You’ve visited colleges, explored majors, and decided where to attend school. The next step is figuring out how to pay for tuition, books, room and board, and other essential expenses. Scholarships and savings help, but they rarely cover everything. That’s where student loans come in. About 70% of college students rely on loans to fill the financial gap.
The first step for many is filling out the Free Application for Federal Student Aid (FAFSA). This form opens the door to federal financial aid, which usually offers better terms, like lower interest rates and flexible repayment plans. But sometimes, federal aid just isn’t enough, and that’s when private student loans become an option worth exploring.
Private student loans can seem like navigating a maze, with so many options, each with its own terms and conditions. Comparing them can feel like comparing apples to oranges. Interest rates, repayment terms, and loan limits can differ wildly from one lender to another. It can be overwhelming to understand these differences and find the right loan for you. In this article, we’ll dive into the details of one such lender to help you navigate this complex landscape.
Abe is one of these options.
About Abe
Abe is a newer name in the student loan marketplace, but it has the backing of Monogram, LLC, an established manager of more than $30 billion in private student loan assets.
Before launching Abe, Monogram, LLC spent 30 years servicing loans, managing assets, and consulting in the loan sector. They’ve built trust through a focus on regulatory compliance and data analysis via advanced technology.
As its name suggests, Abe’s focus is on “plain, honest student loans.” This includes a better buyer experience and transparent information that the borrower can understand.
Abe stacks up well against major competitors in terms of rates, repayment terms, zero fees, and other options.
Private loans are funded by DR Bank, Member FDIC.
Ranking 10/10 as Abe has the backing of Monogram, LLC, a company with years of experience behind the scenes in the student loan sector.
Our Process
As with all loans, there are several things to consider. These will be based on where you are attending school, how much you need to borrow, your (and if you have cosigners) credit scores, interest rates of the loan, and repayment terms.
We’re going to outline the features of Abe and how they compare to other lenders on a scale of 1 to 10 (A few factors we gave more weight to and those will be pointed out below.)
Overall Ranking
After looking at more than 15 factors and comparing the most popular private student loans on the market, we’ve given Abe a 5 out of a possible 5 ranking. This tied for our top ranking, with only a few categories less than perfect in our analysis.
Keep reading to explore the details of applying for and obtaining a loan with Abe and to understand how we arrived at this ranking.
Who Can Apply?
To qualify for a private student loan with Abe, students must be attending or enrolled to attend an eligible institution and reach the legal age of majority in your state (either 18 or 19) when granted the loan. You can start the application process at age 17.
Students must be US citizens, permanent resident aliens, or eligible non-citizens (DACA recipients). If you are not a US citizen, you must have a cosigner who meets these requirements.
While you can apply for a loan on your own, most students lack the income or credit for a good rate. You may need a cosigner.
While this did not factor into our rankings, your choice of school is a big deciding factor on whether you can apply for any loan. If you do not follow the traditional school path, you can still apply for a loan with Abe.
What is the maximum loan amount?
While some lenders cover 100% of the cost of attending school, Abe does put a cap on the loan amount. You can borrow as little as $1,000 or up to $99,999 per loan. The total cap for all student loans is $225,000.
Qualifying expenses include tuition and fees, room and board, books and supplies, transportation, and personal expenses.
You are encouraged to apply for federal aid before applying for a private student loan. Use private student loans to make up the balance.
To ensure you take out enough loans to pay for college, but not too much to have you drowning in debt, you’ll need to do some calculations. One rule of thumb is to not borrow more than what you anticipate you will earn in your first year in the working world.
Are there any fees to apply?
In addition to the cost of the student loan, lenders often add other fees for setting up and maintaining the loan. These costs can accumulate, so it’s wise to find a lender that waives them.
Abe does not charge application, origination, late payment, processing, forbearance, or fees to pay by debit card.
This helps borrowers budget their student loan costs more effectively, ensuring that more of the loan amount goes towards actual educational expenses.
This is a definite pro. The lower the fees, the more affordable the loan is over time.
Ranking 10/10 because less fees are always a plus!
Can I pay the loan off early?
There is no penalty for paying off your loan early. There are also several repayment options.
