Currently, nearly 45 million Americans have some amount of student loan debt. And as the costs of attending college continue to climb, that number is only likely to grow larger. 

If you’re one of these student borrowers, or plan to take out loans soon, don’t be daunted by these figures. Student loans can be a prudent investment in your future, empowering you to further your education and embark on a successful career. However, as with any other major financial decision, it’s important to make informed choices about your educational debt.

In that spirit, you’ll need to carefully evaluate the wide range of institutions that are eager to offer you student loans. There are significant distinctions between student loan providers, and choosing the right lender can be greatly advantageous to your financial prospects.

In this article, we’ll help you get acquainted with the nation’s most prominent student loan providers. We’ll devote the first section of this guide entirely to federal student loans, the most common borrowing route and the option you should consider before private lenders. From there, we’ll introduce you to many of the best private student loan providers, helping you weigh their potential advantages and drawbacks.

Federal Student Loans

With federal student loans, the U.S. government lends money directly to students to finance the costs of their postsecondary studies. Specifically, the Department of Education operates the William D. Ford Federal Direct Loan Program, which encompasses four distinct loan categories. 

• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct PLUS Loans
• Direct Consolidation Loans

These programs are differentiated by several key characteristics, and they cater to distinct categories of borrowers. To break down these key differences, we’ve created the table below:

Types of Federal Student Loans
Name	Description	Who’s Eligible?	Interest Rates(Fixed)	Total Borrowing Limits
Direct Subsidized Loans	These loans are made to students with demonstrated financial need. The Department of Education covers the interest on your loan while you’re enrolled, during your grace period, and during periods of deferment.	Undergraduate students	4.53%	Borrowing limits for subsidized and unsubsidized direct loans are calculated together: Dependent undergraduates may borrow up to $31,000, including no more than $23,000 in subsidized loans Independent undergraduates may borrow up to $57,500, including no more than $23,000 in subsidized loans. Graduate or professional students many borrow up to $138,500, including what they borrowed previously as undergraduates. No more than $65,500 of this total amount may be in subsidized loans.
Direct Unsubsidized Loans	Students do not need to demonstrate financial aid to be eligible for these loans. Borrowers are accountable for paying all interest that accrues over the life of the loan.	Undergraduate, graduate and professional students.	4.53% for undergraduates  6.08% for graduate or professional students.
Direct PLUS Loans	These loans can be made to either parents of undergraduate students or students enrolled in graduate or professional schools. Borrowers must undergo a credit check and those with a poor credit history must meet additional requirements.	Graduate and professional students and parents of dependent undergraduate students.	7.08%	The cost of attendance (as determined by the school) minus any other financial assistance the student receives.

To apply for federal student loans, you’ll need to complete the Free Application for Federal Student Aid (FAFSA®) and submit your results to the schools to which you’re applying. These schools then review your results, and (if you are admitted) determine the type and amount of student loans they are willing to offer you as part of your personal financial aid package. 

Relative to private student loans, federal student loans provide an array of distinct advantages. Because the government is your lender, you’ll enjoy options no private company can offer. The unique benefits of federal student loans include:

• No payments due until after you leave school
• Flexible repayment options, including options to tie payments to your income
• Postponement benefits allowing you to temporarily lower or delay your loan payments in times of financial hardship
• Loan forgiveness programs for certain people in public service

While federal loans entail these government-backed benefits, you won’t be working directly with the Department of Education as you repay your loan. Instead, you’ll be handed off to a loan servicer, a private company that handles all tasks pertaining to your repayment. 

Though you don’t pay anything extra for your servicer’s work, you don’t get to choose your servicer, and your debt can be transferred to another servicer at any time. Some of the leading loan servicers include Nelnet, Navient and MOHELA.  

Unfortunately, many borrowers report negative or confusing experiences with their loan servicers, and dealing with them can require both patience and persistence. Given the advantages of federal student loans, however, putting up with a lackluster servicer may just be a necessary evil.

The Best Private Student Loan Providers

Because of their singular protections and advantages, federal loans are the first option you should consider when borrowing to pay for college. But many students find that they need more than federal loans and other forms of financial aid to make ends meet while they’re in school. Private student loan providers can help fill that gap. 

