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Licensed auto and home insurance agent
4+ years of experience in insurance and personal finance editing
NPN: 20564519
Updated
When federal aid, grants, and scholarships can’t cover all your higher education costs, private student loans can help bridge the gap.
Banks, credit unions, and online lenders offer private loans in a range of interest rates, term lengths, and repayment options, all of which determine the loan’s total cost and ease of repayment. Your credit score plays a big role in your approval chances, and you may need a cosigner with good credit to help you qualify for a private student loan.
Before applying for a private student loan, first exhaust federal student aid, which offers better borrower protections. And consider paying some costs up front if you’re able. That will reduce your overall costs.
This guide explains how private student loans work, how to qualify, and how to compare options to find the best fit.
Private student loans come from banks, credit unions, and online lenders, and they typically require credit approval.
Interest rates vary widely for private student loans — roughly 2.69%–17.95% APR in 2026. Factors like credit score, income, and cosigners can significantly affect the rate you receive.
Private student loans can help cover funding gaps after federal aid and scholarships, but they generally offer fewer protections and repayment options than federal student loans.
We researched the best student loan providers to understand their interest rates, repayment flexibility, borrower protections, eligibility requirements, and customer satisfaction. The lenders below stand out for their abilities to meet the needs of common borrower profiles.
With low rates and no origination fees, College Ave offers a strong option for borrowers looking for the lowest possible cost. College Ave loan amounts range between $1,000 and $150,000 for most degree programs. Borrowers can choose repayment terms of up to 15 years. But keep in mind that shorter terms result in lower overall costs.
Citizens Bank offers strong rates with minimum loans of $1,000 and maximum lending up to the full cost of attendance at your accredited school. You can choose repayment options of five to 20 years for maximum flexibility. Citizens offers both fixed and variable rates, plus cosigner release options.
Earnest offers very high loan amounts (up to $500,000, depending on the program), which may be useful to graduate students with higher costs. The lender also allows borrowers to choose payment terms between five and 20 years, making it easier to adjust the loan to expected incomes after graduation.
Ascent offers competitive interest rates, with fixed and variable options. Parent borrowers can find a range of funding options, including repayment lengths of five to 15 years. This lender doesn’t charge origination fees and will reduce your interest rate by 1% if you enroll in auto pay.
SoFi offers different types of repayment options for borrowers, including deferred payments, interest-only partial payments (fixed amount), and immediate repayment. It also offers graduated repayments with SmartStart, which allows for interest-only payments for the first nine months. Borrowers can also extend repayment to 25 years with an extended repayment plan.
To choose the best private student loan lenders, we researched more than a dozen top lenders. We compared APR ranges to evaluate affordability, and loan limits to determine utility for both graduate and undergraduate borrowers.
We also considered repayment flexibility, fees, and whether lenders make cosigner release available. Lastly, we reviewed fee structures to help us better understand the potential overall cost of a loan from each private student loan lender.
Find terms, loan amounts, and interest rates to fit your needs
The following table shows rates and more from top private student loan lenders. Rates were current as of June 30, 2026.
Lender | Fixed APR Range | Variable APR Range | Loan Amounts | Repayment Terms | Co-signer Release | Fees | Trustpilot Rating |
|---|---|---|---|---|---|---|---|
| Ascent | 2.69%–16.86% | 3.66%–16.06% | $2,001–$400,000 | 60–240 months | Yes | None | 4.6 |
| Citizens Bank | 3.24%–13.41% | 4.91%–13.04% | $1,000–100% of the school’s cost of attendance | 60–240 months | Yes | None | N/A |
| College Ave | 2.49%–17.99% | 3.89%–17.99% | $1,000–$150,000 | 60–180 months | Yes | None | 4.5 |
| Earnest | 2.79%–16.74% | 5.24%–17.10% | $5,000–$500,000 | 60–240 months | No | None | 4.6 |
| Education Loan Finance | 4.29% and up | 4.74% and up | $15,000–$500,000 | 60–240 months | No | None | 4.9 |
| Nelnet Bank | 6.62%–9.99% | 6.62%–10.32% | $1,000–$500,000 | 60–180 months | Yes | None | 1.4 |
| LendKey | 4.39%–9.24% | 3.43%–16.08% | $5,000–$300,000 | 60–240 months | Depends on the lender | None from LendKey, but the lender may charge fees. | 4.3 |
| Splash | 3.99%–10.24% | 4.74%–10.24% | $5,000–$100,000 | 24–84 months | Depends on the lending partner. | Depends on the lending partner. | 4.9 |
| SoFi | 2.98%–15.99% | 4.39%–15.99% | $5,000–$100,000 | 60–240 months | No | None | 4.1 |
Private student loans are education loans that don’t come from the federal government. Private lenders like banks, credit unions, or online lenders offer these loans. They’re sometimes called personal student loans, and they’re not offered as part of the federal student loan program.[1]
That means they lack the borrower safeguards and flexibility of federal loans, so it’s important to consider them carefully. Unlike federal loans, private student loans can have variable interest rates, which means your rate can change over time. Private loans might also lack forbearance options, which allow you to postpone payments for a set period of time.
