Young woman researching the best private student loans online.

Best Private Student Loans [2024] Avoid Common Mistakes

Some of the links in this post are from our sponsors, and we might earn a commission if you click on one.

Do you need to borrow money to pay for school? You’re hardly alone. In fact, the average student at a public university borrows over $25,000 to complete their bachelor’s degree. 

As you navigate the student loan process, your first step should be to apply for federal loans. They’re easier to get, and the terms are often more favorable.

But if you need additional help, consider private student loans. 

Below, I’ll review some of the best private student loans available. I’ll also tell you which mistakes to avoid. 

That way, you can get the best possible terms on your private student loan!

Best Private Student Loans

There are a few factors to consider when choosing between private student loans:

  • Interest rates. This determines how much you’ll pay for the right to borrow. And make sure you know the difference between fixed rates (which stay the same) and variable rates (which can change as you’re repaying the loan). 
  • Available loan amounts. Know how much money you’ll need – and then look for a lender willing to provide it.
  • Available term lengths. Decide if you can save money by paying off the loan faster or if you’ll need more time to repay the loan. Then, look for a loan that matches your needs.
  • Minimum credit score. Creditworthiness is a big factor in qualifying for the best private student loans. That’s why you might want to consider using a cosigner.
  • Eligibility requirements. With some lenders, you need to be at least a half-time student. There are also requirements related to your status as a U.S. resident.

Now that you know what to look for, you’re ready to read about the best private student loans available today!

1 – Sallie Mae

Best For: Part-time students

Fixed APR:  4.50% – 15.49% (for undergraduate loans)

Variable APR: 6.12% – 16.45%

Loan Amounts: $1,000 – The full cost of your education (minus financial aid)

Available Term Lengths: 10-20 years

Minimum Credit Score Required: 650

Eligibility Requirements: Must be attending a qualifying institution full time, half-time, or less than half-time; must be seeking professional certification or enrolled in continuing education or a technical/trade school program; must be a U.S. citizen or permanent resident; non-U.S. citizen borrowers must apply with a creditworthy cosigner that is a U.S. citizen or permanent resident.

Sallie Mae used to be a government program, but now it’s a private company that offers some of the best private student loans. 

Sallie Mae has relatively few eligibility requirements, making it a great option for half-time and less than half-time students who might not qualify with other lenders. 

Pros

  • Loans can cover all of your education costs, including laptops, books, and even travel expenses.  
  • Full-time, half-time, and less than half-time are eligible.
  • The Smart Option Student Loan is available to undergraduate and career training students, and there are also loans for graduate and post graduate students.

Cons

  • Sallie Mae doesn’t refinance student loans.
  • There’s no prequalification process to check your potential terms prior to applying.

2 – Ascent

Best For: High-achieving students who don’t have a cosigner

Fixed APR: 4.48% – 15.38%

Variable APR: 5.94% – 15.83%

Loan Amounts: $2,001 – $400,000

Available Term Lengths: 5 – 20 years

Minimum Credit Score Required: None

Eligibility Requirements: Must be enrolled full-time or half-time; must be a U.S. citizen, permanent resident, or have DACA status; cosigners must be U.S. citizens or permanent residents

Ascent offers three different types of student loans:

  1. Cosigned credit-based loans
  2. Non-cosigned credit-based loans
  3. Non-cosigned “outcomes-based” loans – available to full-time juniors and seniors with a GPA of 3.00 or higher. 

It’s the outcomes-based loans that make Ascent so unique. Are you an upperclassman with no cosigner but decent grades? Then these are probably the best private student loans available to you. 

So congratulations! Your hard work in school is already paying off.

Pros

  • Juniors and seniors qualify for “outcomes-based” loans with a 3.00 GPA and above.
  • Using the automatic repayment option will give you an interest rate decrease of 1.00% (for outcomes-based loans) or 0.25% (for credit-based loans).
  • You can request forbearance or deferment.

Cons

  • Outcomes-based loans aren’t available to international students.
  • International students must have a U.S. citizen or permanent resident cosigner.
  • Students must be enrolled at least half-time. 

3 – College Ave

Best For: Students whose cosigner has good or excellent credit

Fixed APR: 4.42% – 15.99%

Variable APR: 5.29% – 15.99%

Loan Amounts: $1,000 – The full cost of your education (minus financial aid)

Available Term Lengths: 5-20 years

Minimum Credit Score Required: 650

Eligibility Requirements: Must be a U.S. citizen, a U.S. resident, or have a U.S. social security number; must be enrolled at an accredited institution

A table comparing the best private student loans to federal student loans.
It’s important to fully understand the differences between federal and the best private student loans before signing an agreement. 
Source: College Ave

With a 4.6-star rating on Trustpilot, College Ave is definitely one of the most popular lenders offering student loans. 

Applying for a College Ave student loan online takes only 3 minutes, and you’ll get a decision immediately. How’s that for incredible service? It’s no wonder College Ave has a reputation for offering some of the best private student loans. 

Pros

  • You’ll get an immediate decision after applying online. 
  • Flexible loan terms – allowing you to save money by getting a 5-year loan.
  • Excellent customer reviews.

Cons

  • Forbearance is only granted in increments of 3 – 6 months.
  • You get a maximum of 12 months of forbearance total.
  • Cosigners must have a credit score in the mid-600s or higher. 

