A college education can be expensive no matter how spin it. Most of us need to take out a loan to fund part or all of our education.
While federal loans are usually the go-to, you may have to take out private loans as well. Check out Benzinga’s list of the best student loans to find vetted lenders and loan comparison services.
Federal Loans vs. Private Student Loans
Federal student loans and private student loans differ in several ways. Federal loans originate with the federal government while private loans come from private institutions like banks. Federal student loans usually have low, fixed rates, while private student loans have fixed or variable rates that are usually higher.
Federal student loans usually offer income-based repayment plans and deferment periods. Private student lenders usually have set monthly payments determined by the amount of the loan, and you have to start repaying them right away.
Another major difference is that you don’t need a credit check for most federal student loans. With private loans, you’ll need decent credit or a cosigner. You can find a comprehensive list of all the similarities and differences listed on StudentAid.gov.
Best Student Loan Lenders
Lenders and loan comparison services make it easy to find a private student loan online. Benzinga did the heavy lifting and compiled this list of the best places to start your search.
Best for Financial Literacy Tools: Student Loan Hero
Student Loan Hero provides student loans, loan refinancing, personal loans and bad credit loans. You’ll be able to shop loans from multiple lenders once you enter your prospective school.
Comparing multiple lenders is the best way to find your best offer. Terms and rates differ depending on lenders and your credit history. Applying for a cosigner will also increase your options. If you have good credit, you should be fine, though some lenders offer loans for borrowers with bad credit too.
Cosigning on a loan is a big ask and most people have some reservations about it. If you default, the consequences could fall on your cosigner.
A benefit of Student Loan Hero is some of their lenders offer cosigner release loans. Loans of this nature start off with a cosigner, but if you meet all the terms within a given period of time and prove you’re a trustworthy credit user, your cosigner will be released from the loan.
Student Loan Hero has useful financial literacy tools. You can construct a debt repayment plan using one of their many repayment scenario calculators. It also shows you tricks to spend less money on your loan. A good understanding of the financial obligation you’re taking on will help you pay off your student loans to save you more money in the long run.
Best for Loan Comparison: Credible
Credible is a leader among multiple loan comparison services. Credible provides student loan offers and more. You’ll find personal loans, mortgages, refinancing and credit cards.
There are over 2,200 educational institutions that work with lenders on Credible. Credible is free to use, and connecting with lenders takes less than 3 minutes. You’ll see your prequalified loans and personalized terms and rates. Accessing your prequalified offers doesn’t affect your credit, so comparing rates is a safe way to find your best deal.
A cosigner will greatly increase your chances of finding a loan on Credible. You’ll need a solid credit history to qualify for a loan with Credible partners. Every lender with Credible offers fee-free loans.
Credible has a very helpful Client Success Team. It will see you through the entire loan process to the end. You can get in touch with the chat feature whenever you’re ready to start comparing loans.
Best for Member Benefits: SoFi
SoFi offers much in the way of modern digital finance. It considers its customers members and empowers them to reach financial independence and security.
It offers innovative financial products such as loans, investments, insurance, financing and money-tracking and analyzing tools.
Your SoFi membership comes with major benefits. You’ll have access to career coaching, financial planning, referral bonuses, estate planning, merchant discounts, discounts on SAT and ACT prep courses and more. SoFi membership automatically signs you up for a complimentary subscription to Edmit Plus, a platform that assists in all facets of college financial planning.
You can see your rates without damaging your credit score. There are a few types of private student loans from SoFi. It offers undergraduate and parent loans along with MBA and law school loans.
Applying for a loan once you’re prequalified is easy. SoFi’s private student loans are fee-free. Unlike some private loan lenders, SoFi offers multiple repayment options. You can also expect competitive rates and flexible terms.
Best for Future-Income Based Loans: Ascent
Ascent is private student loan services that provide lifelines to those lacking appropriate credit, even without a cosigner. You have 2 options if this describes you: credit-based loans and future-income based loans.
Ascent considers applications for its credit-based loan on an individual basis rather than setting rigid standards. If you don’t meet certain standards, like income requirements, you may be eligible for a future-income based loan from Ascent. It also offers cosigner release loans.
The future-income based loan is restricted to students in their junior or senior year of college with at least a 2.9 GPA. If you don’t quite meet minimum income or DTI standards, you may still qualify for a loan by making up for it in another area that demonstrates creditworthiness. This may include your projected future income.
Because Ascent wants you to think of your loan as a financial investment into your future, it builds financial literacy education into the application process. Ascent believes that it is important to weigh the risk versus the reward for borrowing to pay for your education.
How to Get a Federal Student Loan
Applying for a federal student loan is fairly easy, so don’t be intimidated. The process begins with the Free Application for Federal Student Aid (FAFSA) form. Your aid will be determined by the questions on this form along with your dependency status and financial need.
If you are eligible for aid, you’ll receive instructions on how to accept it. This includes finishing an entrance counseling session along with signing and master promissory notes agreeing to the loan terms.
Undergraduate students can receive up to $12,500 per year in federal student loans. Graduate students are eligible for up to $20,000 per year.
Qualifying for a Private Student Loan
Different lenders hold different minimum standards for borrowers. But the following requirements are likely to be the basis of any set of standards:
- Age 18 or over with a diploma or equivalent certificate
- Acceptable credit or cosigner with acceptable credit
- Proof that you have enough income to pay back the loan
- Enrollment in a qualified higher education program
You’ll usually see lender-specific standards when you look for loans through a lender comparison service. Or visit 1 of our lender’s websites to find out the borrower requirements..
Get Stress-Free Funding with a Private Student Loan
If you max out federal aid or need extra money to make ends meet while in school, a private student can be your cushion. Use 1 of our trustworthy lenders or loan comparison services to find the funding you need today.