College Ave Student Loans Logo

The Best Student Loan Companies

When your scholarships, grants, and federal student loans aren’t enough to cover the cost of college, it may be time to turn to a private lender.

Private student loans can help you bear the weight of tuition.

While private loans tend to be more expensive and less flexible than federal loans, they can be incredibly beneficial when you need more than your federal aid has to offer.

The key to finding the right student loan with the lowest rates and best terms is to shop around.

We’ve compiled a list of the top ten student loan companies to help get you started.

Our Top 10 Best Student Loan Companies

Here are our picks for the 10 best student loan providers:

  • College Ave
  • Sallie Mae
  • Credible
  • Discover
  • SoFi
  • Earnest
  • Commonbond
  • LendEDU
  • LendKey
  • PNC

1. College Ave

College Ave Student Loans LogoBest For: Flexible Payments

Private student loans tend to get a bad rap for their lack of flexibility when it comes to repayment, but College Ave is the exception.

College Ave prides itself on offering more accommodating repayment options than its competitors.

College Ave also stands out for being fee-free, as they don’t charge application fees or loan origination fees. They won’t penalize you for paying off your loan early, either.

The online-only lender offers loans to parents, graduate, and undergraduate students up to the full amount of the cost of attendance, and payments can be deferred until after graduation. You can also choose your term length for repayment and take advantage of interest-rate reduction if you enroll in automated payments.

College Ave’s cosigner release isn’t the quickest among the competition, but its other benefits make the company a worthwhile choice.

Learn More about College Ave

2. Sallie Mae

Sallie Mae Student Loans LogoBest For: Cosigner Release

Sallie Mae is the most seasoned student lender on our list, with years of stellar service under its belt.

Known for its top-notch cosigner release, Sallie Mae offers a lot of the benefits you’re looking for, with no fees, competitive interest rates, interest-rate reduction, and unexpected perks like free credit monitoring.

They also allow you to opt to pay interest-only payments during school or defer your payments until after graduation.

Sallie Mae loans can even be applied to private school tuition, non-degree seeking programs, and study fees for bar exams.

Just keep in mind that you may not be able to choose the length of your term for repaying your student loan. All in all, Sallie Mae is a great choice for your student loans, especially for cosigners.

Learn More about Sallie Mae

3. Credible

credible student loans logoBest For: Roundup of Rates

Credible isn’t a student loan provider. You read that sentence correctly. Instead of acting as a lender like most of the companies on the list, Credible is a massive marketplace for student loans.

When you apply on Credible’s website, you’re really applying to all of its partners. That way, rather than going through the application process repeatedly, you can get rates from as many as eight lenders in one spot.

Credible’s partners include College Ave, Sallie Mae, Discover and other top lenders featured on our list.

Applying through Credible is quick and convenient, saving you the time and energy required to shop and apply for multiple student loans, putting all of your best options in front of you with just a few clicks.

Learn More about Credible

4. Discover

Discover Student Loans LogoBest For: Rewards for Good Grades

You probably recognize Discover for its credit card offers but may be surprised to learn that the company is also a leading student loan provider.

The credit card giant offers student loans with competitive fixed and variable interest rates. Discover loans are also fee-free, even if you make a late payment, which is rare in the student loan industry. They also offer interest-rate discounts if you enroll in autopay.

Unfortunately, Discover’s terms are less flexible, with only 15 and 20-year terms. They also lack a cosigner release policy, meaning your cosigners will be on the hook for the whole life of the loan.

Even with those drawbacks, Discover is a solid choice, especially if you have a high GPA. Borrowers with a 3.0 or higher get a one-time cash award equal to one percent of the loan amount.

Learn More about Discover

5. SoFi

Best For: Quick Online Application

Sofi LogoSoFi has quickly become one of the largest companies for refinancing student loans. Unlike other companies on our list, Sofi doesn’t have any physical buildings. They are strictly online.

They make the whole process extremely simple. From the time you apply, it usually takes about 3 days until you’ll get funding. That’s much quicker than the industry standard.

Because they aren’t the traditional company with hundreds of branches, SoFi can offer lower rates without the fees piling on. They have rates as low as 2.99% with plenty of repayment lengths and options.

One of the most common praises of SoFi (aside from the ease and speed) is the different options. They have refinancing plans to fix just about any customer out there.

Another feature which makes SoFi stand out is their Unemployment Protection. If you were to lose your job, as long as it wasn’t due to your actions, then you can apply for forbearance through SoFi.