4 – Earnest

Best For: Applying with a cosigner

Fixed APR: 5.32% – 16.20%

Variable APR: 4.43% – 15.90%

Loan Amounts: $1,000 – $138,500 per year

Available Term Lengths: 5-15 years

Minimum Credit Score Required: 650

Eligibility Requirements: Must be a U.S. citizen or have non-conditional, 10-year permanent residency; undergraduates must be enrolled at least half-time; must be pursuing a degree at a Title IV-qualified non-profit 4-year institution

Flexibility and convenience – that’s what places Earnest on this list of the best private student loans. You can check your eligibility in just 2 minutes. And then, there are four repayment options, meaning you can find the terms that fit your financial profile. 

And while Earnest doesn’t require a cosigner, you should definitely get one if you can. That’s because having a cosigner makes it five times more likely that your application will be accepted. 

Part of looking for the best private student loans is finding lenders like Earnest who offer rate match guarantees.
Earnest offers a rate match guarantee, which gives students a $100 gift card once their rate match is finalized. 
Source: Earnest

Pros

  • You won’t have to make payments during a 9-month grace period that starts after you get out of school.
  • Using autopay is super convenient – and it gives you a 0.25% interest rate reduction.
  • Your chances of getting improved are five times greater with a cosigner.

Cons

  • Cosigners must earn at least $35,000 per year.
  • Cosigners must have 3+ years of good credit history.
  • Loans are unavailable in Nevada.

5 – Credible

Best For: Assessing multiple options

Fixed APR: 5.13% – 16.45%

Variable APR: 4.42% – 15.99%

Loan Amounts: Varies by lender

Available Term Lengths: 5 – 20 years

Minimum Credit Score Required: 670

Eligibility Requirements: Must be a U.S. citizen or permanent resident; must be enrolled in a qualifying institution

Credible is an online tool that helps you choose between the best private student loans available.

Start by taking Credible’s 3-minute questionnaire. From there, you’ll see a list of potential loans that you’re likely to qualify for. This is an awesome strategy because it really lets you weigh your options. 

Pros

  • You can use the platform to compare multiple lenders.
  • Checking which loans you qualify for won’t affect your credit score.
  • Credible guarantees the best possible rate – and will give you $200 if you go on to find a better rate somewhere else. 

Cons

  • Not all student loan providers are represented on the network.
  • You can’t access loan options without creating an account.

Mistakes When Choosing a Student Loan

The student loan process might be complicated, but you can avoid some of the most costly mistakes if you know about them ahead of time.

So here are five of the biggest mistakes to avoid when you’re choosing a student loan:

  • Not calculating exactly how much you’ll have to pay each month. You’ll have to base life decisions on this number, so make sure you know what it is!
  • Choosing the wrong repayment term. If the repayment term is too short, you might not be able to afford your payments. If it’s too long, you’ll pay more in interest.
  • Not checking interest rates. If you’re not used to borrowing money, all those decimal points, percentage signs, and acronyms can seem overwhelming. But remember, the interest rate is what determines the total cost of your loan!
  • Blindly choosing a variable-rate loan. The variable rate might start out as the cheapest option, but it could increase in the future. That doesn’t mean a variable-rate loan is never a good idea – but make sure you go into it understanding the risk.
  • Borrowing more money than you need. Repaying a loan is hard. Don’t make it even harder by borrowing too much!

Best Private Student Loan Reddit

On Reddit, someone recently started a thread asking about the best private student loans.

A person on Reddit asking others about the best private student loan options available.
Someone on Reddit asks for the “best private student loan options.” 
Source: Reddit

In the responses, a few people stressed the importance of shopping around. One person also mentioned that the loan terms will depend on two factors: your credit score and your cosigners. 

A person on Reddit sharing their opinion on the best private student loans and how to choose one.
On Reddit, a user suggests looking for the best deals on private student loans. 
Source: Reddit

Another Redditor pointed out the importance of maximizing your federal loan options before looking for a private loan. This is fantastic advice because even the best private student loans usually have higher interest rates than federal student loans.

Commonly Asked Questions About The Best Private Student Loans

Best Banks for Student Loans?

Here are some of the best banks and private lenders for student loans:

You could also search for private loans on Credible, which is an online tool that draws on a network of private lenders. 

Best Student Loans?

The best student loans are the federal loans you get by filling out a FAFSA form. They generally have lower interest rates, and they’re needs-based – meaning your credit history won’t affect your chances of approval. If you can’t access federal loans, you could use a private lender like Sallie Mae or Ascent

Is Sallie Mae a Good Private Lender?

Sallie Mae is a reputable lender with decades of experience. The interest rates are competitive, and even part-time students can get a loan. A federal loan would still be better, but if you need a private student loan, Sallie Mae is a solid choice. 

Is It Hard to Qualify for Private Student Loans?

Qualifying for a private student loan can be tough, especially if you don’t have a cosigner. Many students don’t have the income or credit history to qualify. That’s why a cosigner is often the key. With the lender Earnest, for example, having a cosigner makes approval five times more likely! 

Is It Better to Take a Student Loan From a Private Bank? 

It’s usually better to take out a federal loan if you can get one. Federal loans have lower interest rates – plus, they offer deferment options and sometimes even loan forgiveness. With higher interest rates and tougher requirements, loans from private banks are more of a “Plan B.” 

Are Private School Loans Worth It?

Private student loans can absolutely be worth it, especially if you’ve exhausted other options like scholarships, grants, and federal student loans. Just make sure you look carefully at the interest rates and loan terms. You don’t want to overburden yourself with debt.

Private Student Loans That Go Directly to You?

With most of the best private student loans, the money is sent to the school, not to you as the student. That’s how it works with these popular private lenders: