Best private student loans
Personal loan lenders at a glance
Best for international students
| Loan amounts | Minimum: $2,001 Maximum: Up to 100% cost of attendance ($200,000 aggregate) |
| Variable APR | 6.01% to 15.32% with autopay discount |
| Fixed APR | 4.62% to 15.43% with autopay discount |
| Terms | 5, 7, 10, 12, 15 years |
| Origination fee | None |
| Min. credit score | Varies |
| Pros | Cons |
|---|---|
|
1% cash back graduation reward (if all terms are met) Access to the Ascent Scholarship Giveaway Program Earn up to $525 for each friend you refer |
International students must use a U.S. cosigner Credit score requirements not specified International students don’t qualify for the non-cosigned, outcomes-based loan. |
Undergraduate students can borrow up to 100% of their school’s cost of attendance ($200,000 aggregate) after other financial aid, with graduate student loans going up to $400,000. You can opt for up to nine months of deferred repayment after graduation — though interest will accrue during the deferment.
You may also be able to access a personal loan for non-U.S. citizens to cover non-educational-related expenses.
Best for same day credit approval
| APR range | 7.99% - 35.99% |
| Loan amounts | $5,000 - $50,000 |
| Term (months) | 24 to 60 |
| Origination fee | 1.99% - 6.99% |
| Min. credit score | 620 |
| Pros | Cons |
|---|---|
|
Competitive interest rates (7.99% - 35.99%) Same-day credit approval Offers multiple interest rate discount options |
High minimum borrowing amount of $5,000 May take up to 72 hours to receive funds after approval Charges origination fee of 1.99% - 6.99% |
The latest on private student loan interest rates
Student loan interest rates can fluctuate based on market conditions and inflation. The government determines the interest rate for federal student loans each year, based on the bond market. In contrast, private lenders can set whatever rate they want — although they typically remain competitive with the overall student loan environment.
When the cost of living increases, student loan rates tend to follow. With federal rates on the rise,some highly-rated student loan companies have also increased their rates.
It’s crucial to shop around to secure the most competitive rate between private student loan lenders. Keep up with your bills and maintain low credit card balances to increase your credit score, which can help unlock lower interest rates.
Private vs. Federal loans
| Private student loans | Federal student loans | |
|---|---|---|
| Credit check | Required for most lenders | Not required, but a credit history review is needed for grad PLUS and parent PLUS loans |
| Cosigner | 92% of undergraduates used a cosigner during the 2021-2022 academic year, our data says, although not all lenders require one | Not always required, though you could need an "endorser" for parent or grad PLUS loans |
| Interest rates | Fixed and variable APRs (depending on your creditworthiness) Range of rates from our featured lenders: Variable: 3.99% to 16.72% Fixed: 3.99% to 15.99% |
Fixed rates set by the Department of Education (plus origination fees) Rates for 2022/2023 school year: Undergraduate: 4.99% Graduate: 6.54% PLUS: 7.54% |
| Origination fee | Not typically charged by top-rated lenders | Fees for loans issued between Oct. 2020 to Oct. 2023: Direct subsidized and unsubsidized loans: 1.057% Direct PLUS loans: 4.228% |
| Annual borrowing limit | Up to 100% of cost of attendance | $5,500 to $12,500 (for undergraduates) |
| Repayment flexibility | In-school deferment and short-term economic hardship forbearance could be available (a few lenders offer unemployment protection and income-based repayment plans) | Change repayment plans at any time Variety of deferment and forbearance options Income-driven repayment plans available |
| Forgiveness programs | Not usually offered by lenders, though state and employer-run loan repayment assistance programs could be helpful | Many federal student loan forgiveness programs are available, plus additional ways to discharge your debt |
Private student loans
Student loan companies set their interest rates, often giving you a choice between a fixed or variable rate. Private lenders examine your financial credentials, such as your credit score and annual income. You might need to apply with a cosigner if you can’t qualify independently.
Borrowers generally have more flexibility with private student loans. Instead of being assigned a fixed-rate federal loan with a standard 10-year term, you might opt for a variable rate and a shorter or longer repayment plan.