Moreover, some borrowers appreciate elements of the private borrowing process. For example, private lenders can provide more flexible borrowing options, including fixed and variable interest rates. Moreover, credit-worthy borrowers can sometimes get better interest rates from a private provider compared to what the government would offer. 

For those already out of school, most private student loan providers also offer refinancing options. Refinancing loans replace your existing student debts with a single loan — typically with a lower interest rate. This process can simplify your life as a borrower and save you a considerable amount of money. However, when you refinance with a private lender, you’ll be giving up the advantages and protections that federal loans provide. 

Below, we’ll introduce you to some of the best private student loan providers out there, presenting their pros and cons in unbiased terms. In each case, we’ll include relevant details pertaining to their student loans for undergraduates, though many offer graduate, parent, and refinancing loans as well. 

Sallie Mae

Let’s clear up the confusion: Though Sallie Mae was once a government-backed entity, it is now a private student loan lender. You won’t get any of the perks associated with federal loans, but the company does offer some of its own unique advantages.

First and foremost, Sallie Mae will lend to students attending school on a part time basis, whereas most lenders require you to be enrolled at least half-time. Additionally, the company offers a benefit called a “Graduated Repayment Period,” allowing you to make interest-only payments for up to 12 months after you leave school. If you think your transition into working might take a while, this option can be a huge relief. The company also throws in a few free months of tutoring service Chegg Study. 

Interest, Payment and Fees:

• Structures Available: Fixed and Variable
• Range of APRs: 
  • Variable Rates: 2.87% – 10.33% 
  • Fixed Rates: 4.74% – 11.35%
• Interest rate based on an underlying index? Yes, variable interest rates are based on either the Prime Rate index or London Interbank Offered Rate (LIBOR)
• Fees? No application or origination fees, though late fees may be assessed
• Prepayment Penalty? No
• Borrower Benefits: Automatic payment discounts and free membership to online tutoring service Chegg Study are available.
• Terms available: 5 to 15 year terms are available

Repayment Flexibility:

• Grace period: 6 months
• Deferment options: Deferment options available for members of the military and borrowers attending graduate school. 
• Forbearance provisions? Borrowers are allowed up to 12 months for forbearance in three-month periods over the life of the loan.
• Death or disability discharge? Yes.
• Repayment options: While in school, you can choose from a deferred repayment plan, a flat monthly repayment plan, an interest-only repayment plan or a principal and interest repayment plan. Once school and your grace period conclude, you must repay the principal and interest. However, you can apply for a “Graduated Repayment Period,” meaning you can make interest-only payments for 12 months after you leave school.
• Co-signer release available? Yes.
• Minimum loan amount: $1,000
• Maximum loan amount: Total cost of attendance

Customer Service: 

• Loan servicer: Sallie Mae
• Does lender have own customer service or does it outsource? Own customer service
• Application available online or by phone? Online or by phone
• Rate quote available with soft credit pull? No
• Related products: Graduate loans and parent loans are also available.

Eligibility:

• Enrollment requirement: Can be enrolled less than half-time, half-time or full-time
• Minimum FICO score: No minimum score. Applicants are rarely denied and are only denied due to bankruptcy or existing delinquent payments. Applicants with no credit score require a co-signer. 
• Minimum income: No minimum income requirement. 
• Available for international student borrowers? Only with cosigner who is a citizen or permanent resident.
• Available throughout the U.S.? Yes

Pros:

• One of the few lenders to work with students attending only part-time
• The Graduated Repayment Period is a unique and potentially handy benefit
• Free online tutoring is a perk some borrowers will appreciate

Cons:

• You can’t evaluate specific offers without a hard check on your credit score

Summary: 

An all-around solid contender, Sallie Mae is especially attractive for students attending school on a part-time basis or those who might need some time to transition into their careers after graduation. 

Citizens Bank

If you already use Citizens Bank services (such as a checking or savings account), you might want to consider borrowing from them as well. For their loyalty, current customers can get a .25 percent rate discount, which could translate to a nice pile of cash over the life of your loan. 

The company also makes it easy to get approved for multiple years. That means you won’t need to go back to them for more money on an annual basis, and your credit score won’t suffer from repeated hard inquiries. Unfortunately, Citizens does use an outside loan servicer, which could add a degree of complexity to your repayment experience. 

