Citizens vs MPOWER: Private student loans compared

Citizens Bank serves traditional U.S. borrowers with strong credit or cosigners, while MPOWER Financing specializes in international and DACA students who lack U.S. credit history. Your choice depends primarily on your citizenship status and access to a qualified cosigner rather than interest rates alone.

In this guide, you’ll learn how each lender’s eligibility rules, interest rates, and unique benefits compare—plus which option is right for your specific financial situation. While both lenders offer legitimate funding solutions, they operate with fundamentally different underwriting models designed for distinct types of students.

Most families turn to private lenders only after exhausting federal financial aid. Understanding the difference between a traditional bank like Citizens and a specialized lender like MPOWER is critical to ensuring you apply for a loan you can actually qualify for, saving time and potential disappointment during the financial aid process.

Context: Understanding these two lenders

Before diving into the numbers, it is helpful to understand the background and mission of each lender, as this explains why their requirements differ so significantly.

Citizens Bank is one of the oldest and largest financial institutions in the United States, founded in 1828. As a traditional bank, they offer a broad range of financial products, including private student loans for undergraduate, graduate, and parent borrowers. Their student loan program is designed for U.S. citizens and permanent residents who have established credit histories or access to creditworthy cosigners. Because they rely on traditional credit scoring models, they can offer highly competitive rates to low-risk borrowers.

MPOWER Financing, founded in 2014, is a mission-driven fintech company specifically created to address a gap in the market: financing for international students and DACA recipients studying in North America. Traditional lenders typically reject these students due to a lack of U.S. credit history or citizenship. MPOWER uses a forward-looking underwriting model that evaluates a student’s future earning potential rather than their past credit history. Consequently, they do not require collateral or cosigners.

This distinction is vital because it dictates eligibility. Citizens Bank operates within the standard U.S. banking framework, prioritizing credit scores and debt-to-income ratios. MPOWER operates to expand access, serving high-potential students who are often shut out of the traditional banking system.

Citizens vs MPOWER: Quick comparison

To help you quickly assess which lender fits your profile, the table below compares the core features of Citizens Bank and MPOWER Financing side-by-side. This overview highlights the stark differences in their target audiences and loan structures.

Source: Citizens Bank and MPOWER Financing websites (Data as of January 2025)

Interpretation: If you are a U.S. citizen with a creditworthy cosigner, Citizens Bank likely offers more flexibility in terms of repayment lengths and potentially lower interest rates. However, if you are an international student, DACA recipient, or asylum seeker, MPOWER is designed specifically for you, removing the barriers of citizenship and cosigner requirements that typically block access to funding.

Citizens vs MPOWER: Eligibility requirements

Determining if you qualify is the first step in the application process. Because these lenders serve such different demographics, their eligibility criteria rarely overlap.

Citizens Bank maintains strict citizenship requirements. Borrowers must be U.S. citizens or permanent residents (green card holders) living in the United States. International students can technically apply, but they must have a creditworthy cosigner who is a U.S. citizen or permanent resident, which is often a significant hurdle.

MPOWER Financing has no citizenship requirement for the borrower. They serve international students (on F-1, J-1, and other visas), DACA recipients, refugees, and asylum seekers. U.S. citizens can also apply, but the product is optimized for those who cannot easily access federal or traditional private loans.

Citizens Bank evaluates applications based on traditional credit metrics. Borrowers need a good to excellent credit history and sufficient income to repay the loan. Since most undergraduate students have thin credit files and limited income, a cosigner is almost always necessary. According to Mark Kantrowitz, financial aid expert, “Most students will need a cosigner to qualify for a private student loan.” This aligns with Citizens’ model, where a strong cosigner can help secure approval and lower interest rates. Learn more about cosigner responsibilities here.

MPOWER Financing does not require a cosigner. In fact, they do not allow cosigners to improve an application. Instead, they use a proprietary algorithm that assesses your academic success and future earning potential. They look at your university, degree program, and expected career path to determine if you are a good candidate for a loan.

Citizens Bank requires borrowers to be enrolled at least half-time in a degree-granting program at an eligible Title IV school. Their list of eligible institutions is extensive, covering most accredited colleges and universities in the U.S.

MPOWER Financing is more selective regarding schools. According to MPOWER Financing, you must be accepted or enrolled at one of their 400+ partner universities in the U.S. or Canada as of January 2025. Because their underwriting relies on future earnings, they partner with schools that have strong track records of graduate employability. You should verify your school is on their approved list before applying.

Interest rates and APR comparison

Interest rates determine the total cost of your loan over time. Understanding how each lender sets these rates helps manage expectations regarding monthly payments and total interest paid.

As of January 2025, Citizens Bank offers both fixed rates of 5.99% - 15.00% APR and variable rates of 6.98% - 15.69% APR.