Private education debt comes with a higher borrowing limit, allowing you to cover any gaps in your school’s cost of attendance. That said, it’s wise to only borrow what you need — and what you can afford to repay. Estimate your potential monthly dues using today’s rates and a student loan repayment calculator.
Federal student loans
The Department of Education issues federal student loans, with Congress determining the fixed interest rate each year. You won’t need to pass a credit check to qualify for most federal student loans, although PLUS loans require a review of your credit report to look for adverse credit history.
Federal loans are also eligible for a variety of repayment plans, such as income-driven repayment, deferment and forbearance, and various student loan forgiveness programs. However, you can’t borrow an infinite amount of federal loans — once you reach the federal student loan limit, you’ll need to consider additional ways to cover any remaining expenses.
How to maximize federal and free financial aid
Because federal student loans carry such wide-ranging repayment flexibility, it’s recommended to max out your federal loan allotment before resorting to a private student loan.
The Free Application for Federal Student Aid (FAFSA) is the gateway to federal loans and other aid programs. After completing the FAFSA, you’ll be eligible to accept loans offered by your school — but only up to the annual limit. Be sure to look for work-study opportunities and other grants listed on your financial aid award letter.
How do private student loans work?
For private student loans, you typically shop around with banks, credit unions and online lenders to find the best overall loan offer. Unlike federal loans, private loans are credit-based, so your eligibility and terms depend on your credit history. If you’re a student with a thin or poor credit file, you could improve your application by adding a creditworthy cosigner.
Once you’ve gained approval, your lender will certify the funding amount with your college or university. You may be allowed to borrow up to 100% of your cost of attendance minus other financial aid you expect to receive. The funds are usually disbursed directly to the school, with any excess amount credited to you later.
Your private lender may have a loan servicer that manages the repayment of your debt. Keep in mind that private loans have fewer safeguards if you run into trouble after leaving school, so consider them as a supplement to federal loans, rather than a substitute.
Pros and cons of private student loans
Private student loans can help with additional expenses not covered by financial aid. However, it’s worth weighing the pros and cons before taking on more debt.
| Pros | Cons |
|---|---|
|
Borrowers with robust credit might find rates lower than the standard federal rate Higher loan amounts — typically up to 100% of the cost of attendance Access to variable interest rates Often doesn’t include an origination fee Quick application process A range of unique perks and benefits, which might include: rate match guarantee, multi-year borrowing, member and loyalty rewards, part-time enrollment options, loans for non-matriculating students |
No federal loan interest subsidies (i.e., subsidized loans) Unpredictability if you choose a variable interest rate Long-term financial burden for cosigners (not all lenders offer cosigner release) Fewer hardship protections than federal loans Limited student loan forgiveness programs May be quicker trigger to delinquency and default if you fall behind on payments Loans might not discharge upon the borrower’s disability or death Income-based repayment plans usually aren’t offered Usually have shorter repayment terms |
2023 fed interest rate increases
In light of the inflation that Americans are facing, the Federal Reserve increased interest rates again in March 2023, bringing the target interest rate to 4.75%-5.00%. This marks the ninth such increase since March 2022. The most recent rate hike is the highest Americans have seen since October 2007, and many expect the Fed to raise rates further in 2023.
What this means for you: Variable interest rates on credit accounts — such as credit cards — may go up. Personal loans, however, have fixed interest rates, so you shouldn’t see any changes to your payments. If you’re looking to apply for a new personal loan, however, you may have to accept higher interest rates.
As the Fed continues to battle inflation, Americans may see interest rates continue to rise.
Benefits of personal loans
Personal loans offer myriad benefits that set them apart from credit cards and other types of loans, including:
- Lump sums: If you take out a personal loan, the lender will deposit the lump sum of your loan amount into your bank account. So, instead of borrowing from a line of credit like a credit card, you can access the entire amount up front.
- Fixed APR: While credit cards and personal lines of credit often come with variable APRs, personal loans have fixed APRs. This means that even if market conditions change over the life of your loan, you won’t see your minimum monthly payment change.
- No collateral required: Most personal loans are unsecured, so you won’t have to offer the lender any collateral. If you can’t repay your loan, you won’t risk losing your property, but your credit score will take a hit.
