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Private Student Loans

When preparing for college, one of the first things most students do is fill out a Free Application for Federal Student Aid (FAFSA) with the U.S. Department of Education. This gives you access to financial aid, including grants (essentially free money for college), federal work-study, and federal student loan programs.

As a general rule, federal student loans are better than private student loans when it comes to financing the portion of your college education not covered by grants, scholarships, or savings.

This is because federal student loans are backed by the federal government, have some of the most minimal eligibility requirements, and offer some of the best rates and repayment plan options. In addition, federal student loans generally do not require a co-signer.

That said, there are limits to how much you can borrow in federal student loans. If you reach that limit and still need funding to cover the cost of education, private student loans can help you out. This page aims to provide you with everything you need to know about private student loans.

Lender Range of APRs Repayment
Lengths
Minimum Credit Score
College Ave See Loan Fact Sheet

VARIABLE-rate APRs
0.94% - 11.98%2 VARIABLE-rate APRs
FIXED-rate APRs
2.94% - 12.99%2 FIXED-rate APRs

Repayment Length:

5 to 15-year terms available

Minimum Credit Score:

High-600s

Sallie Mae See Loan Fact Sheet

VARIABLE-rate APRs
1.13% - 11.23%1 VARIABLE-rate APRs
FIXED-rate APRs
4.25% - 12.59%1 FIXED-rate APRs

Repayment Length:

5 to 15-year terms available

Minimum Credit Score:

High-600s

Discover See Loan Fact Sheet

VARIABLE-rate APRs
1.29% - 10.59%* VARIABLE-rate APRs
FIXED-rate APRs
3.99% - 11.59%* FIXED-rate APRs

Repayment Length:

15-year terms available

Minimum Credit Score:

Not disclosed

FundingU See Loan Fact Sheet

VARIABLE-rate APRs
n/a VARIABLE-rate APRs
FIXED-rate APRs
7.99% - 13.49% FIXED-rate APRs

Repayment Length:

10-year terms available

Minimum Credit Score:

None

Union Federal See Loan Fact Sheet

VARIABLE-rate APRs
1.02% - 9.52%1,2 VARIABLE-rate APRs
FIXED-rate APRs
3.99% - 10.56%1,2 FIXED-rate APRs

Repayment Length:

7-year, 10-year, and 15-year terms available

Minimum Credit Score:

625

CommonBond See Loan Fact Sheet

VARIABLE-rate APRs
4.13% - 9.64% VARIABLE-rate APRs
FIXED-rate APRs
3.99% - 10.99% FIXED-rate APRs

Repayment Length:

5-year, 10-year, and 15-year terms available

Minimum Credit Score:

Not disclosed

SoFi See Loan Fact Sheet

VARIABLE-rate APRs
0.99% - 11.33% VARIABLE-rate APRs
FIXED-rate APRs
2.99% - 10.90% FIXED-rate APRs

Repayment Length:

N/A

Minimum Credit Score:

Not disclosed

Earnest See Loan Fact Sheet

VARIABLE-rate APRs
0.99% - 11.44% VARIABLE-rate APRs
FIXED-rate APRs
2.94% - 12.78% FIXED-rate APRs

Repayment Length:

15-year terms available

Minimum Credit Score:

650

Ascent See Loan Fact Sheet

VARIABLE-rate APRs
1.50% - 9.33% VARIABLE-rate APRs
FIXED-rate APRs
3.15% - 11.48% FIXED-rate APRs

Repayment Length:

5-year, 10-year, and 15-year terms available

Minimum Credit Score:

Not disclosed

Custom Choice See Loan Fact Sheet

VARIABLE-rate APRs
1.02% - 9.52%1,2 VARIABLE-rate APRs
FIXED-rate APRs
3.99% - 10.56%1,2 FIXED-rate APRs

Repayment Length:

7-year, 10-year, and 15-year terms available

Minimum Credit Score:

625

What You Need to Know About Student Loans

Here, we break down everything you need to know about student loan refinancing, including how to do your research and find the right loan, the application process and what it takes to get approved, and how to repay the new loan.

