Private Student Loans: Tens of thousands of individuals private student loans who took out private loans to pay for college but have never been able to keep up payments might get their debts wiped away because critical paperwork is lost. The troubled personal loans for students, which total at least $5 billion, are ...
5 Best Private Student LoansAvailable in 2018Private student loans are worth considering if your federal student aid allotment isn’t enough to cover your tuition and other college costs. Private student loans offer flexible interest rate options and repayment terms, as well as extra features.But before you sign anything, it’s important to know what you’re looking for and to choose the best private student loans for college. After all, not all lenders are created equal. As you compare privatestudent loans, five of your best options include:Citizens BankCollege AveLendKeySallie MaeCommonBondLearn more about each of these lenders and about how to choose the right lender for your college loans.What to look for in a private student loanA variety of factors differentiate the best private student loans. The main ones to focus on are interest rates and fees.The amount of money you take out on your college loan is only the beginning. Give yourself the best chance of maintaining a manageable level of debt by keeping your rates and fees as low as possible.As you review different interest rates, remember that you can apply for more than one loan to see which one will give you the best deal. There are two ways you can do so without your credit score taking a hit:1.Many private student loan lenders do a soft pull on your credit, which enables you to see what you might be approved for without taking a hit on your credit.2.If you were to do a formal application with more than one lender, you could avoid taking a hit on your credit by rate shoppingwithin a two-week window.Besides looking for offers for the best student loans for college, also look for perks to take advantage of. For example, some lenders offer college students a lower rate for good grades. Others offer the ability to release your cosigner.Once you’ve narrowed down your list of options, use our Student Loan Hero payment calculatorto determine what your monthly payments might be.5 top private student loansNot sure where to begin your search? Check out our list of the top private student loans offered by the best private student loan lenders. Think of it as a jumping-off point as you start your research.1. Citizens BankNo application or origination feeNo fee for paying off the loan earlyInterest rate reduction if you already have an account with Citizens BankInterest rate reduction if you set up automatic paymentsStudent and parent loan optionsAvailable to undergraduate and graduate studentsLoans from $1,000 to $295,000, depending on your degreeStudent repayment options of five, 10, or 15 yearsOption for students to make full or interest-only payments while in school, or to defer payments until after graduationParent repayment options of five or 10 yearsOption for parent to make full or interest-only payments while student is in college (but not to defer payments)Fixed and variable ratesAdditional informationApplicants will most likely need good credit or a qualified cosigner to be approved.Potential qualification for cosigner release is based on creditworthiness and whether there have been 36 consecutive on-time principal and interest payments.2. College AveNo application or origination feeNo fee for paying off the loan earlyInterest-rate reduction if you set up automatic payments with College AveStudent and parent loan optionsAvailable to undergraduate and graduate studentsLoans from $2,000 up to 100 percent of the school-certified cost of attendanceStudent repayment options of eight, 5, 8, 10 or 15 yearsOption for students to make full, interest-only, or flat payments while in school or to defer payments until after graduationParent repayment options of five to 12 yearsOption for parent to make full, interest-only, or interest-plus payments while student is in schoolUp to $2,500 deposited into parent’s bank account to pay for student’s education costsFixed and variable ratesAdditional informationPotential qualification for cosigner release is based on the following: oCreditworthinessoIf more than half the scheduled repayment period has elapsedoIf most recent 24 consecutive payments were made on time and didn’t include any forbearance or workout programs for hardship reasonsoIf borrower has earned in income more than twice the outstanding balance on their College Ave loan for the previous two yearsoIf borrower has no reported late payments on their credit report in the past 24 months3. LendKeyLoans facilitated by LendKey but funded by credit unions and community banksNo application or origination feeInterest rate reduction if you set up automatic paymentsMinimum of interest-only payments or $25 per month during the in-school period and grace period, although students can make full monthly payments during that time if they wantStudent repayment option of 10 years after the five years of minimum interest-only or $25 payments during college or grad school (so it could be a total of 15 years of repayment, the last 10 of which must be fullprincipal and interest payments)Additional informationPotential qualification for cosigner release is based on the following: oCreditworthinessoIf there have been 24 consecutive, full, on-time principal and interest payments4. Sallie MaeNo originationfeeNo fee for paying off the loan earlyInterest rate reduction if you set up monthly payments by automatic debit with Sallie MaeAvailable to undergraduate and graduate students, as well as parentsAvailable for private K-12 education, career training certificate courses, dental and medical school and/or residencies, other health profession loans, MBA loans, and bar study feesLoans from $1,000 up to 100 percent of the school-certified cost of attendanceThree repayment options to choose from: deferred, fixed, or interest-only while you’re in school and during your grace periodFixed and variable ratesAdditional informationMaximum rates for graduate students are lower than for undergraduates.Borrowers can apply for cosigner release after graduation and when 12 on-time principal and interest payments have been made, without having used hardship forbearance or a modified repayment plan during that time.Borrowers and cosigners receive free FICO credit score tracking.Borrowers receive free tutoring for school (up to 120 minutes) or study resources through Chegg.5. CommonBond2 percent origination feeNo application feeNo fee for paying off the loan earlyInterest-rate reduction if you set up automatic monthly payments with CommonBondAvailable to undergraduate students, as well as MBA candidates and other graduate studentsLoans for up to 100 percent of the school’s cost of attendanceStudent loan repayment options of five, 10, or 15 yearsFixed and variable ratesFour different repayment plans for students, all of which come with a six-month grace period: deferment until after college or grad school, fixed monthly payments of $25 during school, interest-only payments during school, or full monthly payments for the duration of the loanAdditional informationApplicants must apply with a creditworthy cosigner (excluding MBA students, who aren’t required to have a cosigner to apply).Student borrowers can apply for cosigner release after paying on the loan for two years.Students dealing with economic hardship after graduation can apply for forbearance.Every time a loan is funded, CommonBond funds a loan for a student in need.Is a private student loan right for you?When you consider whether a private lender is right for you, remember that private student loans for college don’t come with the same protections as federal loans.Federal student loans offer income-driven repayment plans, as well as deferment, forbearance, and forgiveness options. Some private student loan lenders do offer hardship programs in case your income hits a snag, but that option isn’t guaranteed for all of them.Private student loans also start accruing interest immediately. On the other hand, if you qualify for subsidized federal student loans, the Department of Education will pay the interest on them until you graduate.Also, keep in mind that you’ll likely need a cosigner. That’s because private student loan offers are based on your creditworthiness, and most college students are too young to have much of a credit history.If you get a loan with a cosigner, make sure all your payments are on time. If not, your cosigner will be responsible —and missing payments or going into default can damage their credit as well as yours.If you see tough financial times ahead, reach out to your lender immediately to see if you can adjust your repayment plan. It doesn’t hurt to ask. Plus, the sooner you handle the situation, the better your chances are of having a good outcome.Like all financial tools, private student loans can be a lifesaver if you use them wisely. They are best used as a backup when you can’t get enough federal student loans to cover your tuition and other education costs. In that case, private student loans can be a great tool to finish off the funding for your education.