You’ll need to meet income and credit requirements to qualify for a private student loan. Applying with a cosigner can often result in a better interest rate or more favorable loan terms.[2] If you’re considering applying with a cosigner, research which private student loan lenders allow you to release a cosigner without refinancing.
Release transfers 100% of repayment responsibility to you, as the primary borrower, and removes your cosigner. It’s usually cheaper and easier to release a cosigner than it is to refinance your current student loan into a new one without a cosigner.
While private loans can offer more flexibility than federal loans, they lack many protections. Here’s an overview of the pros and cons.
Higher borrowing limits compared to federal student loans.
Potentially lower interest rates for borrowers with strong credit.
Some flexible repayment options.
Potentially quicker processing, as short as a few days, depending on the lender.
May require immediate repayments.
Interest rates can be higher if you have poor or no credit history.
Often lack loan forgiveness, forbearance, and, sometimes, postponement options.
May have prepayment penalties, which federal loans lack.
College is expensive, and it’s possible you’ll need more funds after maxing out all available scholarships, grants, and federal student loans. Once you’ve exhausted these funding avenues, private loans can make sense. Just remember that private lending should supplement federal loans and other funding vehicles.
Private student loans may make sense for you in these scenarios:
You’ve exhausted all other funding sources, but haven’t fully covered the cost of school.
You can qualify for a much lower interest rate by choosing a private loan.
You don’t qualify for additional federal aid, scholarships, or grants.
You’re refinancing or consolidating existing private student loans for a much lower interest rate.
Be sure to evaluate your monthly payments against your expected post-graduation income to ensure you can cover repayment.
Comparing loans from multiple lenders can help you find the best fit
Federal student loans come with standardized rates and flexible repayment options. Both subsidized (the federal government pays the interest until you graduate) and unsubsidized federal student loans are available.[3]
Private student loans sometimes have lower rates for borrowers with strong credit, but lack the protections of federal lending. And private student loans may have less flexible repayment terms than federal loans do.
Here’s an overview of how public and private loans compare.
Public Loans | Private Loans | |
|---|---|---|
| Interest rates | Fixed, usually lower rates. | Fixed and variable, usually higher rates. |
| Credit requirements | You don’t need established credit for approval. | Usually requires an established credit history or a cosigner with strong credit. |
| Repayment options | More options for reducing or pausing repayments and deferment. | Fewer options for pausing or reducing payments, and often no deferment. |
| Borrower protections | Many, including temporary reduction or postponement of repayment. | No legal mandate requires private lenders to offer relief. |
| Loan limits | $5,500–$7,500 annually. | Typically $100,000–$500,000. |
| Application process | Submit a FAFSA, and you’ll be offered a federal student loan if eligible. | Requires application directly with the lender. |
| Fees | Usually origination fees but no prepayment fees. | Sometimes origination fees and sometimes prepayment fees. Varies by lender. |
| Forgiveness | Available for eligible borrowers. | Not usually. |
| Subsidized interest | Subsidized and unsubsidized. | No. |
| Death/disability discharge | Yes. | Yes. |
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Interest is the cost of borrowing money, and it ultimately determines the cost of your loan. It’s a percentage tied to the principal balance of your loan, and it typically accrues daily. One part of your payment goes towards interest, and the remainder reduces the remaining principal.
Private lenders usually offer variable and fixed interest rates. A fixed rate stays the same for the life of the loan unless you refinance. Variable rates can change over time, usually in connection with national rates set by the government.