First, you can start paying on your loan immediately. This gives you a head start on becoming debt-free and results in the lowest-cost loan.
Second, while you are still in school, you can make low, flat payments (as low as $25 per month) or interest-only payments. Again, this gives you a head start and helps build credit.
If you choose to make interest-only or partial interest payments while still in school but have trouble, the In-School Default Protection automatically switches you to a deferred payment plan.
Third, you can wait until you graduate to start making payments. Keep in mind that your interest is accumulating while you are not making payments, so the cost of your loan will rise during this period.
Once you leave school, there is a 6 months grace period before you start making loan payments. If this is not long enough, talk to Abe and they can approve another 6 month extension.
Keep in mind that interest will accumulate no matter what option you choose so beginning payments as soon as possible will save money and build credit. On the other hand, not having to worry about payments until after graduation allows students to focus on their studies without immediate financial burden.
Ranking 10/10 because of multiple repayment options.
While not required, it is strongly encouraged that borrowers enroll in AutoPay. There are interest rate incentives.
Ranking 8/15 as Abe stresses auto-debit in their terms, while other lenders clearly offer multiple options. Note that we gave more weight to this category because it’s an important factor for borrowers when managing repayments.
Abe starts with a standard 6-month grace period before loan repayments are required, but this can be extended another 6 months.
Ranking is 10/10 for the extension period.
Are there payment deferment options?
Private loans typically offer fewer deferment options compared to federal loans, making them less flexible if financial difficulties arise. Private loans also lack federal protections, such as forgiveness programs and extensive deferment options, which can be crucial for some borrowers.
Abe has a few more options than other lenders.
12 months of medical forbearance is available if you end up out of work due to an illness or go on unpaid FMLA leave.
12 months of hardship forbearance is available if you lose your job or suffer a major loss from a natural disaster.
A reduced payment program is available on a case-by-case basis. If you are still having difficulties, you may qualify for a term extension on your loan of up to 60 months or 5 years. This results in lower monthly payments.
Should you decide to re-enroll in school or continue to a medical internship or residency, your payments can be deferred.
Ranking 10 out of 10 due to several payment options and several situations where a deferment may be granted. As always, read the fine print and ask tons of questions before deciding on a loan.
Do I need a parent to cosign the loan?
While some students can qualify for student loans themselves, they likely will need a cosigner to qualify for a larger loan. This person is generally a parent, relative, or any responsible adult with established good credit.
The cosigner must meet the same eligibility requirements as an independent borrower.
Abe offers a consigner release option after 12 months of on-time principal and interest payments. Your cosigner can help you get the loan and the student can take over the loan after 12 months.
We consider this a pro as it offers the cosigner an opportunity to release themselves from the loan if they choose.
Ranking 15 out of 15 due to the consigner release option after 12 months. Note that we gave more weight to this factor and 12 months is the lowest time period among all the lenders we looked at.
The better the credit rating of the borrowers or their cosigners will determine interest rates and loan amounts. Good to excellent credit will qualify for the best rates. Establishing a strong credit history or finding a qualified cosigner with excellent credit is essential to accessing competitive loan terms.
This can be a con based on your credit history, but personal circumstances do not affect our ranking.
Ranking 15/15 as the minimum FICO score required for the loan is 650. Note that we gave this more weight in the rankings as the ability to obtain the loan at a lower interest rate is very important to most borrowers.
What is the application process?
Before you start the application process, gather personal information, school name, grade level, expected graduation date, loan amount desired, and income information.
The time it takes for a loan approval is not listed on the website. To see if an Abe loan is right for you, start by plugging your information into the provided calculator.
Like most lenders, a Soft Pull of your credit report will be required in the pre-qualification stage. These types of inquiries will not negatively affect your credit. If you decide to continue with the process, more details will be required.
Once approved, Abe will work with you on repayment options, and disbursing the funds to your school of choice.
If you have questions about the process, call or email a Student Loan Specialist.
Ranking 10/10 based on a “soft pull” of the credit report, which is not reported to the credit-reporting agencies.
How competitive are the rates?
Abe rates include an auto-pay discount (0.25%), which means that you must set up direct payment from your bank account. Automatic payments are not required to obtain the loan, but can save you money.
