can vary but are generally comparable to private loans, often taking a few weeks to finalize.

Repayment terms and flexibility

How you pay back the money is just as important as how much you get. The repayment structure dictates your monthly budget for years after graduation.

Citizens offers standard term loans. You choose a repayment timeline—typically 5, 7, 10, or 15 years. The shorter the term, the higher the monthly payment, but the less interest you pay overall.

• In-school payments: You can choose to make full payments, interest-only payments, or flat payments while in school to reduce debt. Alternatively, you can defer payments until 6 months after graduation.
• Certainty: Your monthly payment amount is fixed (for fixed-rate loans). You know exactly when you will be debt-free.

Edly’s repayment is tied to your career success.

• Income threshold: According to Edly, as of October 2024, you only make payments if your gross income exceeds a minimum threshold (often around $30,000). If you earn less, your payments are $0 for that month, and you are not considered delinquent.
• Payment cap: There is a maximum amount you will ever pay back. Once you hit this cap—or once the repayment term (number of months) expires—your obligation ends, even if you haven’t paid back the “principal” in full.
• Duration: The repayment window is defined by a number of required payments or a maximum timeline (e.g., 84 months of payments within a 10-year window).

For more strategies on managing payments, see our guide to student loan repayment.

Fees, forbearance, and borrower protections

Life doesn’t always go according to plan. Understanding the safety nets each lender provides is crucial for long-term financial safety.

Citizens Bank: According to Citizens Bank, as of October 2024, Citizens charges no origination fees, no application fees, and no disbursement fees. However, late fees may apply if you miss a payment deadline.

Edly: ISAs generally do not have “origination fees” in the traditional sense, but the cost of the program is built into the income share percentage. Always read the disclosure to check for any administrative fees.

Citizens Bank: According to Citizens Bank, they offer forbearance options if you face economic hardship or unemployment. However, these are typically granted at the lender’s discretion and are limited in duration (often up to 12 months total over the life of the loan as of October 2024). Interest usually continues to accrue during forbearance.

Edly: Income protection is built directly into the contract. You do not need to “apply” for forbearance if you lose your job; if your income drops below the threshold, your payments automatically stop. This automatic adjustment is a powerful safety feature for students entering volatile industries.

Both lenders generally offer discharge in the event of the primary borrower’s death or permanent disability. Citizens is notable for also offering this protection to the cosigner in certain situations, which is not standard across all private lenders.

Citizens vs Edly: Which is right for you?

Choosing between Citizens and Edly is a decision about risk tolerance and financial philosophy. There is no single “better” option, but there is likely a better option for you.

Choose Citizens Bank if:

• You or your cosigner have a credit score of 670+ and stable income.
• You want the lowest possible cost of borrowing (assuming you qualify for competitive rates).
• You prefer the certainty of a fixed monthly bill that won’t increase if you get a raise.
• You are studying for a high-income career (like engineering or medicine) where an ISA might end up costing you significantly more.
• You want the ability to release your cosigner after a few years of on-time payments.

Choose Edly if:

• You do not have a creditworthy cosigner and cannot qualify for traditional private loans.
• You are entering a field with variable income (like arts, sales, or entrepreneurship) and want downside protection.
• You are worried about the risk of unemployment during a recession.
• You prefer the flexibility of payments that scale with your paycheck over the rigidity of a fixed bill.
• You want a clear cap on the total amount you will ever have to pay.

According to Sandy Baum, higher education finance expert, “Borrowing is not inherently bad; the question is how much, and under what terms.” By matching the loan terms to your personal financial reality, you transform debt from a burden into a manageable tool for your future.

Frequently asked questions

Citizens Bank lends to students at most Title IV accredited colleges and universities across the U.S. Edly is more selective, partnering with specific schools and programs that have proven track records of employment outcomes. You must check each lender’s website to verify if your specific school is eligible.

If you borrow from Citizens, you are still responsible for your monthly payments, though you may apply for temporary unemployment forbearance. With Edly, if your income is below their minimum threshold, your monthly payment is automatically $0, and you are not considered to be in default.

Legally and structurally, they are different. A loan is a debt obligation with a principal balance and interest rate. An ISA is a contract to share a portion of future income. However, for credit reporting and financial planning purposes, both should be treated as serious financial obligations that affect your debt-to-income ratio.

Yes, in many cases you can refinance an ISA into a traditional private student loan later, provided you meet the credit and income requirements of the refinancing lender. However, you typically cannot “refinance” a traditional loan into an ISA.

Citizens Bank almost always requires a cosigner for undergraduate students to meet credit and income criteria. Edly is designed to be accessible without a cosigner, relying instead on your program of study and future earning potential, though a cosigner may still improve your terms in some cases.

If you qualify for a low fixed rate with Citizens and make consistent payments, the traditional loan is often cheaper for high earners. Edly may cost less for graduates who earn modest salaries or experience periods of unemployment, as the payments adjust downward.

Deciding between Citizens and Edly requires an honest look at your financial present and your professional future. Both lenders offer legitimate, safe pathways to bridge the funding gap, but they serve different needs.

• Citizens offers the stability of a traditional bank with predictable payments, making it ideal for families with strong credit who want to minimize interest costs.
• Edly offers the flexibility of an Income Share Agreement, providing a safety net for students who need income-based repayment protections or lack a cosigner.
• Check your credit: If you have a strong credit history, Citizens likely offers a lower total cost. If credit is a barrier, Edly opens doors that traditional banks close.
• Federal first: Always exhaust federal grants and loans before signing with either private lender.

Both options can help you achieve your degree responsibly. The right choice is the one that lets you sleep at night—whether that’s knowing your payment will never change, or knowing it will never exceed what you can afford.

Ready to compare your options? See prequalified rates from Citizens and other top private lenders in minutes—without affecting your credit score.

References and resources

• Citizens Bank Student Loans – Official product overview and disclosures.
• Edly Student Outcomes – Official site for Edly ISAs and program details.
• StudentAid.gov – The Department of Education’s official guide to federal aid.
• CFPB Paying for College – Tools and resources for comparing financial aid offers.
• College Finance: Private Student Loans Guide
• College Finance: Federal Student Loans Guide
• College Finance: FAFSA Guide