Ultimate Guide To Student Loans: The 10 Best Student Loans In 2022 For College And University

Are you a student looking forward to pursue your dream course in college or graduate school?. Here’s a list of the best students loans you can opt for in 2022.

Ultimate Guide To Student Loans: The 10 Best Private Student Loans In 2022 For College And University

Student loans are a big deal when entering college and university because you’ll likely need to take out student loans to pay for them. Whether your college plans involve heading to campus or logging on for online learning, one thing is certain: You will need a way to pay.

To anyone new to students loans, there are two types; federal student loans and private student loans. There are vast differences between the two but primarily, federal student loans are often the most affordable way to borrow, they may not be enough to cover all of your college costs. Private student loans, as well as grants and work-study programs, can cover the gap between what you need and how much you can afford to pay toward your college expenses.

According to the College Board, in 2021–2022, the average cost of tuition and fees at a public university for an in-state student was $10,740. The cost jumped to $38,070 for a private school.

But be cautious about borrowing too much. “With so much uncertainty regarding college campuses and … class schedules, planning for expenses is not an easy task,” says Bruce McClary, vice president of marketing for the National Foundation for Credit Counseling and a U.S. News contributor.

It’s best to exhaust all of your federal student loan options before even considering private student loans. Rates for federal loans issued between July 1, 2021, and June 30, 2022, are just 3.73% for undergraduate Direct Subsidized and Unsubsidized loans.

But which lenders offer the lowest rates and the most robust benefits? We’ve compiled a list of the best federal and private student loan lenders available today to help you find the best option for you.

This guide can help you navigate the school year. What you’ll learn here:

  • What are student loans?
  • Why are student loans important?
  • What are the types of student loans?
  • How do student loans work?
  • What are the pros and cons of federal loans?
  • What are the pros and cons of private student loans?
  • How much do students loans cost?
  • Are student loans worth the cost?
  • How do we choose the best student loans?
  • Methodolgy
  • What are some alternatives to student loans?
  • Are there loans for international students?
  • What are the best students loans in 2022?

What are Student Loans?

Wikipedia defines a student loan as a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses.

Why are Student Loans important?

A Student Loan is a smart way of covering your college costs. There’s no shortage of expenses in college life. 

Student loans are similar to mortgages in that they are usually considered “good debt.” Both are large amounts of money that take a long time to pay back. By paying it back each month, you show the lender your ability to repay a loan and prove your creditworthiness, which can in turn increase your credit score.

In addition, you “get” something from good debt. In the case of a mortgage, you get a house and the value of that house generally increases over time. With student loans, you get a college education, which increases your lifetime earning potential. This is why these two types of debt are good debt, rather than bad debt.

What Are the Different Types of Student Loans?

Typically, student loans fall into two major categories: federal and private. Private loans are also called alternative loans. 

Federal student loans: There are multiple types of federal loans but, in general, they have lower interest rates and better repayment terms than private loans. They’re also more readily available and may be easier to obtain than a private loan. They have fixed interest rates and some options aren’t dependent on your credit history. 

Private student loans: These should be looked into after federal student loans are exhausted. Private student loans may cover continuing education without a degree, tuition for non-U.S. citizens, and for education costs incurred after graduation.

In a recent interview with Carrie Johnson, an Accredited Financial Counselor (AFC®) and an associate professor at North Dakota State University, she said “Federal student loans have many repayment benefits. For example, there are forgiveness options for certain occupations or in the event of a disability. If a borrower is struggling to make payments, there are options to suspend payments for a period of time. Private student loans do not offer these benefits and in many cases, if a borrower passes away, their cosigner is then responsible for the remainder of the loan balance.”

How Do Student Loans Work?

Student loans are money borrowed from the government or a private lender to pay for college. The loan has to be paid back after graduation, along with the interest that has been accrued. The loan can usually be used to cover tuition, room and board, books, and other school-related expenses. Student loans are different from scholarships and grants which don’t have to be paid back.

You can apply for a student loan online and fill out your financial information and that of your parents (if applicable). Student loan qualifications are different depending on the type of loan you receive but can include FICO score and income. Typically, you will need multiple student loans to cover your entire tuition and all related expenses. A financial aid counselor from your high school or your future college should be able to help you better navigate the process. 

What are the pros and cons of federal loans?