Research
Research

Research

The first part of the process is doing your research as a potential borrower. Look up different lenders and see how they compare. Keep in mind that federal student loans should (usually) be your first loan option. Private student loans should cover the gap between college costs and your federal loans and financial aid.

The following are some things to look up for each lender you’re considering:

  • How the “cost of borrowing” or interest rates compare
  • Whether variable- or fixed-rate loans are available
  • What the loan minimums and loan limits are
  • If there are any origination fees
  • How the lender determines creditworthiness
  • Repayment plan options and whether repayment of student loan debt is required while in school or if it can be deferred
  • If the lender has specific offerings geared toward the specific loan type you’re looking for (graduate student loans, undergraduate loans, etc.)
  • If the lender offers any borrower benefits, like a one-time graduation credit or a credit in exchange for excellent grades.

Make a list of your top choices and carefully weigh the differences. Note that some lenders will allow you to prequalify with a soft credit check and let you know what rates you can get, but it’s important to remember, that the better your credit, the better the interest rates. Some lenders might require a minimum credit score or income to even apply. This can help you decide between your final choices.

Apply
Apply

Apply

Before you apply for a private student loan, you should:

Complete the FAFSA

This can be done as soon as you’re accepted to a college. Ideally, it should be completed well before the first tuition payment is due, as it can take up to 10 days to get the results.

Accept all federal student aid

Because federal grants are essentially “free money” and federal student loans tend to have the best rates and terms, your next step after getting the FAFSA results should be to accept all federal aid. Upon reaching the aggregate loan limit, you can turn to a private student loan lender, borrowing as little money as possible.

Look into PLUS loans and parent loans

Parents of undergraduate students or graduate students may apply for PLUS loans and parent loans from the federal government for additional help paying for college. These are also often better than private student loans.

Do your research and find the right private lender

Note that many private lenders respond quickly to loan applications, but it’s a good idea to complete the process at least a few weeks before funds are needed.

As you prepare your loan application, it’s a good idea to find a creditworthy cosigner. You’re more likely to qualify for better rates with a cosigner. In fact, very few student borrowers are approved for a private student loan without a cosigner. You should also note any residency requirements for the loan, such as needing to be a U.S. citizen or permanent resident.

While loan applications vary, you will typically be required to provide your personal information, allow a credit check to be performed, and verify that you’re attending an eligible school. You can often complete these applications online.

Repay
Sign

Sign

Once you’re approved for a loan, you have to sign to accept it. When signing, you agree to all terms and conditions of the loan. The lender will then connect with your school to have the financial aid office certify that the amount you have been approved for, together with other financial aid, will not exceed the total cost of attendance of your school. The lender will then disburse directly to the school you’re attending. The law requires that lenders provide a three business day “right of rescission,” during which you can cancel the loan without obligation. After that point, the obligation is official. You (and your cosigner) will be responsible for the loan.

If the loan covers more than what you owe the school directly, you may be refunded the difference from the school. Keep in mind that this is borrowed money and should only be kept if needed to cover other costs associated with attending college (for example, off campus housing or travel expenses). Otherwise, you may want to repay the amount immediately to avoid additional interest fees in the future.

Repay
Repay

Repay

Many student loans allow for deferment while you’re in school and for a short grace period after you leave or your enrollment drops below half-time. This means you aren’t required to make payments during that time.

However, except for subsidized federal student loans, student loans still accumulate interest while in deferment. This means that, even if it isn’t required, it might be a good idea to make payments on any loans while in school to avoid compound interest after graduation.

After the loan grace period ends, the loan amount must now be repaid in monthly payments to avoid late fees. You should consult with your loan servicer about what repayment plans are available and sign up for autopay.