Interest, Payment and Fees:

• Structures Available: Fixed and Variable
• Range of APRs:  
  • Variable Rates: 2.90% – 11.01% 
  • Fixed Rates: 4.72% – 12.04%
• Interest rate based on an underlying index? The variable rate is based upon the one-month London Interbank Offered Rate (LIBOR).
• Fees? No application or origination fees, though late fees may be assessed
• Prepayment Penalty? No.
• Borrower Benefits: Loyalty discounts for existing Citizens Bank customers, autopay enrollment discount, and multi-year approval available. 
• Terms available: 5-year, 10-year, and 15-year terms available.

Repayment Flexibility:

• Grace period: 6 months (can be extended another 6 months upon request)
• Deferment options: Deferment options available for members of the military and borrowers attending graduate school
• Forbearance provisions? Borrowers are permitted up to 12 months forbearance. In two month intervals. 
• Death or disability discharge? Yes.
• Repayment options: While in school, you can choose from a deferred repayment plan, an interest-only repayment plan or a principal and interest repayment plan. Once school and your grace period conclude, you must repay the principal and interest.
• Co-signer release available? Yes.
• Minimum loan amount: $1,000
• Maximum loan amount: $150,000

Customer Service: 

• Loan servicer: Firstmark Services
• Does lender have own customer service or does it outsource? Own customer service.
• Application available online or by phone? Online or by phone
• Rate quote available with soft credit pull? No
• Related products: Graduate loans, parent loans, and refinancing loans are also available.

Eligibility:

• Enrollment requirement: At least half-time, as determined by school
• Minimum FICO score: 600
• Minimum income: 12,000 a year.
• Available for international student borrowers? Only with a cosigner who is a citizen or permanent resident.
• Available throughout the U.S.? Yes.

Pros:

• Great perks for existing customers
• Multi-year approval can spare your credit score

Cons:

• Some customers won’t like being placed in the hands of another loan servicer
• You can only review rates after a hard credit check 

Summary: 

If you’re already a customer of Citizens Bank and don’t mind dealing with an outside loan servicer, you could get a great rate.  

LendKey

Technically speaking, LendKey is a marketplace for borrowers and smaller lenders, such as community banks and credit unions. That means you get to give your business to smaller financial institutions (which could mean grabbing a better rate). However, LendKey handles the whole borrowing process, giving you the benefits of working with a larger lender.

In contrast to most competitors, the company does insist that borrowers make payments while in school, contributing at least something each month. Additionally, the company does provide guarantees about deferment options should you go to graduate school, which could raise concerns among some borrowers.

Interest, Payment and Fees

• Structures Available: Fixed and Variable
• Range of APRs: 
  • Fixed rates start at 5.36%
  • Variable rates start at 4.05%
• Interest rate based on an underlying index? Yes, variable interest rates are usually based on the London Interbank Offered Rate (LIBOR).
• Fees? No application or origination fees, though late fees may be assessed.
• Prepayment Penalty? No
• Borrower Benefits: Autopay discount, access to multiple small lenders.
• Terms available: Terms of 5, 10, and 15 years are available. 

Repayment Flexibility:

• Grace period: 6 months
• Deferment options: Offers minimal in school payment of $25 a month. Offers deferment to military veterans, specifics vary by applicant. 
• Forbearance provisions? Typically, borrowers can utilize up to 18 months of forbearance in six month intervals.
• Death or disability discharge? Yes, they offer death or disability discharge. 
• Repayment options: While in school, you can choose from flat rate repayment, interest repayment and principal and interest repayment plans. Once school and your grace period conclude, you must repay the principal and interest.
• Co-signer release available? Yes.
• Minimum loan amount: $5,000
• Maximum loan amount: $125,000

Customer Service: 

• Loan servicer: LendKey.
• Does lender have own customer service or does it outsource? Own customer service.
• Application available online or by phone? Online
• Rate quote available with soft credit pull? No
• Related products: Graduate loans and refinancing loans are also available from Lendkey.

