College Ave vs Edly: Private student loans compared

Short answer: Choose College Ave if you (or a cosigner) can qualify for low fixed rates and want predictable payments; choose Edly if you lack credit history and prefer income-tied payments with built-in downside protection.

Choosing how to fund the gap between federal aid and the total cost of college is one of the most significant financial decisions students and families make. While federal student loans should always be the first stop, they often have annual limits that don’t cover everything. That leaves many families deciding between private student loans and alternative financing methods.

This guide compares two distinct approaches to filling that funding gap: College Ave, a leading traditional private lender, and Edly, a marketplace for Income Share Agreements (ISAs). You will learn how their eligibility requirements differ, compare their costs side-by-side, and understand the repayment terms of each model. By the end, you will have the information needed to determine which financial tool aligns best with your credit profile, career goals, and risk tolerance.

Context: Traditional private loans vs income share agreements

Before comparing interest rates or repayment terms, it is crucial to understand that College Ave and Edly offer fundamentally different financial products. College Ave provides traditional private student loans. In this model, you borrow a specific amount of money and agree to pay it back with interest over a set period (e.g., 10 years). The cost of the loan is determined by an interest rate, which is based on your (or your cosigner’s) creditworthiness.

Edly, on the other hand, specializes in Income Share Agreements (ISAs). With an ISA, you receive funding for school in exchange for a percentage of your future gross income for a fixed period. There is no traditional interest rate or principal balance. Instead, your payments fluctuate based on how much you earn after leaving school. If your income is high, you pay more (up to a cap); if your income is low, you pay less or nothing at all for that month.

According to College Ave, the company was founded in 2014 with a focus exclusively on student lending and a mission to simplify the borrowing process. Edly, founded in 2020 according to their official website, operates as a marketplace connecting investors with students, focusing on outcome-based financing rather than credit history.

For a broader understanding of how private lending works, you can review our guide to private student loans.

Quick comparison: College Ave vs Edly at a glance

To help you orient yourself quickly, here is a high-level comparison of how these two options stack up against each other.

Source: College Ave and Edly official websites (accessed January 2025)

Eligibility requirements: Who qualifies for College Ave vs Edly

The biggest differentiator between these two lenders is who they approve. College Ave evaluates your past and present financial health, while Edly evaluates your future earning potential.

College Ave follows traditional underwriting standards. According to College Ave as of January 2025, borrowers typically need a good-to-excellent credit score (often mid-600s or higher) and a steady income. Since many college students have thin credit files and little income, applying with a creditworthy cosigner is standard practice. According to Mark Kantrowitz, financial aid expert, “Most students will need a cosigner to qualify for a private student loan.”

According to College Ave (accessed January 2025), borrowers must be U.S. citizens or permanent residents attending an eligible degree-granting school. International students can apply if they have a valid U.S. Social Security number and a creditworthy U.S. cosigner. If you are unsure about asking a parent or guardian for help, read more about cosigner responsibilities and risks.

Edly flips the script on eligibility. According to Edly’s website as of January 2025, they do not require a credit score, credit history, or a cosigner. Instead, Edly underwrites based on the school you attend, your major, and your progress toward graduation. Their model predicts your future income to determine if you are a good candidate for funding.

However, this means Edly is much more restrictive regarding schools. You must be attending an “approved” program, which typically includes schools and majors with strong employment outcomes, such as STEM degrees, nursing, or specialized coding bootcamps. Edly is generally available to U.S. citizens and permanent residents (as of January 2025). If you are in a major with lower projected starting salaries or attending a school outside their network, you may not qualify regardless of your financial need.

College Ave interest rates and costs

When you borrow from College Ave, your costs are defined by an Annual Percentage Rate (APR). This rate is determined by your credit profile (or your cosigner’s), the loan term you choose, and current market conditions.

According to College Ave (as of January 2025), borrowers can choose between fixed rates of 3.49% - 12.99%^{2 APR and variable rates of 1.19% - 11.98%2 APR. Fixed rates provide stability, allowing for precise budgeting, while variable rates often start lower but carry the risk of increasing over time. Enrolling in automatic payments typically reduces your interest rate by 0.25 percentage points, a standard benefit that lowers the total cost of borrowing.}

As reported by College Ave, the lender charges no application fees or origination fees as of January 2025, meaning 100% of the money you borrow goes to your school. However, late payment fees and returned payment fees do apply if repayment isn’t managed correctly. The best rates are reserved for borrowers with excellent credit and shorter repayment terms (e.g., 5 or 8 years).

It is smart to check your potential rate before applying formally. You can use College Ave’s prequalification tool to see estimated rates without a hard credit inquiry.

Compare prequalified rates from College Ave and other lenders without impacting your credit score

Edly ISA payment structure and costs

Edly’s cost structure is entirely different because it is not a loan in the traditional sense. Instead of an interest rate, you agree to an “Income Share Percentage.”

According to Edly’s terms (accessed January 2025), this percentage typically ranges between 2% and 10% of your gross monthly income, depending on your specific program and the amount of funding you receive. You only make payments when your income exceeds a “Minimum Income Threshold,” which is often set around $30,000 to $40,000 per year.

To protect high earners from paying an unlimited amount, Edly includes a “Payment Cap.” As reported by Edly as of January 2025, this is the maximum amount you will ever pay back, typically set at 1.5 to 2.5 times the funded amount. For example, if you received $10,000 with a 2x cap, you would never pay more than $20,000 total, regardless of how high your salary goes.