Note that while in repayment, you may be able to refinance for better loan terms or more flexible repayment options. Refinancing options can also include taking out a federal consolidation loan to roll all of your federal loan payments into one new federal loan. Private student loans are not eligible for federal student loan consolidation but can be refinanced by private lenders if you qualify. For recent or soon-to-be grads, some private student loans offer “cosigner release” after making a sufficient number of on-time payments and passing a credit and income test, potentially freeing your cosigner from any obligation to the rest of the loan balance.

Individual Student Loan Lender Fact Sheet

As mentioned, it’s important to do your research. CollegeFinance.com aims to make that easier for borrowers in repayment by doing the legwork for you. Below are individual fact sheets for each provider.

College Ave

Variable APR

Fixed APR

Variable APR: 0.94% - 11.98%2

Fixed APR: 2.94% - 12.99%2

  • Apply in as little as 3 minutes and get an instant credit decision
  • Multiple repayment options from deferred to immediate principal and interest
  • Choice of how long you take to repay the loan – 5, 8, 10, or 15 years3
  • You can see if you’ll qualify and what rate you’ll get without a hard credit check

  • Choice of  how long you take to repay the loan – 5 through 20 year terms
  • .25% rate reduction when you make required payments by automatic debit
  • Cosigner release option available if half of the repayment period has passed and borrower meets a certain payment income requirement (considered a con by Nerdwallet)
  • Can check rate and qualifications without a hard credit check
  • Available six-month grace period extension

  • Does not publicly list many eligibility requirements on its website, which requires borrower or refinancers to get a quote
  • Has a maximum forbearance period of 12 months and is limited to 3 or 6 month increments

College Ave Highlights

  • You can use this loan to pay for tuition, student fees, housing, books, and more. Borrow up to 100% of your cost of attendance (minimum $1,000)
  • The co-signer release period is 24 months, in line with private lending industry standards.
  • Loan terms (how long you have to repay the loan) range from 5 to 15 years. In general, the longer the repayment terms of a loan, the smaller the monthly payment you’ll have to make.
  • 0.25% interest rate reduction when you make required payments by automatic debit2
  • Flexible repayment options available:
    • Deferred payment: You wait to start making payments until after you finish studying. While this is easier in the present, it means you’ll have to pay more interest in the long run.
    • Flat payment: Make monthly payments of a flat fee (approximately $25, although case-by-case details vary) while studying. Consistent payments will help keep accrued interest low.
    • Interest-only payment: Start paying the interest while you’re still studying and save the principal repayment for later.
    • Full principal and interest payment: Immediately repay your interest and principal. In the long run, this will save you the most money.

Disclosures
Sallie Mae

Variable APR

Fixed APR

Variable APR: 1.13% - 11.23%1

Fixed APR: 4.25% - 12.59%1

  • Cover all types of learning, whether you're studying online or on campus.
  • Chegg Study - Get 4 months of study help included with your Undergraduate Loan.2
  • Consider adding a cosigner: Student are nearly 4X more likely to be approved with a cosigner3 and it may help you get a better rate.

  • No origination fees
  • 100% of school-certified costs covered
  • Available for students attending online classes, summer classes, or less than half-time
  • Non-U.S. citizen and DACA students can apply with a U.S. cosigner 
  • Offers loans to part-time students

  • Only offers a 12 month period of forebearance 
  • Does not publicly list most eligibility requirements on its website

Sallie Mae Highlights

  • Lowest rates shown include Auto Debit discount.1
  • Choose from multiple repayment options, including no payments while in school.1
  • Ability to make payments while in school.

Disclosures
Discover

Variable APR

Fixed APR

Variable APR: 1.29% - 10.59%*

Fixed APR: 3.99% - 11.59%*

  • Zero fees – No application fee. No origination fee. No late fees
  • Cover up to 100% of school-certified college costs - tuition, housing, books and more2
  • Apply in 15 minutes or less - it's fast and easy

  • Zero application or origination fees
  • No cosigner required
  • FDIC insured 
  • Available one time cash reward n each new loan if you get at least a 3.0 GPA
  • No late fees
  • Can refinance without a degree

  • No cosigner release (if there is a cosigner)
  • Applying for a loan will temporarily hurt your credit score
  • Loan type only has one repayment plan (15 years for undergraduates and 20 years for graduates)

Discover Highlights

  • Get a 0.25% interest rate reduction while enrolled in automatic payments1

Disclosures
FundingU

Variable APR

Fixed APR

Variable APR: n/a

Fixed APR: 7.99% - 13.49%

  • Pre-approval in minutes.
  • All of their loans are fixed interest. None of their loans have hidden fees.
  • Every student is assigned a single Loan Officer whose job is to be helpful.