This protection lets you apply every three months to suspend your student loan payments. You can do this every three months for 12 months. You’ll still occur the interest on the loan, but it gives you time to find a new job without having to worry about the loan.

Learn More about SoFi

6. Earnest

Best For: Applicants with Strong Financial HistoryEarnest Logo

There are a lot of benefits to choosing Earnest as your refinance company. One of the most notable is its flexibility.

Unlike a lot of other loan companies, Earnest lets you customize the payment and loan term. You can pick anywhere between five years and 20. The other lenders out there have set plans you have to fit into.

They allow for refinancing amounts of anywhere from $5,000 to $500,000, which should fit just about anyone’s needs. They have fixed rates starting at 2.98% which is some of the lowest rates you’ll find on the market.

As far as fees go, you won’t find many. They don’t have any late fees, application fees, or prepayment penalty fees. Compared to other companies that nickel and dime you for every possible thing, it’s refreshing.

There is one hiccup for applicants refinancing through Earnest. They don’t allow co-signers. For some people, this could be the make or break for getting refinanced.

Earnest offsets this by looking at more than just credit history. They take a lot of factors into consideration when looking at an application.

Learn More about Earnest

7. Commonbond

Commonbond student loans logoBest For: Federal Loan Substitute

Commonbond is unique from other student loan providers on multiple levels, starting with fees. Commonbond does not charge an application fee or an early payment penalty, but it isn’t completely free of fees.

Unlike its competitors, Commonbond loans come with an origination fee of 2% of the loan amount, which is similar to that of a federal student loan.

But Commonbond also mirrors federal loans in a way that benefits you, with the most flexible repayment options on the market.

Commonbond offers four options for repayment: deferment, $25 payments or interest-only payments while enrolled, or full payments. With each of these options comes a six-month grace period, which many student loan providers don’t offer.

The online-only lender offers loans up to 100% of attendance, 5-15-year terms, fixed and variable interest rates, and cosigner release after two years of faithful payments.

Learn More About Commonbond

8. LendEDU

lendeduBest For: Streamlined Application

Similar to Credible, LendEDU is a marketplace for student loans. The site also offers refinancing loans, personal loans, credit card offers, and more.

After a quick soft credit check (which won’t hurt your credit score), LendEDU matches you with the best loans you’re eligible for. From there you can easily apply with the lenders of your choice.

Rather than going through the hassle of multiple applications for loans you may not even be eligible for, you can let LendEDU weed through the eligibility requirements for you.

LendEDU is also a great resource to take advantage of as you navigate through the world of financial aid, reviewing lenders, and providing you with informational courses and guides.

Learn More about LendEDU

9. LendKey

LendKey student loan logoBest For: Community Loans

LendKey takes a different approach to student loans than all the other companies featured on the list.

Neither a marketplace nor a loan provider, LendKey is a student loan servicer, one that partners with banks and local credit unions to provide low-interest loans.

Instead of working with the bank that is funding your loan, you communicate with and make payments to LendKey. LendKey’s structure allows it to offer unusually low interest rates in addition to no origination or early payment fees.

LendKey loans are only offered to students, rather than parents, though, and their repayment options are more restrictive than some.

But if the thought of partnering with a community credit union and locking in excellent rates appeals to you, you won’t go wrong with LendKey.

Learn More about LendKey

10. PNC

PNC Student Loans LogoBest For: Low Rates with No Fees

PNC is another major financial institution with appealing student loan offers. The national bank provides students with loans for undergraduate, graduate, and professional studies, as well as refinancing.

Like its competitors, PNC’s loans come without fees and offer competitive interest rates. They also offer a cosigner release after 48 months of timely payments.

Rather than offering loans up to the full amount of tuition, PNC caps its loans at $50,000 for undergraduate students and $65,000 for graduate students.

Much like federal student loans, PNC loans come with flexible repayment options such as a 6-month grace period after graduation, deferment while deployed in the military, and 2-month forbearances.

PNC also offers a .5% discount on interest for borrowers enrolled in auto-pay, adding to its long list of benefits.

Best Student Loan Companies Honorable Mentions

11. Ascent

Ascent Student Loans LogoBest For: Rates Without Cosigners

Less commonly known than some of its competitors, Ascent is another viable option for private student loans.

The company offers several options for undergraduate and graduate loans, with both variable and fixed-rate options and terms ranging between 5 and 15 years.

Ascent’s student loans also come with no origination fee, application fee, or fine for early repayment.

Ascent stands out for offering borrowers competitive rates without a cosigner, making it an ideal option for upperclassmen and graduate students with good credit scores.