In addition, there is another possible 0.25% interest rate reduction after you’ve made on-time principal and interest payments.
There are fixed and variable rates that are competitive with other lenders.
At the time of this article, rates on the website show:
Fixed Rate Loans range from 3.69% – 15.00% APR
Variable Rate Loans ranging from 5.13% – 16.36% APR
If you can lock in a fixed-rate loan with an excellent credit score, your loan will be significantly lower than starting with a variable rate and seeing it rise to the upper percentage rates. However; variable rates can be advantageous at times.
The term of your loan can also impact the cost and monthly payment amount. Abe offers 5, 7, 10, 15, or 20-year loans. The choice of term depends on the loan amount and repayment options.
Ranking 10/10 based on the option of both variable and fixed rate loans. We encourage you to shop around for the best rates.
Are there other resources available?
Abe’s loan configurator allows you to explore different loan options, including fixed or variable rates, repayment options, and the length of the loan. You can get a picture of how much your loan will cost over its lifetime.
The Student Loan Guide sent to your inbox explains the private lending space in simple terms.
Be sure to explore the Frequently Asked Questions for more details (and read all the footnotes as they contain valuable information).
Ranking 10/10 due to Special Product Features in addition to just the loan.
What else should you consider?
We investigated the rating provided by the Better Business Bureau (BBB), which gives consumers confidence in a business’s reliability and trustworthiness. The rating is based on factors like customer complaints, transparency, and adherence to BBB standards. A higher BBB rating indicates that a business resolves customer issues effectively and operates ethically. It serves as a measure of transparency and accountability, showing how well a business treats its customers and handles disputes.
Abe received an A- rating, which ranked 8 out of 10 on our scale.
Ranking 8/10 based on feedback from borrowers and an overall ranking of A-. We encourage you to look up any lender we review on their website at www.bbb.org.
We also looked at other reviews for our private student loans. If the loan was reviewed on major financial sites, we considered this a plus to the visibility of the loan. While this is a small factor in whether to consider a loan, we do recommend careful research when comparing this loan to others.
Ranking 5/10 solely based on a lack of review from NerdWallet.
Does Abe offer other loans?
We focused on undergraduate private student loans in our analysis, but Abe also offers graduate student loans for doctoral, law, medical, dental, nursing, public health, accounting, and architecture.
If there is a graduate certificate in your required field that will allow you to gain specialized skills, talk to Abe about a loan.
For students enrolled in a few classes or less than part-time, Abe can assist there as well.
Summary
Here’s a summary of the pros and cons of a private student loan with Abe:
Pros:
- Competitive Interest Rates
- Loans for less than Half-Time Enrollment
- No Fees
- Flexible Repayment Terms
- A- Rating by the BBB
- Numerous Deferment Options
- Up to 12 Month Grace Period for Repayment
- 12-month Cosigner Release Option
Cons:
- Unknown Approval Times
- No Income-Driven Repayment Plans
- Interest Accrual During In-School Deferment Periods
- Lack of Federal Protection
- No Parent-Only Loans
- No Nerdwallet Review
Overall Ranking
Based on our set of criteria, we rank Abe at 5 out of 5.
Next Steps
Navigating private student loans can be complex, as we’ve explored in this review. We strongly recommend evaluating multiple options thoroughly before reaching a decision. Visit lender websites, talk with their representatives, and prioritize key features based on your needs.
Your choice of loan will be influenced by various factors, each carrying different levels of importance to your specific situation. Taking these steps ensures you’re well-informed and positioned to select the loan that best fits your financial and educational goals.
To learn more about additional private student loans, explore our other reviews and resources.
Click here to Apply to Abe Private Student Loans
About the Author
Kim Burton is a versatile content and technical writer residing in the scenic mountains of Colorado. A lifelong learner, Kim enjoys crafting insightful articles on finance, technology, marketing, nutrition, real estate, and self-care. She holds a bachelor’s degree in Marketing and is a certified nutrition coach. As a mother preparing her child for college, Kim has conducted thorough research into the student loan process, equipping herself with a wealth of knowledge to navigate this complex financial landscape. When she’s not writing, Kim enjoys hiking, creating, gardening, and hanging out with her family.