Eligibility:

• Enrollment requirement: At least half-time, as determined by school
• Minimum income: $24,000. Must have at least 36 months of established credit history. 
• Average credit score of approved applicants: Mid-to-high 700s
• Average income of approved applicants: Approximately $87,00 per year
• Highest Debt-to-income ratio: Approximately 33% excluding housing costs.
• Available for international student borrowers? No
• Available throughout the U.S.? Yes

Pros:

• Eighteen months of forbearance is more generous than most lenders
• Working with smaller lenders can sometimes lead to better rates

Cons:

• You’ll have to pay something during the time you’re in school, whereas other lenders let you defer payment completely until you graduate.
• No clear guarantees that you can defer payments while in graduate school. 

Summary:

If working with small banks and credit unions appeals to you, then LendKey is a great option. Just make sure you’re onboard with making little payments each month while still in school.

SoFi

SoFi take a friendly, collaborative approach to lending. Borrowers get tons of support, such as career coaching, financial advice and networking opportunities. This could come in handy during tough times; if you’re let go, the company will help you look for a job, for example. 

SoFi is also gives you personalized rate offers without a hard credit check, meaning your credit score won’t take a hit (though they may do a hard check subsequently). Unfortunately, the company does use an outside loan servicer. Plus, you must be a citizen to work with SoFi for undergraduate loans.

Interest, Payment and Fees

• Structures Available: Fixed and Variable
• Range of APRs: 
  • Fixed: 5.05% to 11.71%. 
  • Variable: 3.19% – 10.79%
• Interest rate based on an underlying index? Yes, variable interest rates are usually based on the London Interbank Offered Rate (LIBOR).
• Fees? No application, origination or late fees.
• Prepayment Penalty? No
• Borrower Benefits: Autopay discount is available. SoFi also provides career coaching and community events for interested borrowers.
• Terms available: Terms of 5, 10, and 15 years are available. 

Repayment Flexibility:

• Grace period: 6 months, but only for deferred repayment plan.
• Deferment options: Deferment options are available to members of the military and graduate students.
• Forbearance provisions? Borrowers who lose their jobs are eligible for forbearance in three month increments and up to 12 months total over the life of the loan. During this time, borrowers must work with SoFi’s career advisors to identify employment options.
• Death or disability discharge? Yes.
• Repayment options: While in school, you can choose from deferred repayment, flat rate repayment, interest repayment and principal and interest repayment plans. Once school and your grace period conclude, you must repay the principal and interest.
• Co-signer release available? Yes.
• Minimum loan amount: $5,000
• Maximum loan amount: Total cost of attendance

Customer Service: 

• Loan servicer: MOHELA
• Does lender have own customer service or does it outsource? Own customer service.
• Application available online or by phone? Online
• Rate quote available with soft credit pull? Yes (but a hard pull may be necessary subsequently) 
• Related products: Graduate loans, parent loans and refinancing loans are also available through SoFi. 

Eligibility:

• Enrollment requirement: At least half-time, as determined by school
• Minimum FICO score: 700
• Minimum income: No minimum income requirement, but in order for a loan to be approved income must be more than the financial burdens of the borrower or the co-signer.
• Available for international student borrowers? Must be U.S. Citizen 
• Available throughout the U.S.? Yes

Pros:

• The rare lender that doesn’t demand a hard credit check to show you a real offer
• A wealth of support makes SoFi’s customer experience stand out. 

Cons:

• No options for international students
• SoFi uses MOHELA, an outside loan servicer. 

Summary: 

SoFi tries hard to support their customers, especially in tough times. That being said, they do hand off some tasks to an outside loan servicer, which could be a turn-off to some customers. 

Wells Fargo

Wells Fargo is another option for part-time students, with no requirement that borrowers be enrolled at least half-time. But even if you’re a full-time student, there are other good reasons to give this lender a look. If you already bank with Wells Fargo, for example, you can get a nice rate discount. The company has also eliminated late fees.

Unfortunately, the company offers just a single loan term of 15 years, which won’t appeal to some borrowers. Moreover, the company has a distinctive set of policies and terms related to forbearance, so it can be difficult to know which protections you’re entitled to. 