However, if you do need a cosigner to lock in great rates, Ascent does offer a cosigner release.

Like Discover, Ascent also offers its customers a reward, giving qualifying students 1% cashback when they graduate.

12. PrivateStudentLoans.com

PrivateStudentLoans.com LogoBest For: Resources

Rounding out the list is another valuable marketplace: PrivateStudentLoans.com.

The site, powered by Edvisors.com, partners with reputable lenders like Sallie Mae, Commonbond, Discover, and College Ave.

A quick search of your college or university shows you what lenders are available to you and shows you key features of the loan, like the expected interest rate and any perks that come with it. From there, you can submit a quick application with the lenders on your list.

PrivateStudentLoans.com also has a helpful student loan calculator to give you an idea of what you’ll owe on various federal and private loans, along with other resources to walk you through the ins and outs of student loans.

What Student Loan Company Is Best For You?

Not all lenders are created equal, so you need to do your homework before picking a private student loan.

With the ten student loan companies above, you can bet you’ll find a loan to meet your needs.

Whether you’re looking for flexibility, low interest, or low monthly payments, there’s a lender out there for you.

Work on your credit (or line up a cosigner) and start shopping for rates today so you can finance your education tomorrow.

types of student loans

Types of Student Loans

Preparing for college is one of the most exciting times in life. Registering for classes, perusing the college bookstore, and decorating your dorm with your new roommate couldn’t be more fun.

This time can also be stressful, though, as obtaining a college education is pricey.

Scholarships and grants can help, but more often than not, they don’t cover all of the expenses that come with a degree. In those cases, student loans can be a valuable resource.

If you’re looking for a loan to help fund your education, you have plenty of options. Read on to learn which types of student loan might work best for you.

Table of Contents:

  • Federal Student Loans
  • Private Student Loans
  • Student Loan Refinancing
  • Consolidating Student Loans

What Are the Different Types of Student Loans?

There are essentially two types of student loans: federal and private. These loans operate differently in their terms, rates, and eligibility requirements.

Federal Student Loans vs. Private Student Loans

types of student loans
Find out which type of student loan is best for your needs

Before we walk through all the different types of federal and student loans, here’s a quick look at the main distinctions between them.

  • Lender: Federal loans, as their name suggests, are issued by the U.S. government, whereas private loans are offered by banks, credit unions, and other financial institutions, some of which focus solely on providing student loans.
  • Application process: You apply for a private loan just as you would with any other personal or business loan, through the lender. On the other hand, you apply for all federal student loans by submitting the FAFSA (Free Application for Federal Student Aid).
  • Eligibility: Eligibility for private student loans is based on your credit score, and your approval odds and rates can be improved with a cosigner. Federal loans, however, don’t always factor in your credit. You could also qualify for additional subsidized needs-based federal aid depending on your family’s expected contributions.
  • Interest: Federal loans offer fixed interest rates to borrowers, meaning the rates set at the beginning of the loan are locked in for the remainder of the agreement. Private student loan rates may be either fixed or variable, depending on the loan.
  • Terms of repayment: One of the most significant benefits of federal student loans is their flexible repayment plans. You can sometimes defer payments on your federal student loans or enroll in an income-driven repayment plan. Typically, your payment plan on a private student loan can’t be altered.

Because of their accessibility, flexible terms, and low interest, federal student loans are typically the first place you should look.

But in some cases, private student loans can be an excellent supplementary source of funding.

With the main differences between private and federal student loans in mind, here’s a quick overview of all the student loans you have to choose from.

Federal Student Loans

There are a few types of federal student loans, each coming with unique terms and benefits. Knowing the differences will help you choose the right type of loan for your needs.

Perkins Loan

If you’ve come across the name Perkins Loan in your research and hope to qualify for it, you’re out of luck.

A thing of the past since September 30, 2017, the Perkins Loan was one of the most advantageous for students requiring need-based aid.

It came with low interest and a grace period of 9 months. The Perkins Loan was also subsidized, meaning that the borrower wouldn’t be responsible for any interest that built up as long as they were enrolled half-time in a degree-seeking program.

Direct Loan

While you may not be able to get a Perkins Loan anymore, you can access a Direct Loan from the federal government.

Also referred to as Stafford Loans, these are some of the most popular federal loans for undergrad and graduate students.

There are two types of Direct Loans: Direct Subsidized Loans and Direct Unsubsidized Loans.

A Subsidized Stafford Loan, as it’s commonly referred to, does not accrue interest while the student is enrolled in school. The Unsubsidized Stafford Loan, however, does.