• Fixed Rates: Stay the same for the life of the loan, providing predictable monthly payments.
• Variable Rates: May start lower but can fluctuate based on market conditions (typically tied to SOFR), meaning your payment could increase over time.

Citizens Bank rates are generally competitive with other major private lenders. However, the lowest advertised rates are reserved for borrowers (or cosigners) with excellent credit scores, who choose shorter repayment terms, and who sign up for automatic payments. Existing Citizens Bank customers may also qualify for a loyalty discount.

As of January 2025, MPOWER Financing typically offers fixed interest rates only.

• Fixed Rates: MPOWER’s rates are generally higher than the starting rates of traditional banks like Citizens.

The higher rates reflect the higher risk MPOWER takes by lending to students without credit history, collateral, or cosigners. While the rate may be higher than a prime loan from a bank, it is often comparable to or better than other unsecured credit options available to international students. Additionally, MPOWER offers interest rate discounts for borrowers who make consecutive on-time payments through autopay and for providing proof of graduation and employment.

Honest Assessment: If you have excellent credit and a U.S. cosigner, Citizens Bank will likely offer a lower Annual Percentage Rate (APR). However, for students who cannot qualify for Citizens, MPOWER provides essential access to capital where none might otherwise exist. Compare current private student loan rates here.

Loan amounts, terms, and repayment options

Beyond interest rates, the structure of the loan—how much you can borrow and how you pay it back—affects your daily life during and after college.

Both lenders adhere to the standard rule that you cannot borrow more than your school’s certified Cost of Attendance (COA) minus other financial aid received.

• Citizens Bank: According to Citizens Bank, you can borrow up to the full cost of attendance as of January 2025, with lifetime limits often exceeding $150,000 depending on the degree type (e.g., medical and law school limits are higher).
• MPOWER Financing: According to MPOWER Financing, there is a lifetime borrowing limit of $100,000 as of January 2025. While this is substantial, students in very expensive programs or those who need funding for multiple years should calculate if this cap will cover their entire education.

According to Betsy Mayotte, student loan expert, “In general, federal loans should be your first stop, but private loans can be appropriate when you’ve maxed out your federal eligibility.” Always ensure you have utilized all federal options before taking out the maximum private loan amount. Read more about federal vs. private loans.

According to Citizens Bank, repayment terms of 5, 10, or 15 years are available as of January 2025. Choosing a shorter term (like 5 years) usually results in a lower interest rate but a higher monthly payment. A longer term (15 years) lowers the monthly payment but increases the total interest paid over the life of the loan.

According to MPOWER Financing, a standard 10-year repayment term is offered as of January 2025. This simplicity streamlines the process but offers less flexibility for borrowers who might prefer a longer runway to lower their monthly obligation or a shorter sprint to get out of debt quickly.

How you manage payments while studying is a key differentiator:

• Citizens Bank: Offers multiple choices. You can choose full deferment (pay nothing while in school), interest-only payments (pay accrued interest to prevent balance growth), or immediate repayment (start full principal and interest payments right away). Note that deferring payments is the most expensive option long-term.
• MPOWER Financing: Requires interest-only payments while you are in school and for the six-month grace period after graduation. This policy ensures you are actively building credit history and prevents your loan balance from ballooning due to capitalized interest. Full principal and interest payments begin six months after graduation.

Unique features and benefits

Sometimes the deciding factor isn’t the rate, but a specific feature that aligns with your personal or family needs.

• Multi-Year Approval: This is a significant convenience feature. Eligible borrowers can apply once and secure funding for their entire degree program. In subsequent years, you simply request the funds you need without undergoing another hard credit check or full application process.
• Cosigner Release: According to Citizens Bank, borrowers can apply to release their cosigner from the loan after making 36 consecutive, on-time principal and interest payments. The primary borrower must also meet credit and income requirements at that time.
• Loyalty Discounts: Existing customers with a qualifying account at Citizens Bank can receive a rate discount, lowering the overall cost of the loan.

• No Cosigner Required: This is MPOWER’s defining feature. For international students who do not have family in the U.S., this removes the single biggest barrier to financing.
• Visa Support Letters: MPOWER provides support letters to help international students demonstrate proof of funds during the visa application process—a critical service for students securing their F-1 or J-1 status.
• Career Support Services: MPOWER invests in its borrowers’ success by offering resume reviews, interview preparation, and networking opportunities. This focus on career outcomes helps ensure graduates can secure high-paying jobs in the U.S. or Canada to repay their loans.

Which lender is right for you?

Making a final decision comes down to matching your profile with the right lender. Here is a breakdown to help you decide.

