5 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 five options we’ve listed to find the best lender for you.

Private student loan options

LenderAPR ranges*Borrower
Nerd review

5.50% to 9.67%

3.05% to 8.94%
Payment deferral while in school.

Financial hardship forbearance.
CommonBond review

Discover logo

6.24% to 12.99%

3.87% to 11.12%

Payment deferral while in school.

Financial hardship forbearance.

Option to temporarily reduce monthly payments.
Discover review
Ascent logo

4.87% to 14.35%

3.47% to 12.71%

*includes Ascent Independent non-cosigned rates
Payment deferral or interest-only payments while in school.

Financial hardship forbearance.

Ascent review
Citizens Bank logo

5.25% to 11.95%

3.97% to 10.67%
Payment deferral or interest-only payments while in school.Citizens Bank review
Sallie logo

5.74% to 12.87

3.12% to 12.50%
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.