Eligibility for a Stafford Loan is simple: you have to complete the FAFSA and be a degree-seeking student enrolled at least half-time.

While the Direct Loan comes with an origination fee (just over 1% of the full amount of the loan), it also comes with plenty of benefits.

The Stafford Loan offers a grace period, income-driven repayment plans, competitive fixed interest rates, and terms between 10 and 25 years.

Direct Loans are an excellent option for parents and students across the board.

If you’re a student with little credit history to support your case or a parent with a low credit score, you could especially benefit from this advantageous loan.

PLUS Loan

The main alternative to the Federal Direct Loan is the PLUS Loan. PLUS Loans come with all the same great benefits of a Direct Loan, but there is a catch.

While Direct Loans don’t require a credit check, your eligibility for a PLUS Loan is based on your credit score. To qualify for one of these loans, you need to either have an endorser or a fair credit score.

In addition to requiring a credit check, these loans come with a higher origination fee, which is over 4% of the total amount of the loan, and higher interest rates.

Grad PLUS Loans

Grad PLUS Loans are designed to help graduate and professional degree-seekers who need more aid to supplement their financial aid package. Grad Plus borrowers don’t start making payments until after graduation.

Parent PLUS Loans

Parent PLUS Loans, on the other hand, help parents pay for their dependents’ education. These loans are expected to be repaid while the student is still in school, but they can be deferred upon request.

While PLUS Loans come with steeper origination fees and higher interest rates than Direct Loans, they do come with the same beneficial repayment options.

Direct Loans are the best choice for most students. However, if you have a high credit score and find yourself in need of additional funding, a Direct Loan could be worth considering.

Private Student Loans

If you’ve utilized all the federal aid you’re eligible for and still need help, there are plenty of private student loans on the market.

If you’ve ever applied for a personal, business, home, or auto loan, you may notice that the process of getting a private student loan is similar.

The lender will check your credit report, and based on your score, income, and credit factors, will offer you a set borrowing limit, terms, and interest rate.

Keep in mind that these loans are unsubsidized, so you’ll be footing the bill on interest accrued while you’re in school. And they tend to have higher interest rates, which are sometimes variable, than federal loans.

You’ll also find far fewer options for changing your repayment plan or deferring payments. With that in mind, you should be sure to read the fine print and choose your loan carefully.

While you’ll typically find federal loans to be the most beneficial option, if you have a good credit score, you could find that the interest rates for a private loan are more competitive than PLUS loans of the same amount.

To get the most out of a private student loan, work to improve your credit score and lock in a low fixed rate.

While you can access private student loans from most financial institutions, both local and national, you could benefit from working with one of the best student loan companies. That way, you can get advice, quotes, competitive rates, and a specialized plan for your financial needs.

Student Loan Refinancing

When the time comes to pay back your student loans, you may want to consider refinancing or consolidating your loans.

Refinancing your student loans could help to reduce your interest rates and allow you to pay off your loans more quickly.

When you refinance a student loan, you apply for a new loan from a private lender to total the amount of your current loans.

The lender will pay off all your student loans, replacing them with a single loan. You then enter an agreement with the lender, with new interest rates and terms, and proceed to make your payments to them.

Refinancing can be a great solution for borrowers looking to pay less each month, but it does have its downfalls. You should keep in mind that refinancing your federal student loans means losing access to benefits like income-driven repayment, forgiveness, and deferment.

But if you or your cosigner have a high credit score ranging from the upper 600s to mid-700s, you could get significantly lower interest rates by refinancing.

If you plan to refinance, be sure to shop around for the best rates. You may even be able to find flexible repayment plans with some refinanced loans.

Consolidating a Student Loan

Last but not least, you always have the option of consolidating your student loans. Whether your credit score is on the lower end of the spectrum or you don’t want to relinquish the benefits of federal loans, you might want to look into consolidation.

The Department of Education’s Direct Consolidation Loan Program allows you to merge multiple federal loans into one, making all your payments to the same servicer, at the same time.

You may even be able to lock in a new fixed interest rate while maintaining flexibility in your repayment schedule.

Consolidating may lengthen the term of your loan, meaning you pay more in interest over time. However, it can ease your financial burden by lowering your monthly payments…

If you’re mainly looking to decrease your monthly payments and streamline the repayment process, even if it costs more over time, consolidating could be a good strategy.

Just be sure to read the terms carefully and compare the terms of the consolidated loan to your current ones to decide if it’s the best call.