Interest, Payment and Fees:

• Structures Available: Fixed and Variable
• Range of APRs: 
  • Variable Rates: 4.33% – 10.30% 
  • Fixed Rates: 4.99% – 10.72%
• Interest rate based on an underlying index? Variable interest rates are based upon the Prime rate index.
• Fees? No application, origination or late fees.
• Prepayment Penalty? No
• Borrower Benefits: Autopay discounts and existing customer discounts are available. Borrowers can work with assigned advisors.
• Terms available: Fixed 15 year “collegiate” term for undergraduate students. Shorter terms are available for students completing medical residency or law school.

Repayment Flexibility:

• Grace period: 6 months
• Deferment options: While borrowers in school, the military or certain public service professions may be eligible to postpone payments for up to three years, these periods qualify as forbearance rather than deferment, and interest still accrues.
• Forbearance provisions? For borrowers affected by natural disasters or financial hardship, Wells Fargo offers multiple forbearance payment relief options. 
• Death or disability discharge? Yes
• Repayment options: While in school, you can choose from a deferred repayment plan, or a principal and interest repayment plan. You can also make payments at any time while you are in school. Once school and your grace period conclude, you must repay the principal and interest.
• Co-signer release available? Yes.
• Minimum loan amount: $1,000
• Maximum loan amount: Total cost of attendance or $120,000 (whichever is lower)

Customer Service: 

• Loan servicer: Wells Fargo
• Does lender have own customer service or does it outsource? Own customer service
• Application available online or by phone? Online or by phone
• Rate quote available with soft credit pull? No
• Related products: Graduate loans, parent loans and refinancing loans are also available through Wells Fargo.

Eligibility:

• Enrollment requirement: Can be enrolled less than half-time, half-time or full-time
• Minimum FICO score: No minimum
• Minimum income: No minimum
• Available for international student borrowers? Only with a cosigner who is a citizen or permanent resident.
• Available throughout the U.S.? Yes

Pros:

• One of the few lenders to work with students enrolled less than half-time.
• Solid discounts for existing Wells Fargo customers

Cons:

• Forbearance options can seem confusing
• Just one 15-year loan term is available

Summary: 

If you’re already a Wells Fargo customer or a part-time student, the benefits are clear. An assigned advisor adds a degree of customer service most lenders don’t offer.

SunTrust

Suntrust offers multiple undergraduate student loan options. But the company’s flagship offering, the Custom Choice Loan®, Suntrust provides a particularly intriguing medley of benefits. The company offers a two percent reduction in the principal of your loan as a reward for graduating, and an appealing discount for existing Suntrust Customers.

Some borrowers will also appreciate the company’s “alternative repayment plans” which allow borrowers to pay interest only during a period of time ranging from 12 to 24 months. There are some potential downsides to consider, such as Suntrust’s use of an outside loan servicer and the fact that the company doesn’t operate in all 50 states. 

Interest, Payment and Fees:

• Structures Available: Fixed and Variable
• Range of APRs:
  • Variable Rates: 3.16% – 10.175%
  • Fixed Rates: 4.301% – 11.05%
• Interest rate based on an underlying index? The variable rate is based upon the one-month London Interbank Offered Rate (LIBOR).
• Fees? No application or origination fees, though late fees may be assessed
• Prepayment Penalty? No
• Borrower Benefits: Autopay discounts and existing customer discounts are available. Borrowers can also receive a 2% principal reduction when they graduate.
• Terms available: 5-year, 7-year, and 15-year terms available.

Repayment Flexibility:

• Grace period: 6 months
• Deferment options: Deferment options available for members of the military and borrowers attending graduate school. 
• Forbearance provisions? Forbearance may be available to people undergoing financial hardship. Suntrust also offers “alternative repayment” options, such as agreements for the borrower to pay interest only for 12 to 24 months.
• Death or disability discharge? Yes.
• Repayment options: While in school, you can choose from a deferred repayment plan, a flat monthly repayment plan, an interest-only repayment plan or a principal and interest repayment plan. Once school and your grace period conclude, you must repay the principal and interest.
• Co-signer release available? Yes.
• Minimum loan amount: $1,001 (in most states)
• Maximum loan amount: $65,000 per year, $150,000 in total

Customer Service: 

• Loan servicer: American Education Services
• Does lender have own customer service or does it outsource? Own customer service.
• Application available online or by phone? Online or by phone.
• Rate quote available with soft credit pull? No.
• Related products: Graduate loans and other undergraduate loans are also available.