  • No cosigner or credit history needed to get a loan
  • DACA students with an eligible Social Security number can qualify
  • Can check for rate and qualification without a hard credit check

  • Not available in 22 states
  • Payments are required during the grace period and while in school
  • low maximum funding amount

N/A

Disclosures
Union Federal

Variable APR

Fixed APR

Variable APR: 1.02% - 9.52%1,2

Fixed APR: 3.99% - 10.56%1,2

  • Prequalify in minutes with no impact to your credit score4
  • Limited time offer extended! Get 0.50% interest rate reduction on new loans3
  • 0.25% interest rate reduction after making 36 consecutive on-time payments4

  • Multiple interest rate discounts available 
  • Available in-school repayment options
  • No fees
  • Variable and fixed interest rates available 

  • Only three available term lengths
  • Long cosigner release period
  • Not available in every state

Union Federal Highlights

  • Available to international students applying with an eligible cosigner who is a U.S. citizen or permanent resident alien
  • Past Due Balance option is now extended to 12 months8
  • 0.25% interest rate reduction for customers who elect auto pay6
  • Multiple repayment terms and repayment options to choose from7

Disclosures
CommonBond

Variable APR

Fixed APR

Variable APR: 4.13% - 9.64%

Fixed APR: 3.99% - 10.99%

  • Award-winning Care team available when you need them
  • Protections you need like grace period and forbearance
  • Check your rate with your cosigner in 2 minutes or less

  • 24 months of forbearance available throughout the life of the loan
  • Offers natural disaster forebearance which allows borrowers to pause payments during a national emergency such as Covid-19
  • Minimum loan amount is only $2,000
  • Allows for cosigner release after 24 consecutive on-time payments
  • Allows to refinance a parent PLUS loan in your name
  • Can check rate and qualification without a hard credit check

  • Cosigner required unless pursuing a business, medical, or dental degree
  • Loan in not available in Mississippi or Nevada

CommonBond Highlights

  • Low rates and flexible payment plans
  • No hidden fees: No application, origination, or prepayment fees

Disclosures
SoFi

Variable APR

Fixed APR

Variable APR: 0.99% - 11.33%

Fixed APR: 2.99% - 10.90%

  • Easy online application!
  • No origination fees, late fees, and no insufficient fund fees
  • Flexible repayment options to help you find the right loan for you
  • 0.25% discount when you set up autopay*

  • No origination fees, late fees, or insufficient fund fees
  • .25% discount with autopay
  • Can refinance parent PLUS loan in student name
  • Can check qualification and rate without a hard credit check

  • No cosigner release available 
  • High minimum loan size
  • 680 credit score required for loan

N/A

Disclosures
Earnest

Variable APR

Fixed APR

Variable APR: 0.99% - 11.44%

Fixed APR: 2.94% - 12.78%

  • Skip a payment once per year (once repayment period restarted)**
  • Check your eligibility in just 2 minutes
  • 9 month grace period (3 months more than most lenders)***

  • Flexible terms that let you pick your exact monthly payment or switch between fixed and variable rates
  • No fees for origination, prepayment, or loan disbursement
  • Two-minute rate check with no obligation or impact to your credit score
  • No cosigner needed
  • Allows eligible borrowers to skip a payment every 12 months 
  • Borrower get a $200 referral bonus if they refer a friend