• You are a U.S. citizen or permanent resident.
• You have a strong credit history or a creditworthy cosigner willing to apply with you.
• You want the lowest possible interest rate and are willing to undergo a rigorous credit check.
• You value the convenience of Multi-Year Approval to avoid reapplying every year.
• You prefer the stability and customer service infrastructure of a large, traditional bank.
• You want the option to defer all payments while you are in school.

• You are an international student, DACA recipient, or asylum seeker.
• You do not have a U.S.-based cosigner or prefer not to burden a family member.
• You lack a U.S. credit history but have strong academic potential.
• You are attending one of MPOWER’s partner universities.
• You value additional support services like visa guidance and career coaching.
• Learn more about loans for international students.

• You are a U.S. citizen without a cosigner who is attending a top-tier university. While Citizens typically requires good credit, MPOWER also lends to domestic students based on future earnings. Comparing offers (if you qualify for both) allows you to see if MPOWER’s no-cosigner model or Citizens’ traditional model offers better terms for your specific situation.

Reminder: Regardless of which private lender you choose, you should always exhaust federal loan options first. Federal Direct Loans offer protections like income-driven repayment plans and potential loan forgiveness that private lenders do not provide.

Application process: What to expect

Once you have decided on a lender, knowing what to expect can speed up your access to funds.

1. Preparation: Gather your social security number, school information, and income details. If applying with a cosigner, they should be ready to provide their financial information as well.
2. Online Application: Complete the application on the Citizens website. This typically takes about 15 minutes.
3. Credit Check: Citizens will perform a hard credit inquiry, which may temporarily lower your credit score by a few points.
4. Decision: Decisions are often instant or provided within a few business days.
5. Disbursement: Once approved and certified by your school, funds are sent directly to the university to cover tuition and fees.

1. Check Eligibility: First, verify that your school is on MPOWER’s partner list via their website.
2. Online Application: Submit your application online. You will need your passport, visa documentation, admission letter, and past academic records.
3. Review Process: MPOWER does not rely on a traditional FICO score check but reviews your documents to assess academic and career potential. This process can take longer than an automated bank review.
4. Verification: You may be asked to upload additional documents to verify your identity and enrollment status.
5. Disbursement: Upon approval and school certification, funds are disbursed directly to your school.

Tip: Apply as early as possible. School certification (where the financial aid office verifies your enrollment and loan amount) can take several weeks regardless of which lender you choose.

Frequently asked questions

Yes, MPOWER Financing specializes in no-cosigner loans for international and DACA students. Citizens Bank generally requires a cosigner for undergraduate students unless the student has established credit and significant income. Read more about no-cosigner options.

Citizens Bank typically offers lower interest rates for U.S. borrowers with excellent credit or strong cosigners. MPOWER’s rates are generally higher because they lend to students without credit history or collateral, but they provide critical access for those who cannot qualify for traditional bank loans.

Generally, no. Citizens Bank requires borrowers to be U.S. citizens or permanent residents. International students can only apply if they have a creditworthy cosigner who is a U.S. citizen or permanent resident. If you do not have such a cosigner, MPOWER is the better option.

No, MPOWER does not require any cosigner. Their underwriting model is based on your future earning potential, your university, and your degree program rather than the credit history of a family member.

Citizens Bank offers a cosigner release option. You can apply to release your cosigner after making 36 consecutive, on-time principal and interest payments. You must also meet the lender’s credit and income requirements on your own at the time of the request.

You should always prioritize federal student loans. They offer fixed interest rates, income-driven repayment plans, and forgiveness programs that private lenders do not match. Use private loans like those from Citizens or MPOWER only to cover the funding gap after you have maximized your federal aid. See the full breakdown of federal vs. private loans.

Choosing between Citizens Bank and MPOWER Financing is rarely a matter of preference—it is usually a matter of profile. The right lender for you depends entirely on your citizenship status, credit history, and access to a cosigner.

Key takeaways:

• Citizens Bank is the strong choice for U.S. families with good credit who want competitive rates, flexible repayment terms, and the stability of a traditional bank.
• MPOWER Financing is the essential choice for international and DACA students who need funding without the barriers of U.S. citizenship or cosigner requirements.
• Compare your options: If you are eligible for both, compare the total cost of the loan (APR + fees) over the full term, not just the monthly payment.
• Borrow responsibly: Only borrow what you absolutely need to cover your education costs to keep your future monthly payments manageable.

Financing your education is an investment in your future earning power. By choosing the lender that aligns with your background and needs, you can secure your degree with confidence.

Compare rates from top private lenders—trusted by over 50,000 students and families

References and resources

For further research and to verify current terms, please consult the following resources:

• Citizens Bank Student Loans: citizensbank.com
• MPOWER Financing: mpowerfinancing.com
• Federal Student Aid: StudentAid.gov
• College Finance: Private Student Loan Guide
• College Finance: Federal vs. Private Loans
• College Finance: Complete Guide to Cosigners