6 Best Private Student Loan Options in 2017

Loans, Student Loans

When paying for college, exhaust all your other options — scholarships, grants, work-study and federal student loans by filling out the FAFSA — before turning to private student loans.

Federal student loans offer borrower protections that private loans may not, such as income-based repayment plans and forgiveness programs. And federal student loans have flat interest rates set by Congress, while private student loan interest rates depend on your credit. If you or your co-signer don’t have good credit, you’ll likely pay a higher interest rate for a private loan than you would for a federal loan.

Still, you might need to take out private student loans if you can’t cover your college costs with savings, income, grants, scholarships and federal student loans. Learn more about whether private loans are right for you below.

If you do need to take out private student loans, check out the options we’ve listed to find the best lender for you.

Private student loan options

LenderAPR ranges*Types of loansBorrower
protections
Nerd review


Fixed:
4.75%-11.50%3

Variable:
3.00%-10.05%4
Undergraduate
Graduate
Payment deferral or interest payments while in school.5

Financial hardship forbearance.6

Option to temporarily reduce monthly payments.7

SunTrust review
Ascent logo

Fixed
5.13% to 14.57%8

Variable
3.49% to 12.74%8

*includes Ascent Independent non-cosigned rates
Undergraduate
Graduate
Independent (non-cosigned loan)
Payment deferral or interest-only payments while in school.

Financial hardship forbearance.

Ascent review
SoFi logo

Fixed
4.25% APR to 8.00%

Variable
3.69% to 7.12%
ParentNo payment deferral available (repayment begins immediately)SoFi review
CommonBond

Fixed:
5.38% to 9.67%

Variable:
3.08% to 8.96%
Undergraduate
Graduate
Payment deferral while in school.

Financial hardship forbearance.
CommonBond review

Discover logo

Fixed:
6.24% to 12.99%

Variable:
3.87% to 11.12%

Undergraduate
Graduate
Parent
Payment deferral while in school.

Financial hardship forbearance.

Option to temporarily reduce monthly payments.
Discover review
Sallie logo

Fixed:
5.74% to 12.87

Variable:
3.25% to 12.62%
Undergraduate
Graduate
Payment deferral or interest-only payments while in school.

Option to make interest-only payments for the first 12 months after your grace period.

Financial hardship forbearance.
Sallie Mae review

Is a private student loan right for you?

Before you apply for a private student loan, fill out the Free Application for Federal Student Aid, known as the FAFSA, to see if you’re eligible for federal grants, loans and work-study programs. All students, regardless of financial need, are eligible for unsubsidized federal student loans.

Federal student loan limits vary based on whether you’re an independent or dependent student; the type of degree you’re pursuing (undergraduate or graduate); and, for undergraduates, your year in school. If you borrow the maximum amount of federal student loans and still don’t have enough to cover your costs, you may have to take out private loans.

How to choose a private student loan

Various banks and online lenders offer private student loans. Before choosing one, compare your options to find the lowest interest rate. With private loans, you can choose a fixed interest rate, which will stay the same throughout the life of the loan, or a variable interest rate, which may start out lower than a fixed rate, but could increase or decrease as economic conditions change. It’s also worth looking at the borrower protections that private lenders offer, such as flexible repayment plans or the option to defer your payments if you hit a rough patch.

Private student loan repayment options

Private student loans don’t tend to come with as robust of repayment options as federal loans do, but there are a few options to help ease your debt.

  • Contact your lender to discuss your options. This is the best thing you can do if you’re struggling to make your monthly payments. Your lender may be willing to offer you flexible repayment options, such as a loan modification, or offer you deferment or forbearance.
  • Refinance your student loansIf you have good credit and a stable income, you may be able to get a lower interest rate through student loan refinancing.