  • No cosigner release (Bankrate)
  • No cosigner option available (Nerdwallet)
  • Requires a credit score of at least 650, so those with poor credit are ineligible
  • Not available in Kentucky or Nevada

Earnest Highlights

  • Flexible repayment options
  • Covers up to 100% of the school’s certified cost of attendance
  • No fees for origination, disbursement, prepayment, or late payment
  • Fast application and decision-making process

Disclosures
Ascent

Variable APR

Fixed APR

Variable APR: 1.50% - 9.33%

Fixed APR: 3.15% - 11.48%

  • Cash back. After graduation, you may be eligible to get 1% of your loan back as a cash reward.
  • Referral bonus. Tell your friends about Ascent, and you could earn up to $525.
  • No fees. You’ll pay no money to open an account, make a payment, or handle other routine tasks.
  • Small loans. Some students need to borrow large amounts every year. Ascent offers loans as big as $200,000, but if you need just $1,000, they can help you too.

  • Ability to sign without a cosigner even with no credit history, and ability to remove cosigner after 24 consecutive on-time payments
  • Small loan amounts available, with a minimum requirement of only $1,000
  • A total of 24 months of forbearance is available throughout the life of the loan
  • Borrowers who graduate within 5 years get one time payment equal to 1% of their loan amount
  • International students are eligible with a cosigner 

  • Limited repayment terms
  • Only juniors and seniors qualify for non-cosigned loans based on their future income, freshmen and sophomores are ineligible 
  • Students enrolled less than half-time are not eligible 
  • Cosigner release not available to international students

N/A

Disclosures
Custom Choice

Variable APR

Fixed APR

Variable APR: 1.02% - 9.52%1,2

Fixed APR: 3.99% - 10.56%1,2

  • Adding a cosigner with good financial standing makes approval 4x more likely
  • Past Due Balance option is now extended to 12 months7
  • 2.00% principal reduction with proof of graduation5

  • Borrower who complete their degrees get a reward of 2% off their principal balance upon graduation
  • No cosigner needed to apply
  • Ability to pause payments for up to 12 months through the life of the loan in 2 month increments in the event of a national disaster or job loss

  • Loans are not available to international students or people in Arizona, Iowa, or Wisconsin

Custom Choice Highlights

  • Multiple repayment terms and repayment options to choose from7
  • 0.25% interest rate reduction for customers who elect auto pay5
  • Prequalify in minutes4
  • For a limited time get 0.50% interest rate reduction on new loans3

Disclosures

Refinancing Student Loan FAQs

Check below for answers if you still have questions about refinancing your student loans.

Federal student loans are backed and subsidized by the federal government. Because of this, they often have better rates and repayment terms than private student loans. Private student loans are best used to cover the funding gap between federal student aid and college expenses.

Different lenders have different criteria. Often, your credit history and credit score are important. If you don’t have much of a credit history, you may qualify with a cosigner. In fact, a creditworthy cosigner is almost ALWAYS a requirement.

Private student loans are not bad, but they are a real obligation that will be carried by a borrower and cosigner for many years. As mentioned, federal student loans are usually better, but if you meet your loan limit and still need funds to cover expenses, private student loans can save the day. As long as you research the lender and borrow responsibly (meaning: do not borrow more than you need or more than you can afford to repay), private student loans can play a vital role in covering your college costs.

If your application is accepted, you will be offered a loan. You must sign an agreement accepting the loan. The funds are then disbursed to your school. Depending on the loan, you may enter repayment immediately, or you may be able to defer payment until after graduation.

Unless you have a strong credit history and strong income, the answer is almost always yes. Lenders want to know they can expect repayment. A good credit history and demonstrated income are how they determine if the loan will be repaid.

Loan limits can vary from lender to lender, but you generally can borrow up to the full cost of your education (as defined by your school) less other aid received.

Refinance Your Student Loans Today

If you’re ready to refinance your student loans, let CollegeFinance.com help you with the research and provide you with everything you need to know about paying off student debt. Click the links in the lender fact sheet to learn more about each refinance option.

View Loan Options