The average private loan interest rate falls between 2.84% and 17.95% APR, as of February 2026. Many lenders offer discounted interest for automatic payments, and even a small difference in interest can result in big differences in overall costs. For example, a $40,000 loan on a 10-year term at 6% costs about $13,300 in total interest, while 7% costs roughly $15,900.
Lenders typically require private student loan borrowers to meet minimum credit requirements, make a steady income, and enroll in an eligible degree program.
Common eligibility requirements include:
Credit minimum: Many lenders require borrowers to have sufficient credit for lending or to work with a cosigner with good credit.
Enrollment: Lenders require borrowers to be enrolled in an approved educational program, usually at least half-time, to qualify.
Attending an eligible school: Most lenders require enrollment at an accredited college or university.
Income: Lenders require proof that you or your cosigner can repay the loan.
Debt-to-income ratio: Lenders evaluate your other debt payments to ensure you can afford repayment.
Students with poor or insufficient credit history typically apply with a cosigner to qualify for loans or better interest rates.
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How much you can borrow with private student loans depends on the lender. Most private loans range from $1,000 to $100,000 or more. But, lenders won’t exceed the cost of attendance (minus financial aid).
Several factors can influence your borrowing limit, such as:
Your school’s cost of attendance.
Other financial aid received.
Your credit history.
Your cosigner’s credit history.
Your income and debt-to-income ratio.
The lender’s loan limits.
Some lenders offer multi-year approval, allowing you to qualify once without resubmitting your loan application every year.
Whatever the maximum limit, it’s best to only request what you need.
Before signing your loan paperwork, you need to find the best loan that fits your needs, budget, and long-term plans. Here’s how to apply for a private student loan.
Exhaust federal aid first: Complete your FAFSA to see if you qualify for federal grants, loans, or scholarships. You should only consider private student loans if your total federal loans and grants, scholarships, and other types of aid fall short of your total cost of attendance.
Compare private lenders: Review interest rates, repayment terms, fees, cosigner release policies, and customer reviews from multiple vendors.
Check eligibility: Most lenders will evaluate your credit, income, enrollment, and cost of attendance to determine your eligibility. You may need a cosigner to improve approval chances and loan terms.
Complete the application: Submit a complete application and supporting documentation.
Review and sign the loan agreement: Carefully review the loan paperwork to verify the interest rate, repayment options, and fees before signing. Ask questions if anything is unclear.
Finding a lower-interest-rate private student loan could help you save
You can use several strategies to improve eligibility, get a lower rate, and secure more favorable loan terms, including:
Work with a cosigner with strong credit.
Choose a fixed rate to keep costs stable even when rates change.
Improve your credit by paying on time and reducing outstanding debt balances.
Choose a shorter loan term to pay less interest overall and potentially lower interest rates.
Sign up for auto pay, which often receives a 0.25% or better interest rate reduction.
Borrow only what you need to keep balances manageable.
Compare interest rates and loan terms across several lenders.
Private student loans vary significantly by interest rate, lending terms, and lending policies. The answers to common questions borrowers ask can help you better understand how private education loans work and how to work them to your advantage.
Neither lender is universally better for every borrower, so the answer depends on your needs and financial situation. Both work well with undergraduate and graduate borrowers. Sallie Mae offers cosigner release, while Earnest doesn’t. You should compare both to other student loan options like Ascent, College Ave, and LendKey.
The best lender depends on your credit, school costs, and repayment needs. Some borrowers prioritize the interest rate, while others want flexible payment options, cosigner release options, and a highly rated customer service team.
That depends on the interest rate and length of the loan. A 10-year loan at 4% interest will cost around $1,012 per month, while a 20-year loan at 8% interest will cost about $836 per month. The first loan will cost $121,494 over its lifetime, while the second will cost $200,746.
Private student loans can help fill funding gaps left over by your scholarships, grants, and federal loans. They make sense if the funding will lead to work that allows you to pay off loans and prosper. That said, sometimes attending a less-expensive school is a better option.
A good rate depends on current market conditions and your credit history. In 2026, many lenders advertise rates as low as 3%–4% for qualified borrowers, but applicants with poor or limited credit history will likely see higher rates.
Yes, most lenders want to see a strong credit history for private student loans, either from the borrower or their cosigner. The better your credit history, the lower your rate as well.
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Licensed auto and home insurance agent
4+ years of experience in insurance and personal finance editing
NPN: 20564519
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