Thinking about going to college? Good for you! Whether you’re fresh out of high school or looking for a career change, college is a big decision. Of course, in addition to deciding your intended major you’ll also have to consider student loans.
The average graduate has upwards of $40,000 in student loan debt. It’s important that you consider all your options, including repayment terms, interest and the reputation of the lender. Ready to learn more? Here’s what you need to know about the best private student loans.
Why Private Student Loans?
Just about everyone who’s considered college is familiar with the government and public lenders. Most people are also familiar with grants and other allowances the government affords students. If you can, by all means apply for a grant! These do not need to be repaid, and in some cases may cover your full cost of tuition.
However, private loans certainly have their advantages. First, private student loans are much more relaxed on the ability to apply with a cosigner. This doesn’t have to be Mom or Dad. Your cosigner can be your spouse or partner, your sibling or even your boss if you want to go that route. Having a cosigner on your student loan application can greatly increase your odds of getting a favorable interest rate and repayment terms.
Another advantage to a private student loan is that there are no fees associated with the loan. This means less upfront cost, or less principal to accrue interest over the length of your loan agreement.
If you’re considering living off campus, a private student loan can help you in ways a government loan can’t. In fact, a student loan from a private lender can cover your living expenses for the duration of your college enrollment. Apartment rents, food and transportation can all be tied into your student loan.
Finally, sometimes timing is everything. It’s necessary to file a FAFSA by the deadline each year to get government loans and assistance. But sometimes attending college doesn’t happen that way. You may be up for a promotion but in need of a few courses. You may have been laid off, and now want to go back to school.
In short, it’s possibly you didn’t fill out the FAFSA. The good news is that a FAFSA isn’t necessary for private loans.
How to Find a Private Student Loan
The first thought most people have when searching for a private student loan is just to Google the term. Doing that will present you with dozens of options. But how do you know which is best? How do you know these companies are even legitimate?
Well, it’ll take a little digging, but all the information is there. First and foremost, never pay money upfront for a loan. You’ll have to submit an application, but never pay money to someone who’s telling you that it will improve your chances of being approved for a loan.
In some cases, there may be a fee for a loan. However, lenders will disclose this upfront, and will usually incorporate the fee into the terms of your loan agreement. That said, do be wary of this, as there are plenty of lenders that don’t require any fee at all.
Secondly, you’ll want to check the reputation of the company Look at Better Business Bureau reports, check reviews online and ask around. It may even benefit you to access the bulletin board or forum of the school you’re planning to attend. Often there are discussions of lenders and finances. Current students can be a good source of information.
Finally, check with two important resources: the schools financial aid office and your local bank. The financial aid and billing offices may be hesitant to provide you with specific lenders’ names, but they can certainly steer you in the right direction. And your local bank can help you apply for a loan if you’ve been a longstanding customer with a good history.
The Best Private Student Loans
Now you know – there are benefits to private lenders for college expenses. You also know that public sources like grants can be a great resource but also may not be possible to acquire. If you’ve decided that a private student loan is the way to go, check out this list of the best private student loans.
Please note that these lenders were included in the list due to reputation, loan repayment options and consumer reviews.
You may be surprised to see Sallie Mae on this list of the best private student loans. Many people believe Sallie Mae to be a government program. That’s not, in fact, the case. Sallie Mae issues private student loans with no disbursement fee and rates from 4% to 11.85%.
Your interest rates may be variable or fixed, and you can choose from several repayment options. Even better, if you’re able to pay off your loan early, there’s no penalty!
Sallie Mae offers specialized loans, too. Choose from MBA, Dental, Medical and more for even more flexibility in repayment and interest rates. Consumers who have used Sallie Mae give the customer service and the loans themselves excellent reviews.
Like Sallie Mae, Citizens Bank offers student loans with no origination fee and competitive interest rates. And, also similar to Sallie Mae, you can pay off our loan early, penalty-free.
Citizens Bank offers loans as small as $1,000 (think a semester at community college) and as high as $295,000 – talk with your loan officer to see which degrees qualify for which loan amounts. You can repay your loan with one of three options, either a 5, a 10 or a 15 year plan.
While you’re in school, you’ve also got options. You can pay your interest only, make full payments, or defer your loan repayment until after graduation.
There’s a pretty good chance you’ve never heard of College Ave. They’re not one of the biggest names in the student loan game, but they’re certainly one of the most flexible private student loan issuers.
When you’re approved with College Ave, you can choose a loan amount from $2,000 all the way up to the full cost of attendance at your school. Then, you can specify whether you’d like to repay over the course of 8, 10, 12 or 15 years.
Approval for a College Ave loan will assume that you’ve got good credit. If not, you can apply with a cosigner for better approval odds. You can be either an undergrad or a graduate student to take advantage of College Ave loans.
Still have some questions? We have many more guides to help you out. Checkout our guides to How to Pay Off Student Loans Fast, How to Save Money in College, Student Loan Debt Relief and Types of Student Loan.