Eligibility:

• Enrollment requirement: At least half-time, as determined by school
• Minimum FICO score: 600 or higher
• Minimum income: Must have “positive income” in relation to loan, meaning they’d be able to make minimum payments.
• Available for international student borrowers? No (though other Suntrust undergraduate loans are available to international students).
• Available throughout the U.S.? No, loans are not available in IA and WI.

Pros:

• Wide variety of undergraduate loans available (in addition to the one reviewed above).
• A principal reduction when you graduate is a great incentive to finish school. 
• Discounts for existing Suntrust customers

Cons:

• Loans not available in Wisconsin or Iowa
• Suntrust relies on an outside loan servicer to manage their student loans.

Summary: 

If you’re already a Suntrust customer or value the flexibility of Suntrust’s multiple undergraduate loan options, this could be the lender for you.

CommonBond

CommonBond roots its businesses in admiral values: positive social impact, responsive customer service, and a flexible approach to repayment. When you borrow from the company, they help fund a child’s education in the developing world. You’ll benefit as well, with an assigned “Money Mentor” to help you make smart financial choices. If you even run into tough times, the company has solid deferment and forbearance options. You can also get real rate offers with just a soft credit inquiry, though a hard inquiry is usually necessary if you go through with the loan. 

There are a few details that aren’t quite as appealing: The company uses a loan servicer and requires all borrowers to obtain cosigners. Unfortunately, CommonBond does not lend to residents of Nevada or Mississippi or international students. 

Interest, Payment and Fees:

• Structures Available: Fixed and Variable
• Range of APRs:
  • Variable Rates: 3.13% – 9.29%
  • Fixed Rates: 5.45% – 9.74%
• Interest rate based on an underlying index? The variable rate is based upon the one-month London Interbank Offered Rate (LIBOR). 
• Fees? No application or origination fees, though late fees may be assessed
• Prepayment Penalty? No
• Borrower Benefits: Access to a personal “Money Mentor” is available to all borrowers. CommonBond also has a social purpose, using its profits to finance the education of children in the developing world.
• Terms available: 5-year, 10-year, and 15-year terms available.

Repayment Flexibility:

• Grace period: 6 months
• Deferment options: Deferment options available for members of the military and borrowers attending graduate school.
• Forbearance provisions? Commonbond offers multiple forms of forbearance protection for a maximum total of 24 months.
• Death or disability discharge? Yes
• Repayment options: While in school, you can choose from a deferred repayment plan, a flat monthly repayment plan, an interest-only repayment plan or a principal and interest repayment plan. Once school and your grace period conclude, you must repay the principal and interest.
• Co-signer release available? Yes
• Minimum loan amount: $2,000
• Maximum loan amount: Total cost of attendance

Customer Service: 

• Loan servicer: Firstmark Services
• Does lender have own customer service or does it outsource? Own customer service
• Application available online or by phone? Online
• Rate quote available with soft credit pull? Yes
• Related products: Graduate loans, refinancing loans and business loans are also available.

Eligibility:

• Enrollment requirement: At least half-time, as determined by school
• Minimum FICO score: 660
• Minimum income: No minimum
• Available for international student borrowers? No
• Available throughout the U.S.? No, loans are not available in MS or NV

Pros:

• See real offers with just a soft credit check
• Money Mentor services are a valuable inclusion at no additional cost
• CommonBond’s social mission sets this lender apart

Cons:

• All undergraduate borrowers must have a cosigner
• Loans aren’t available to international borrowers and residents of some states
• CommonBond uses an outside loan servicer

Summary:

CommonBond’s approach includes excellent customer support and a noble charitable purpose. Plus, seeing your offer won’t require a hard credit inquiry. If you’re already planning to have a cosigner, this lender is a great way to go.

Putting Lenders Through their Paces

We hope this guide helps you identify which student loan provider might be the perfect partner as you continue to fund your studies. Whether you’re already a pro at taking out loans or approaching the process for the first time, it’s helpful to be aware of each of these options.

At CollegeFinance.com, we specialize in helping students make smart decisions about paying for their college experience. Our expert advice can help you access significant savings and make all your money moves with added confidence.