Lender disclosures

1. CommonBond – Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.99% as of May 10, 2017.


2. Sallie Mae – Interest rates for Fixed and Deferred Repayment Options are higher than interest rates for the Interest Repayment Option. You’re charged interest starting at disbursement, while in school and during your six-month separation or grace period. When you enter principal and interest repayment, Unpaid Interest will be added to your loan’s Current Principal. Variable rates may increase over the life of the loan. Advertised APRs assume a $10,000 loan to a freshman with no other Sallie Mae loans. LIBOR is the 1-month London Interbank Offered Rate rounded up to the nearest one-eighth of one percent. Either the borrower or cosigner (not both) must enroll in auto debit through Sallie Mae. The rate reduction benefit applies only during active repayment for as long as the Current Amount Due is successfully deducted from the designated bank account each month and is suspended during forbearances and certain deferments.


3. SunTrust Bank – Current fixed interest rates depend on (a) the student’s and cosigner’s (if applicable) credit histories, (b) the repayment option and loan term selected, and (c) the requested loan amount and other information provided on the online loan application. If approved, applicants will be notified of the rate qualified for within the stated range. The fixed rate assigned to a loan will never change except as required by law or if you request and qualify for the ACH interest rate reduction benefit(s); ACH interest rate reduction(s) apply when full payments (including both principal and interest) are automatically drafted from a bank account and will remain on the account unless (1) the automatic deduction of payments is stopped (including times during deferment or forbearance) or (2) there are three automatic deductions returned for insufficient funds within the life of the loan. Rates and terms effective for applications received on or after 8/1/2017.


4. SunTrust Bank – The variable interest rate for each calendar month is calculated by adding the current One-month LIBOR index (captured on the 25th day, or the next business day thereafter, of the month immediately preceding such calendar month and rounded up to the nearest 1/8th of one percent) to your margin. The current One-month LIBOR index is 1.250% on 7/1/2017. LIBOR stands for London Interbank Offered Rate. The One-month LIBOR is published in the “Money Rates” section of the Wall Street Journal (Eastern Edition). The interest rate will be determined after you apply. The variable interest rate and Annual Percentage Rate (APR) depend upon (a) the student’s and cosigner’s (if applicable) credit histories, (b) the repayment option and loan term selected, and (c) the requested loan amount and other information provided on the online loan application. If approved, applicants will be notified of the rate qualified for within the stated range. The variable interest rate will increase or decrease if the One-month LIBOR index changes. Rates and terms effective for applications received on or after 8/1/2017.


5. SunTrust Bank – Any applicant who applies for the loan the month of, the month prior to, or the month after their graduation date, as stated on the application or certified by the school, will only be offered the immediate repayment option. Partial Interest Repayment is available on loans of $5,000 or more. The initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date and requires the student to be enrolled at least half-time at an approved school or in a grace period. Any accrued and unpaid interest will be capitalized (added to your principal loan balance) when repayment of principal and interest begins.


6. SunTrust Bank – Hardship forbearance is granted in increments of no more than three months, for a maximum period of 12 months. During a hardship forbearance period, principal and interest payments are deferred and the interest that accrues during such hardship forbearance period is capitalized at the expiration of such hardship forbearance period.


7. SunTrust Bank – Borrowers who are experiencing difficulty making principal and interest payments may be eligible for up to 36 months of interest only payments. After the borrower resumes regular principal and interest payments, the monthly payment will be recalculated so that the borrower can pay the outstanding balance over the number of months remaining in the repayment term. The recalculated monthly payment amount will typically increase following the period of interest only payments.


8. For Ascent terms and conditions, please visit: Ascent. Ascent rates are effective as of 10/02/2017. The current LIBOR is 1.236%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes. Competitive rates calculated monthly at the time of loan approval. Ascent Independent non-cosigned loan: Variable rate loans are based on a margin between 2.75% and 12.25% plus the 1-Month London Interbank Offered Rate (LIBOR), rounded to the nearest 1/100th of a percent, resulting in an APR range between 3.99% and 12.74%. Fixed rate loans have an APR range between 5.44% and 14.41%. Click here for Ascent Independent non-cosigned loan current rates and repayment examples. Ascent Tuition cosigned loan: Variable rate loans are based on a margin between 2.25% and 9.00% plus the 1-Month London Interbank Offered Rate (LIBOR) rounded to the nearest 1/100th of a percent resulting in an APR range between 3.49% and 9.74%. Fixed rate loans have an APR range between 4.94% and 11.41%. Click here for Ascent Tuition cosigned loan current rates and repayment examples.