  • The government funds federal student loans and parent loans
  • Terms and conditions are set by law
  • Income-driven loan repayment plan options
  • Opportunities for student loan forgiveness
  • No credit check
  • Fixed rates, low-interest rates and flexible repayment options
  • Free application process


  • Only available to U.S. citizens
  • Subsidized loans are need-based
  • Subsidized interest only applies to undergraduate students
  • No statute of limitations on loan collections

What are the pros and cons of private student loans?


  • Available to U.S. citizens and qualifying international students
  • No financial need requirements
  • Fixed and variable rates
  • Higher borrowing limits


  • Each bank sets its own terms and conditions
  • Limited repayment options and hardship assistance programs
  • No student loan forgiveness opportunities
  • Requires credit check
  • Origination, application, and early payment fees may apply
  • No student loan forgiveness opportunities
  • Online pre-qualification availability varies by lender
  • The government and your school limits the loan amount

What Are Some Alternatives to Student Loans?

If you decide that a student loan isn’t for you or want to know what other options you have, there are some alternatives:

  • Parents pay for college
  • Merit-based scholarship
  • Athletic scholarship
  • Work-study aid 
  • Savings or an inheritance
  • Grants

How Much Do Student Loans Cost?

The main cost associated with student loans interests. However, some loans may also charge origination fees, prepayment penalties, and late fees. Federal loans tend to have lower interest rates so it’s best to apply for them first. Currently, the interest rate on federal student loans for undergraduates is 3.73%.2

Are Student Loans Worth the Cost?

Student loans can be expensive, with application fees and making monthly principal and interest payments. They can get especially expensive if you choose to go to grad, medical or law school in addition to a 4-year college. If you have an alternative way to pay for college, then it’s great to explore that first. Otherwise, student loans are generally worth the cost because you’re investing in yourself and your education, which should help you land a higher-paying job or acquire the knowledge and skills to start your own business. 

How We Chose the Best Student Loans

There are so many federal and private student loans to choose from. We reviewed dozens of student loans and chose the best student loans based on their interest rates, types of loans offered, cosigner requirements, loan consolidation options, and the overall application process. 


TheVibely based this article with reference from US News and Investopedia. Per U.S. News, it selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria, and customer service. Those with the highest overall scores are considered the best lenders.

In calculating the score, US News based on factors like customer service ratings, fixed APR, variable APR, loan product availability, minimum and maximum loan terms, minimum and maximum loan amounts, minimum FICO score, and online features to derive data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers.

The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender. To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry.

Whereas Investopedia data is also based on private student loan lenders of undergraduate private student loans (as well as companies that refinance student loans) narrowed down from national banks, credit unions, and lenders.

The criteria for measuring each lender included all available APR ranges for these loans, fees charged, repayment plans and hardship options offered, and the inclusion of additional features such as cosigner release, parent loan availability, and a refinance option.

Investopedia speculates that the “best of” awarded the highest status to the lenders that are available nationwide that offered the lowest fixed APRs, the most comprehensive hardship programs, and the least number of fees.

Are there loans for international students?

The International Student Loan Program is available to international students from around the world who are looking to study in the USA. To be eligible, you have to be attending one of the approved schools, earning credit and you must also have a US citizen or US permanent resident to cosign the loan with you. International Student Loan offers funding that is disbursed directly to you with competitive interest rates and no application fees! Names of International loans include MPOWER Financing; Prodigy Finance; Citizens One; Ascent Student Loans, and Discover.

Best Student Loans of January 2022

  1. Best Student Loan MarketplaceCredible
  2. Best OverallRhode Island Student Loan Authority
  3. Best Interest RateCollege Ave
  4. Best Student Loan ConsolidationSplash Financial
  5. Best Parent Student LoanCollege Ave
  6. Best for International StudentsMPOWER Financing
  7. Best for Students Without a CosignerFunding U
  8. Best for Students With CosignersSallie Mae
  9. Best Good Grades RewardDiscover
  10. Best for Member BenefitsSoFi
  11. Best for Forebearance FlexibilityAscent Student Loans
  12. Best GraduationRewardCustom Choice
  13. Best for No FeesEarnest
  14. Best for DACA Recipients: Discover

Below are short details and links to TheVibely‘s top ten (10) best student loans in 2022.

#1. Credible (Best Student Loan Marketplace)

Before applying for a student loan, it’s smart to compare rates from several different lenders to ensure you get the best interest rate and loan terms. Instead of doing this process on your own, which can be frustrating and time-consuming, you can use a student loan marketplace to speed things up.

With Credible, you fill out a simple form and get rate quotes from multiple student loan lenders within minutes. Getting a quote doesn’t affect your credit score, and you can view multiple repayment options. Once you find a loan that works for you, you and your cosigner (if applicable) can complete the loan application online.