While this model offers safety for those entering lower-paying jobs, it can be more expensive than a traditional loan for high earners. If you graduate and immediately land a high-paying job, you might reach the payment cap quickly, resulting in a higher effective APR than a standard private loan.

Repayment terms and borrower protections

The experience of paying back your funding is just as important as the initial approval. Here is how the repayment journey compares between the two.

According to College Ave as of January 2025, the lender offers significant flexibility in how you structure your loan. You can choose repayment terms ranging from 5 to 15 years. During school, you can choose to make full payments, interest-only payments, a flat $25 monthly payment, or defer all payments until after graduation. Making payments while in school reduces the total cost of the loan significantly.

Once you leave school, there is a 6-month grace period before full principal and interest payments begin. If you face financial difficulty, College Ave offers forbearance options, though these are generally limited compared to federal loans. A key feature for families is the cosigner release option. According to College Ave, after 24 consecutive on-time payments of principal and interest, qualified borrowers can apply to release their cosigner from the loan obligation.

According to Edly’s official documentation as of January 2025, the repayment term is defined by a number of required payments or a maximum window of time (e.g., 5 years). Your obligation ends when one of three things happens: you make the required number of payments, you reach the payment cap, or the maximum contract period expires.

The strongest borrower protection with Edly is the built-in downside protection. If you lose your job or your income drops below the minimum threshold, your payments automatically pause. There is no need to apply for forbearance or prove hardship; the payment obligation simply stops until your income recovers. Since there is no cosigner, there is never a risk to a parent’s credit score or financial standing.

For more details on managing debt after graduation, read our guide to student loan repayment strategies.

College Ave vs Edly: Who should choose which

Neither lender is universally “better.” The right choice depends entirely on your financial background and career trajectory. Here is a framework to help you decide.

• You have a strong credit history or a creditworthy cosigner. If you can qualify for competitive fixed rates, a traditional loan is often the lowest-cost option.
• You want predictable monthly costs. You prefer knowing exactly how much you will pay every month for the next 10 years, allowing for precise budget planning.
• You are attending a traditional university. College Ave lends to students at the vast majority of accredited Title IV schools.
• You want to minimize total cost. By paying interest while in school and securing a low rate, you will likely pay less overall than with an ISA.
• You plan to release your cosigner. You value the ability to remove your parent from the loan after two years of on-time payments.

Ready to see your rates? Compare offers from College Ave and other top private lenders in minutes.

• You do not have a cosigner. If you cannot get approved for a traditional loan due to credit history, Edly provides access to funding based on your potential.
• You are entering a field with variable income. If your career path might involve commission-based work, startups, or periods of lower income, the income-tied payments offer safety.
• You are attending a specialized program. You are enrolled in a coding bootcamp or vocational program that traditional lenders might not cover.
• You want downside protection. You are worried about the economy or job market and don’t want the stress of a fixed bill if you are unemployed.
• You are comfortable with the trade-off. You accept that you might pay back more than the original amount in exchange for the flexibility and access to funds.

Note: Before choosing either, ensure you have maximized all federal student loan options. Federal loans offer protections and benefits that private lenders and ISAs generally cannot match.

Frequently asked questions: College Ave vs Edly

For College Ave, it is difficult for most undergraduate students to qualify without a cosigner due to credit and income requirements. Edly, however, never requires or accepts a cosigner; approval is based on your school program and academic progress, not your credit history.

It depends on your income. If you secure a low interest rate with College Ave, your total cost is often lower and predictable. With Edly, if you land a high-paying job immediately, you could hit the payment cap (e.g., 2x what you borrowed), making it more expensive. However, if your income remains low, Edly could cost less than a traditional loan.

Technically, yes, you can use a private student loan refinance to pay off an ISA, provided the refinancing lender allows it. However, ISAs are unique contracts, and once you sign, the terms regarding income share are set. Refinancing would convert that flexible obligation into a fixed monthly debt.

With College Ave, you must contact the lender immediately to discuss forbearance options, though interest will likely continue to accrue. According to Edly, if your income drops below the minimum threshold (typically $30,000 to $40,000 per year as of January 2025), your payments pause automatically without penalty, serving as a built-in safety net.

No. Edly works with a specific network of approved schools and programs that have demonstrated strong employment outcomes. College Ave has much broader eligibility, covering most accredited Title IV degree-granting institutions in the United States.

Deciding between College Ave and Edly is less about comparing apples to apples and more about choosing the financial model that fits your life. College Ave offers the stability and potentially lower cost of a traditional loan, rewarding families with good credit. Edly offers accessibility and insurance against low income, opening doors for students who might otherwise be shut out of financing.

Key Takeaways:

• College Ave is best for borrowers with cosigners seeking low rates and fixed payments.
• Edly is best for students without credit history who want payments tied to their income.
• Protection varies: College Ave offers cosigner release; Edly offers automatic payment pauses for low income.
• Eligibility differs: College Ave looks at you; Edly looks at your program.
• Federal first: Always exhaust federal Direct Subsidized and Unsubsidized loans before applying for either option.

The “right” choice is the one that allows you to complete your education without jeopardizing your future financial stability. Take the time to check your eligibility for both, do the math on potential repayment scenarios, and choose the path that gives you the most peace of mind.

References and resources

• College Ave Student Loans Official Website (Rates, terms, and eligibility accessed January 2025)
• Edly Official Website (ISA terms and approved programs accessed January 2025)
• StudentAid.gov (Federal student loan options and limits)
• Consumer Financial Protection Bureau (CFPB) (Guidance on student loans and ISAs)