Student Loans Make College Tuition Manageable

Don’t let the cost of college attendance get you down.

While tuition is expensive, there are plenty of scholarships, grants, and loans to help make your dreams a reality.

You can’t change the cost of tuition, but you can take steps to make it more affordable.

Make smart financial moves to boost and maintain a solid credit score, and shop around to compare student loan rates. These moves will ensure you get the most out of your student loans.

How Co-Signing on a Student Loan Affects Your Credit

Graduating from college with student loan debt obviously isn’t any fun for the graduates. It can also be a headache for their parents.

Parents co-signing a student loan for their children can make it easier for the loan to be approved and can reduce the interest rate.

But it can leave parents with a lower credit score, make qualifying for a mortgage or other loan more difficult, affect their retirement, and makes them just as responsible for the college loan as their student.

The $1.45 trillion in outstanding student loan debt in the U.S. is the second-highest level of consumer debt behind only mortgages.

About 40 million Americans hold student loans and about 70 percent of bachelor’s degree recipients graduate with debt.

What Co-signing Means

While parents may talk to their children about student loans, few may go over how to repay the loans.

If their kids don’t repay the loans that they’ve co-signed, the parents are legally responsible for the loans. If parents can’t afford those payments, then they shouldn’t co-sign the loans.

Most federal student loans, such as those through FedLoan or Nelnet don’t require a co-signer, but private loans often require one because students usually have little or no credit history.

A co-signer can be a parent, grandparents, guardian, or other credit-worthy adults who will be responsible for the full amount of the student debt, regardless of the borrower’s ability to repay the loan.

Having two people responsible for repaying a loan can reduce the interest rate by as much as half a point, even if the co-signer doesn’t have a better credit score than the student.

If they do, the rate could go lower.

How Co-signing On A Student Loan Affects Your Credit

Long before a student loan becomes due, it could hurt a co-borrowers credit score.

The loan will show up on their credit report, just as any other loan would, and could hurt their credit score if it looks like they have too much debt.

The new loan could also improve their score by improving the mix of credit.

Having a variety of loans that are paid on time — mortgage, auto loan, and credit cards, among others — can raise a credit score.

When payments start on student loans — usually within six months of graduation — the co-signer’s credit score could drop if the new graduate isn’t making monthly payments on time or not repaying the loan at all.

A recent survey of co-signers by LendEDU found that 62 percent of parents who co-signed their children’s student loans believe that their credit scores have been negatively impacted by the agreements.

For co-signed private student loans, the most likely cause of the co-signer’s damaged credit score is a late payment by the primary borrower, the survey found.

To a credit bureau, late payment by the borrower is essentially the same as the co-signer making a late payment.
The survey found that 43 percent of people said their children have made late payments that hurt the co-signers’ credit scores.

Difficulty Getting Other Loans

Late payments can have a domino effect on the co-signers.

After lowering their credit score, they can have more difficulty being approved for other loans such as a mortgage or auto loan.

Forty percent of the LendEDU respondents said they had a tougher time qualifying for financing after co-signing student loans.

Late payments or defaulting on the loan will damage the credit history of both parties — student and parent.

When the co-signer’s credit report is evaluated for a potential loan, including refinancing a mortgage, they could be denied or face a higher interest rate.

If a graduate misses too many student loan payments or defaults on the loan, student loan lenders will then go to the parent to make the monthly payments.

Retirement Problems

Student loan debt problems can also follow co-signers into retirement and can cause them to work longer and delay retiring.

The U.S. Government Accountability Office found that outstanding federal student loan debt for people 65 and older is growing, at $18.2 billion in 2013, up from $2.8 billion in 2005.

The good news was that only 3 percent of households headed by people 65 and older — about 706,000 households — carry student loan debt.

Respondents in the LendEDU survey were almost split on if their child’s student debt put their retirement in jeopardy.

Most said it didn’t, at 53 percent, and 47 percent said they felt it did jeopardize their retirement.

An upswing in the stock market before the survey started and the resulting growth in retirement funds may explain why most people didn’t see an effect, LendEDU reasoned.

Options For Co-Signers

Co-signers can be released of their responsibility for the loan if the borrower seeks a release from the lender.

Terms vary, and can include on-time payments for at least a year and are more likely to happen with private student loans.

Just one missed payment can disqualify a borrower from this release option.

The co-signer would then be removed from the loan and the primary borrower would be entirely responsible for it.

Co-signers can also be released if the primary borrower refinances the loan on their own.

This requires taking out a new loan to pay off the old loan, when the co-signer would be removed from the old loan.