Best Private Student Loans for College in 2025

What is a private student loan?

Private student loans originate with a bank, credit union or online lender — unlike federal student loans that are handled by the federal government.

You can use both federal and private loans to pay for school, but federal loans typically have more favorable terms, including lower interest rates, flexible repayment options and loan forgiveness. For those reasons, it’s best to prioritize federal student loans before private loans.

Private student loans can be a good option if:

• You have already completed the Free Application for Federal Student Aid, or FAFSA, to see if you’re eligible for federal grants and work-study programs.

• You have already borrowed the maximum in both subsidized and unsubsidized federal student loans.

• You or a co-signer have good credit (a credit score of 690 or above). Many private student loan borrowers apply with a co-signer to improve their chances of qualifying.

• You borrow only what you need and expect you can repay.

Types of private student loans:

How do private student loans and federal student loans differ?

Federal and private student loans vary in interest types, fees and borrower protections, and there are pros and cons to each type of loan.

Federal student loans:

• Are offered by the federal government. Students apply by submitting the FAFSA.

• Have fixed interest rates that don't change over the life of the loan.

• Charge origination fees.

• Come with protections like income-driven repayment and Public Service Loan Forgiveness.

Private student loans:

• Are offered by banks, credit unions and online lenders.

• Have fixed or variable rates based on borrowers' creditworthiness.

• Typically do not charge origination fees.

• Do not have the same protections as federal student loans.

» MORE: Federal vs. private student loans: Pros and cons

How much can I borrow for college?

Only borrow what you need and can expect to pay back. Start with federal loans, and take private loans if you need additional funds to pay for college.

The maximum in federal student loans you can borrow depends on your year in school, whether you’re a dependent or independent student and the type of loan. With private loans, the amount you borrow can’t exceed your school’s total cost of attendance, less other financial aid.

A 2024 high school graduate who will depend on student loans to pay for college can expect to borrow about $37,000 for their bachelor’s degree, according to a recent NerdWallet analysis.

» MORE: Student loan maximums for federal and private loans

How do I choose a private student loan online?

1. Compare loan offers

Check options from multiple lenders including banks, credit unions, online companies and state-based lenders to find the lowest interest rate.

2. Decide on fixed or variable 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.

3. Choose a loan term

You may also have the option to choose your loan term. A short term gives you higher monthly payments, but also faster repayment and less total interest. A longer term allows you to pay less each month, but more interest over a longer period of time.

4. Consider borrower protections

A private lender may offer deferment, forbearance or another temporary repayment adjustment if you can’t afford your payments.

» MORE: How to get a student loan

Will I qualify for a private student loan?

Each lender has its own qualification requirements. Credit score and income are key considerations for most student loans. Borrowers with higher credit scores and incomes tend to get the best rates and highest loan amounts.

Since undergraduate borrowers are unlikely to have established credit or income, lenders will usually prompt students to apply with a co-signer. Some lenders who offer loans for borrowers without a co-signer will consider academic performance and income potential.

Lenders will often require you to attend a Title IV school, which means your school processes federal student aid. Some lenders don't offer loans in certain states.

» MORE: Student loan calculator

Can I get a private student loan with bad credit?

You’ll have a harder 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 have bad credit. 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.

» MORE: Student loans for borrowers with bad or no credit

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

If you have no income and 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, it's hard to demonstrate that you can pay bills on time. Your co-signer will need a steady income and good credit scores. A co-signer is responsible for repaying the loan if you fail to make payments.

Some private lenders will let students apply without a co-signer. Instead of basing your loan offer on your credit, they look at your academic performance and earning potential to determine your ability to pay back the debt.

» MORE: How to get a student loan without co-signer

How do I apply for a private student loan?

Follow these steps to apply for a private student loan.

1. Find a lender.

Check your local banks, credit unions and state-based agencies to find private student loans. Online lenders also offer private loans, though be sure to review the fine print for a thorough understanding of interest type (fixed or variable), rates and fees.

2. Know the requirements.

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

You or your co-signer will need to have credits scores in the high 600s or higher, as well as cash flow to make loan payments. Lenders will also look at your or your co-signer’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.

3. Compare lenders before applying.

Shop around to gather and compare data on interest rates, repayment terms and co-signer requirements from multiple lenders before deciding on one. It may be helpful to read online reviews of lenders to gain insight from other consumers’ experiences.

How do student loan interest rates work?

Learn more about how student loan interest rates are determined, including a history of rate changes through the years. Private student loan interest rates can sometimes be lower than federal rates, but approval for the lowest rates requires excellent credit. If you have good credit, you may be able to refinance existing student loans to get a lower rate.

STUDENT LOAN RATINGS METHODOLOGY

Our survey of more than 26 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.

We consider 40 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.

The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.