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If you've already used your savings, federal student loans, and student aid to pay for college and still find that you're short on cash, a private student loan could be a good option.
Best Private Student Loan Companies of 2024
The best student loans available are federal student loans. But if you need to turn to a private lender, here are a few of the best places to begin your search.
- SoFi Undergraduate Student Loans
- Sallie Mae Undergraduate Student Loans
- Ascent Undergraduate Student Loans
- Earnest Undergraduate Student Loans
- College Ave Undergraduate Student Loans
- Custom Choice Undergraduate Student Loans
- MPower Financing Undergraduate Student Loan
Top Private Student Loan Company Comparison
The best private student loans have competitive interest rates, a variety of repayment terms, and no origination fees. Our list of the best options includes picks for both undergraduate and graduate students.
SoFi Undergraduate Student Loans
SoFi private student loans are best for graduate students. SoFi is one of the few lenders offering lower interest rates for graduate school loans than undergraduate loans.
While SoFi's interest rates are competitive with others on the list, what makes SoFi unique are its other features. This lender offers some good protections for student loan borrowers, like career services. Additionally, SoFi's student loans have no fees, including no late fees (though it's worth noting that interest will still accrue).
Watch out for: High maximum loan amount. SoFi's minimum loan amount is $1,000 — if you need a small student loan, it might be worth turning to a lender that makes smaller loans.
Regular Annual Percentage Rate (APR): 5.74% - 15.86% variable and 4.19% - 14.83% fixed (with AutoPay discount)
Fees: N/A
Loan Amount Range: Minimum of $1,000
Ascent Undergraduate Student Loans
Ascent private student loans are a flexible option for almost any student loan borrowers. Interest rates are competitive, and terms range from five to 15 years.
Cosigners are allowed and encouraged. A relatively unique feature is Ascent's cosigner release. Make 12 consecutive on-time payments, and Ascent can release a cosigner from your student loan.
What to watch out for: Ascent isn't a great option if you want to repay your student loans while you're still in school, as this lender doesn't offer a repayment plan with full payments while borrowers are still enrolled. But there's no prepayment penalty on loans if you want to make partial payments in school. It's also worth noting that Ascent limits borrowers' total loans to $400,000, including any other federal or private student loans outside of Ascent.
Regular Annual Percentage Rate (APR): 5.99% - 15.85% variable and 3.79% - 15.41% fixed (with AutoPay discount, varies by plan)
Fees: N/A
Loan Amount Range: $2,001 - $200,000 ($200,000 aggregate total)
Earnest Undergraduate Student Loans
Earnest's private student loans offer low starting interest rates and very flexible repayment terms. Earnest has four options for repayment, including a nine-month deferral after school. Earnest doesn't charge any fees, including prepayment or origination fees on private student loans, which makes it a strong option.
Earnest also advertises the ability to skip a payment once per year. But that doesn't mean that you're off the hook for that payment, since interest will still add up and your payoff will be delayed. Your payments could be higher if you take full advantage of these features, and they could increase your total payoff time and loan amount.
But if used the right way, Earnest's private student loans could still beat the competition with such low starting interest rates.
What to watch out for: Some of Earnest's flexible features aren't the right fit for everyone. The ability to delay loans for nine months may not be as great as it sounds, since interest still accrues during this period, growing your loan's balance.
Regular Annual Percentage Rate (APR): 5.62% - 16.85% variable and 4.29% - 16.49% fixed (with AutoPay discount)
Fees: $0
Loan Amount Range: $1,000 - 100% of education cost
College Ave Undergraduate Student Loans
College Ave ties has one of the lowest starting interest rates on private student loans, since undergraduate fixed-rate loans start with an interest rate of 4.22%. Interest rates for grad school students are also competitive with SoFi's lower interest rates for this group.
It's a good choice for both graduate and undergraduate students, and it offers four options for repayment. College Ave allows cosigners for loans and offers parent loans in addition to undergraduate and graduate loans, starting at the same interest rate as the undergraduate interest rate.
What to watch out for: Late payment penalty. You'll fork over a late payment of 5% of the amount due, capped at $25 if you fall behind on your payments.
Regular Annual Percentage Rate (APR): 5.59% - 17.99% variable and 4.22% - 17.99% fixed (with AutoPay discount)
Fees: late payment of 5% of the amount due, capped at $25
Loan Amount Range: Minimum of $1,000
College Ave Student Loans Review
Sallie Mae Undergraduate Student Loans
Sallie Mae doesn't charge any origination and prepayment fees, and you also get four months of the study service Chegg for free. Chegg offers expert Q&A, and students can submit up to 20 questions per month.
What to watch out for: Sallie Mae sets your repayment term length, so if you want to choose your term length another lender is a better option.
Regular Annual Percentage Rate (APR): 5.37% - 15.70% variable and 4.15% - 15.49% fixed
Fees: late payment of 5% of the amount due, capped at $25
Loan Amount Range: Starts at $1,000
Sallie Mae Student Loans Review
Custom Choice Undergraduate Student Loans
Custom Choice offers loans of up to $99,999 annually that come without fees, and you can check your rates within a few minutes.