Using Credible is completely free. Credible gets a referral fee when you apply for a loan through a lender on its marketplace. Credible doesn’t include all private student loan lenders available, but it does have a range of top lenders, including Ascent, Citizens Bank, College Ave, and Sallie Mae.

Read the full review: Credible Student Loans

#2. Rhode Island Student Loan Authority (Best Overall)

When looking for an undergraduate student loan, it’s important to pay attention to interest rates, loan terms, and lender perks that can improve your borrower experience. With those factors in mind, the Rhode Island Student Loan Authority (RISLA) stands apart as the best overall lender.

Despite its name, residents from any state can qualify for a RISLA loan. However, applicants who live, work, or attend college in Rhode Island may be able to get a lower interest rate than other borrowers.

Loan Amounts

Applicants can borrow $1,500 to $45,000 per year to pay for their undergraduate degrees. There are no application, origination, or prepayment penalties.

Interest Rates

Unlike some other lenders, RISLA only offers fixed-rate loans. However, these loans have fairly low-interest rates. The interest rate on a loan with Student Immediate Repay is 2.99%, while a Student Deferred Repay loan has a rate of 4.74% (both include an autopay discount).

Repayment Options

As an undergraduate borrower, you have 2 repayment options: 

  • Student Immediate Repay: With this option, you begin making payments 15 days after the final loan disbursement. You’ll get the lowest possible interest rate. 
  • Student Deferred Repay: If you opt for Student Deferred Repay, you’ll get a higher interest rate. However, you won’t have to start making payments until 6 months after you leave school.

Extra Perks

While RISLA offers low-interest rates and a variety of repayment plans, what really sets the lender apart is the benefits it provides borrowers:

  • Income-Based Repayment: If you’re facing a financial hardship and can’t afford your payments, you may qualify for RISLA’s Income-Based Repayment Plan. With this approach, your repayment term is extended to up to 25 years, and your payments are based on your income and family size.
  • Nursing Reward Program: Rhode Island resident or students attending eligible schools in Rhode Island may be eligible for the Nursing Reward Program. Under this program, RISLA will lower the interest rates on the loans of qualifying borrowers to 0% for 48 months.
  • Loan Forgiveness for Interns: Students who complete an eligible internship can receive up to $2,000 in student loan forgiveness.
  • Autopay Discount: Sign up for automatic payments and receive a 0.25% discount on your interest rate.
  • Forbearance: In some cases, you may be able to temporarily postpone your payments if dealing with financial issues.
  • Multi-year approval: Some borrowers will qualify for RISLA’s multi-year program. As long as your information and your cosigner’s income, credit score, and other key information remain consistent or improve, you can qualify for additional loans without having to submit another application.

RISLA provides families with information on how to find financial aid, including federal loans, grants, and scholarships. It also has programs that reward students for completing internships, helping them prepare for careers after graduation.

Read the full review: RISLA Student Loans

#3. College Ave (Best Interest Rate)

When you’re applying for a student loan, you can often choose between variable and fixed interest rates. While fixed-rate loans have the same interest rate for the duration of the repayment term, the interest rate on variable-rate loans can fluctuate over time. If you want to pay off your debt quickly, opting for a variable-rate loan can allow you to take advantage of the lower initial rate. 

College Ave offers some of the lowest rates on undergraduate student loans:

  • Variable Rate: As low as 0.94% (including 0.25% autopay discount)
  • Fixed Rate: As low as 2.94% (including 0.25% autopay discount).

With College Ave, you can borrow up to the total cost of attendance (COA). There are 4 different repayment options to choose from, along with 4 different term lengths, and you can defer your payments until after graduation or opt to make in-school payments.

College Ave offers the following repayment options:

  • Full Principal and Interest Payment: Start repaying principal plus interest right away to save the most over the life of your loan
  • Interest-Only Payment: Make payments to cover the interest only while in school
  • Flat Payment: Make $25 payments while in school to reduce accrued interest
  • Deferred Payment: Pay nothing while in school, but interest will still accrue

Read the full review: College Ave Student Loans

#4. Splash Financial (Best Student Loan Consolidation)

Private student loan consolidation, also known as student loan refinancing, can be a smart way to lower your interest rate and save money over the life of your loan. Splash Financial is our pick for the top student loan refinancing company.

There are a couple of different factors that impacted our decision: 

  • Interest rates: Splash Financial offers very low interest rates: variable rates as low as 1.74% (autopay included) and fixed rates as low as 2.30% (autopay included).
  • Cosigner release: Typically, Splash borrowers can request a cosigner release after making 12 consecutive monthly payments on time.

The minimum refinances loan amount is $5,000. There is no maximum loan amount—it will depend on the specific lending partner that refinances your loans and other factors in your loan application. In order to refinance through Splash Financial, you must have obtained a 4-year degree from a Title IV accredited institution or an associate degree in an eligible field.

Read the full review: Splash Financial Student Loan Refinancing

#5. College Ave (Best for Parents student loans)

As a parent, you want what’s best for your child. And that may mean helping them pay for their education by taking out a parent-student loan.

College Ave offers 11 different repayment terms for parent student loans, ranging from 5 to 15 years in length. That flexibility allows you to choose the loan term that works best for your budget.

College Ave allows parents to borrow between $1,000 and the total COA. As an added perk, the lender allows you to get up to $2,500 of the loan delivered directly to you, so you can manage the purchasing of items such as books, dorm supplies, and a new computer for your student.

The lender also has low-interest rates, with variable rates as low as 0.99%, and fixed rates as low as 2.94% (lowest rates include an autopay discount). College Ave has three different repayment plans, so you can decide which is best for you:

  • Interest-Only Payment: While your child is in school, pay only the interest charges each month. 
  • Interest Plus Payment: Pay the monthly interest charges plus whatever extra amount you decide to put toward principal each month while your child is in school.
  • Full Principal and Interest Payment: Start repaying the full payment—including both principal and interest—immediately once the loan has been disbursed.

Read the full review: College Ave Student Loans

#6. MPOWER Financing (Best for International Students)

Unfortunately, international students often struggle to find private student loans to pay for school, especially if they don’t have access to a cosigner who is a U.S. citizen. For those students, MPOWER Financing is the best lender. 

MPOWER Financing offers undergraduate and graduate student loans to international students as well as U.S. citizens, permanent residents, and Deferred Action for Childhood Arrivals (DACA) students attending 350 approved colleges and universities in the U.S. and Canada. 

MPOWER Financing doesn’t require applicants to have a cosigner, an established credit history, or collateral. 

For international undergraduate students, you can borrow $2,001 to $25,000, with a $50,000 lifetime borrowing limit. The undergrad APR is 14.98% (12.94% for grad students), but you can qualify for up to 1.5% in rate discounts, including: 

  • 0.50% automatic payment discount
  • 0.50% on-time payment discount
  • 0.50% graduation and employment discount

Both graduate and undergraduate loans require interest-only payments while you’re in school and during your 6-month grace period following graduation, and both have a 10-year repayment term.

Read the full review: MPOWER Financing Student Loans

#7. Funding U (Best for Students Without a Cosigner)

As a college student who may not have an established credit history or any income, you can struggle to qualify for a private student loan on your own. If you don’t have a parent or relative to act as a cosigner, finding a lender who will approve your loan application can be difficult. For those who don’t have access to a cosigner, Funding U may be the best option.

Unlike some other lenders who offer non-cosigned loans to only college juniors and seniors, Funding U allows undergraduate students of all grade levels to qualify for a loan. You must be a U.S. citizen or permanent resident who is over the age of 18 and enrolled in a 4-year degree program at an eligible 4-year college. You can borrow between $3,000 and $15,000 per year. Your eligibility for a loan is based on your GPA (minimum varies by grade level), your project earnings, total debt, historical data from your school, and more.

The fixed interest rate on undergraduate student loans for the 2020-21 school year is 7.99% to 12.99%, which includes a 0.5% autopay discount. You can make either $20 minimum payments or interest-only payments each month you’re in school for up to 51 months. Loan repayment (principal plus interest) begins 6 months after graduation.

Unfortunately, Funding U only lends to residents of certain states. You must live in one of the following states to qualify for a loan: Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Maryland, Massachusetts, Michigan, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia, and Wisconsin.

#8. Sallie Mae (Best for Cosigners)

Sallie Mae Loans are available for parent borrowers and graduate, undergraduate and vocational students attending non-degree-granting schools. Sallie Mae is also one of the few lenders with student loan options for part-time students.

If you attend a non-degree granting school, Sallie Mae’s Career Training student loan offers competitive fixed- and variable-rate loans with no origination fee or prepayment penalties. Fixed-rate loans range from 6.62% to 13.83% APR, while variable-rate loans start at 4.12% and go up to 11.52%.