Custom Choice also offers a 2% reduction on your loan principal after you provide the lender with proof of graduation, as well as a .25% interest rate reduction when you sign up for AutoPay.
What to watch out for: No mobile app. If you want to manage your loans on the go, you won't be able to with Custom Choice.
Regular Annual Percentage Rate (APR): 5.39% - 15.57% variable and 4.43% - 14.04% fixed
Fees: N/A
Loan Amount Range: $1,000 - $99,999
Custom Choice Student Loans Review
MPower Financing Undergraduate Student Loan
MPower Financing offers fixed loans designed for international students. You can get a loan without a cosigner, collateral, or US credit history. Most other lenders that offer loans to international students require a US citizen or permanent resident to cosign on the loan.
What to watch out for: High interest rates. While the lender's starting interest rates are higher than many of the other lenders on this list, we included it because of its accessibility for international students.
Regular Annual Percentage Rate (APR): 13.74% to 14.75% fixed (with AutoPay discount)
Fees: 5% origination fee and undisclosed late fee
Loan Amount Range: $2,001 — $100,000 lifetime
MPower Financing Student Loans Review
Which Private Student Loan Lender Is the Most Trustworthy?
We've only selected private student loan lenders with no public controversies in the last three years. We've also compared each institution's Better Business Bureau score.
The BBB, a non-profit organization focused on consumer protection and trust, evaluates companies by judging a business's responses to consumer complaints, honesty in advertising, and clarity about business practices. Here is each company's score:
| Lender | BBB grade |
| SoFi Student Loans | A+ |
Ascent Student Loans | A- |
Earnest Student Loans | A |
College Ave Student Loans | A+ |
Sallie Mae Student Loans | A+ |
Custom Choice Student Loans | N/A |
MPower Financing Student Loans | NR |
Of our top picks, only Custom Choice and MPower are not currently rated an A- or higher by the BBB. Custom Choice isn't rated by the BBB at all, and the BBB doesn't have sufficient information to rate MPower Financing. That said, this doesn't necessarily reflect Custom Choice or MPower's trustworthiness, and you should ask others about their experiences with the businesses before deciding against borrowing from the companies.
FAQs
Whether or not it's a good idea to take out a private student loan depends on your unique financial situation. You may consider alternatives such as a less expensive school, scholarships, or a side job to earn more money. Whatever your decision is, make sure you understand the terms of your loan before making a choice.
Interest will probably still accrue while you're in school, so it may be beneficial to make your payments and even perhaps put some money toward the principal each month if you can. When your loan goes into repayment, any unpaid interest will capitalize. This means it will become part of the principal balance of your loan. Interest is then determined using this new, higher loan balance.
Yes, interest will accrue during the grace period, similarly to how it does while you are in school. Some private lenders may have suspended this practice during the pandemic, but they are under no obligation to do so.
You can have from 10 to 30 years to pay off student loans, depending on your repayment plan. You may want an extended length to spread your costs out, but be aware that you'll pay more in overall interest this way.
Why You Should Trust Us: Our Experts for the Best Private Student Loans
We consulted loan and financial experts to give their insights into finding the best low-interest student loans for your needs.
- Sean August, CEO at The August Wealth Management Group
- Ryan Wangman, former loans reporter at Personal Finance Insider
Methodology: How We Picked the Best Private Student Loans
We rate all student loan products in our reviews and guides on a 1-5 scale. The overall rating is a weighted average that takes into account seven different categories, some of which are judged more heavily than others. They are:
- Interest rate (20% of rating)
- Fees (20% of rating)
- Term lengths (15% of rating)
- Repayment options while in school (15% of rating)
- Borrower accessibility (15% of rating)
- Customer support (7.5% of rating)
- Ethics (7.5% of rating)
Each category's weighting is determined based on its importance to your borrowing experience. Rates and fees have the most significant impact on the total cost of your loan, so we weigh those the most heavily. Customer support and ethics are still crucial parts of the borrowing experience, but do not directly tie to a student loan's terms, so they have less of an impact on the overall rating.
Read more about how we rate student loans >>
Our Experts' Advice on Choosing the Best Private Student Loan
How should I determine how much to borrow through a student loan?
Sean August:
"The loan amount should be high enough to cover your education expenses, but not so high that you borrow more than you can afford to repay."
Ryan Wangman:
"Look at the total cost of your education, and subtract any 'gift aid' you'll receive, like scholarships or grants. Then, consider how much of the remaining money you'll need to take out in loans to afford the cost of school."
How do the best private student loan rates compare with other loan rates?
Sean August:
"The best private student loans should have lower interest rates compared to credit cards and personal loans. Competitive interest rates will ensure that you don't pay more than you need to over the life of your loan."
Ryan Wangman:
"The best private student loans will have rates in the single digits, especially for borrowers with great credit. Rates on student loans are usually lower than the rates on credit cards or personal loans."