Additionally, Sallie Mae offers a “multi-year advantage” for returning students, which allows recipients to continue borrowing year after year if they meet credit and income qualifications. Note that chances for approval are significantly higher with a cosigner.

One drawback of doing business with Sallie Mae is that you won’t get a personalized rate until you apply. And while Sallie Mae doesn’t disclose credit requirements for all of their loans, the minimum credit score for approved undergraduate student loan borrowers is 748.

If you’re a parent, APRs are comparatively higher than for undergrad and grad students. Fixed-rate parent loans range from 5.49% to 13.87% APR and variable rates go up to 12.99%.

Repayment options and fees

As a Sallie Mae borrower, you can choose from interest-only, fixed-monthly repayment options or and defer payments while in school. You can also get a 0.25% interest rate discount for enrolling in autopay and the option to enroll in the Graduated Repayment Period for any loan.

This program allows you to make interest-only payments for a year after graduation while you’re transitioning from school to your new career. All of Sallie Mae’s loans are 100% coverage, meaning that they help finance all of your education-certified expenses including travel, tuition, housing, books, fees, and your laptop.

Loans offered by Sallie Mae:

  • Undergraduate
  • Career training
  • Parent, K-12
  • Graduate
  • MBA
  • Medical school residency
  • Dental school residency
  • Health professions graduate
  • Law school
  • Bar study
  • Parent PLUS

Read for the full review: Sallie Mae

#9. Discover (Best Good Grades Reward)

Discover is a national bank offering a wide range of consumer financial products, including student loans, credit cards, personal loans, home loans, and more.

With Discover, students who earn a GPA of 3.0 or higher in college or graduate school will be eligible for the reward of a good grade on each new Discover student loan. This reward is a one-time cash reward in which Discover will pay you one percent of your school-certified loan amount. If you’re an incoming freshman, you can qualify for the reward on your first Discover student loan with a high school GPA of 3.0 or higher.

The reward of a good grade isn’t the only benefit of borrowing with Discover. The bank has a long list of repayment benefits to help borrowers struggling to meet their monthly payments. These benefits include deferment options, a grace period extension, temporary interest or payment reductions, and more.

Why It’s One of the Best? Discover rewards students who earn at least a 3.0 GPA in high school, college, or graduate school with a one-time payment of one percent of your school-certified loan amount.

Are you interested in applying for a loan with Discover? You can apply in 15 minutes or less from your computer or mobile device by clicking here.

#10. SoFi (Best for Member Benefits)

SoFi is a mobile-first online personal finance company based out of San Francisco, California. It made a name for itself in 2012 as the first company to refinance both federal and private student loans. Since then, it has expanded into nearly all consumer lending markets with over $50 billion in loans funded.

Without a doubt, one of the biggest draws to borrowing from SoFi is the wide range of benefits available to its members. These benefits fall into three categories: money, community, and career.

Money benefits include financial planning advice from credentialed advisors, referral bonuses, and member rate discounts. Community benefits include attending networking events, dinners, and happy hours. Career benefits include tools to help you earn a raise, personalized career advice, and an unemployment protection program.

Why It’s One of the Best? SoFi members enjoy a wide range of benefits, including a 0.125% rate discount, career coaching, unemployment protection, and more.

Are you interested in applying for a loan with SoFi? You can prequalify without impacting your credit in minutes by clicking here.

Student loans FAQ

How do student loans work?

Student loans are a financing option available to students and parents who are unable to cover education expenses out of pocket. There are two main types of student loans: federal and private.

Federal student loans are issued by the U.S. Department of Education. They tend to feature competitive rates and better repayment terms and protections. These are still loans, however, and they must be paid back with interest.

Private student loans are issued by private lenders. These types of student loans don’t offer the same protections as federal student loans, but they are an alternative for those who have taken the maximum federal student loan amount and still need help to fund their education.

Once you take out a student loan, interest will begin to accrue. For this reason, it’s a good idea to start making payments toward your loans while you’re still in school. Moreover, while you don’t have to pay back your federal student loans while in school, some private lenders may require it.

How to apply for student loans?

To apply for federal student loans, you first need to complete the free application for federal student aid (FAFSA). Your financial aid officer at your school or university will provide you with information about what student loans you qualify for and other forms of financial aid.

What is a private student loan?

A private student loan is a loan offered by banks and credit unions to cover tuition and other related expenses. They are available to parents and students and feature either variable or fixed interest rates and different repayment options. To qualify for a private student loan, applicants must have good credit or apply with a qualifying cosigner.

What happens if you don’t pay student loans?

If you cannot make your student loan payments on time, call your lender to see what your options are. Many private lenders offer protection programs like SoFi, whose Unemployment Protection Program allows your loans to be in forbearance for up to 12 months.

If you cannot make your payments and default on your loan, your credit score and history will be affected. Check our section on Student Loans and Covid-19 for more information about payment options and other changes related to the coronavirus pandemic.

What are the best student loans?

Federal student loans and other forms of student financial assistance should be the main options for students to afford tuition and other related college expenses.

If you have exhausted your federal student loans and federal financial aid, then private student loans are the next best option.

Do student loans affect credit scores?

Student loans function as any other type of installment loan would. This means that if you do not make on-time payments or default on your loan, your credit score and credit history can be negatively impacted. They will also impact your debt-to-income and debt-to-credit ratios.

Private student loans are not backed by the government, so if you default on a loan your loan servicer or lender may sell your account to a collection agency. According to Experian, collections will appear on your credit report and are flagged as derogatory accounts.

It’s also best practice to be responsible for your monthly payments. Any missed payments are reported as delinquencies to the credit bureaus and remain on your credit report for up to seven years.

When do student loan payments resume?

The U.S. Department of Education extended the moratorium on federal student loan payments and interest through January 31, 2022. The final extension was announced in August 2021. Unfortunately, this rule is not applicable to private student loans.

What happens to student loans when you die?

If you have federal student loans, your loans will be discharged tax-free upon your death. The same rule applies to federal Parent PLUS loans.

Private loans, on the other hand, work differently. For instance, if your private loan originated before 2018, your lender may hold a cosigner or your estate responsible for any outstanding student loans.

Private student loan borrowers who originated loans after 2018 won’t run into the same problem, however. In 2018, Congress updated the Truth in Lending Act (TILA), which requires creditors and lenders to release co-signers and your estate from financial obligations related to student debt.

How do private student loans and federal student loans differ?

You apply for a federal student loan by submitting a FAFSA. Taking on a federal loan means you’re borrowing from the government. You apply for a private student loan through a bank, credit union, or online lender.
Federal student loans also have flat interest rates set by Congress, while the interest rate on a private student loan depends on your or your cosigner’s credit. Federal loans charge origination fees; private loans typically do not.

Federal student loans offer borrowers protections and alternative repayment options that private loans usually don’t, such as income-based repayment and forgiveness programs. The current interest-free loan forbearance does not include private student loans; any future forgiveness offer is unlikely to include them.

How do private student loans and federal student loans differ?

Compare offers from multiple lenders including banks, credit unions, online companies, and state-based lenders to find the lowest interest rate. Depending on the lender, you may be able to choose a fixed or a variable interest rate. A fixed-rate stays the same throughout the life of a loan. A variable rate may start out lower than a fixed rate but could increase or decrease over time depending on economic conditions.

Consider any borrower protections your private lender offers, including deferment and forbearance, as well as repayment options. You may also have the option to choose your loan term, which means you could pay off your loan faster and with less interest by making higher payments or pay lower amounts with more interest over a longer period of time.

Can I get a private student loan with bad credit?

You’ll have a hard time finding a private student loan from a bank, credit union, or online lender if you have bad credit. Federal student loans don’t require borrowers to demonstrate creditworthiness, so they’ll be your best option. If you’ve already hit your limit on federal loans, you may be able to get a private student loan if you apply with a co-signer who has solid credit — typically scores in the high 600s or better.

Will I need a co-signer for a private student loan?

If you have no income and either no credit or bad credit, you’ll need a co-signer to get a private student loan. Without bills in your name, such as a credit card, car loan, or utility, you have no way to demonstrate that you can pay bills on time. Your co-signer will need to have a steady income as well as good to excellent credit scores, typically at least in the high 600s. Signing with a co-signer means they’re on the hook for your loan bill if you can’t pay.
Some lenders offer loans exclusively for student borrowers that don’t take credit into consideration. Instead, these lenders look at the school you’re attending as well as your income and career potential to determine the amount you can borrow and at what rate.

How do I apply for a private student loan?

Each lender will have its own application requirements. You’ll usually need to provide documents that prove citizenship, identity, and income along with school attendance and cost information or a financial aid award letter from your college.

As part of underwriting, you or your co-signer will need to show you have a credit score in the high 600s or higher, as well as a cash flow to make loan payments. They’ll also look at your or your cosigner’s debt-to-income ratio to make sure you have the funds to pay a student loan bill in addition to any other bills in your name.

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