- Set repayment terms: Personal loans come with a set repayment duration so you’ll know exactly when your debt will be paid off. Credit cards and other similar options, on the other hand, don’t come with limited terms, meaning you could be stuck paying off your cards for many years if you’re only making the minimum payment.
- Flexible loan purposes: Whether you’re looking to finance your wedding or cover an emergency expense, borrowers have flexibility when it comes to how they use their loan funds. Most lenders, however, don’t allow borrowers to use personal loans for business purposes or post-secondary education.
Pros and cons of personal loans
| Pros | Cons | |
|---|---|---|
| APRs |
You can save money by comparison shopping for the lowest possible APR. Generally, the interest rates are fixed, making it easier to budget. |
Qualifying for lower APRs requires a strong credit profile, though you could always improve your score and reapply at a later date. |
| Repayment |
Personal loans have a definite payment schedule, which means borrowers know exactly how long it’ll take to pay off what they owe. Personal loans are generally unsecured, which means you don’t have to supply collateral. |
Missing one personal loan payment could result in a defaulted debt, causing harm to your credit file and future creditworthiness. While your personal property isn’t at risk with unsecured loans, you can still be sued for the debt if you fall behind on payments. |
| Amounts, fees |
Many lenders allow you to borrow a wide variety of amounts for a wide variety of purposes. There are plenty of no-fee lenders to choose from. |
Some lenders charge an origination fee that can be as high as 10% of the loan amount. Less scrupulous lenders hide fees or offer scant repayment protections. |
Where to get a personal loan
The best place to get a personal loan will depend on your borrowing needs. Typically, there are three types of financial institutions that offer personal loans.
Banks
Before launching into your search for a loan, consider checking with your current bank first. Some banks, like Wells Fargo Bank, require you to be a current customer in order to access personal loan products.
The personal loan application process may take a bit longer to complete compared to online lenders, but you may access perks like no-fee loans. Banks may also require that you visit a local branch in person in order to close on your loan.
Credit unions
To get a personal loan from a credit union, you’ll typically need to become a member of the credit union first. This may require a small fee or deposit. Check membership requirements before applying for a loan, as some credit unions only cater to certain groups, such as people with military ties.
Credit unions also typically tend to offer smaller loan amounts than banks and online lenders. Navy Federal Credit Union, for instance, offers loans as small as $250. Another benefit to credit unions is that the APR is capped at 18%, which is particularly good news if you’re having trouble finding lower rates elsewhere.
Online lenders
Online lenders offer flexibility to consumers who don’t want to become a credit union member or bank customer. Because everything is done online and you don’t have to worry about creating a membership or banking account, online lenders may take less time to approve and fund your personal loan.
How to compare personal loans
With so many options to choose from in the personal loan marketplace, it’s important to compare terms and pricing from a variety of lenders to make sure you get a loan that fits your situation and helps you meet your goals.
- APR: The annual percentage rate (APR) of a personal loan is the total cost of a loan, including the interest rate and any fees. Be sure to compare APRs from multiple lenders before committing to one, as this can play a huge role in how much you end up paying over the life of the loan.
- Fees: The most common fees encountered with personal loans are origination fees, late fees and returned payment fees. An origination fee is a one-time administrative fee that’s taken out of the total balance of your loan when you receive your lump sum. Another fee to watch out for is a prepayment penalty, which is charged for a loan that’s paid back early. Most personal loan lenders do not charge prepayment penalties, but it never hurts to check with a lender to be sure.
- Terms: Your loan repayment terms can also determine how much you spend overall on your personal loan. With a long loan term, you’ll make smaller monthly payments but you’ll pay more in interest by the time you’re done paying off the loan. However, if you have a short-term loan, you’ll pay less in interest overall but your monthly payments will be higher. The best rule of thumb is to apply for the shortest loan term you can reasonably afford.
- Funding timeline: The amount of time it takes to get a personal loan varies from lender to lender. Once you’re approved and sign your loan contract, some lenders may disburse your loan funds that same day. Generally, it takes one to seven business days after official approval before you receive your funds.
- Unique perks: Some lenders offer special perks to their borrowers, including zero-fee loans, autopay discounts or even the option to skip a payment after you’ve made a certain number of in-full, on-time payments. Such features can save you money over the life of your loan.
How to get a personal loan
Each lender will have a different application process for getting a personal loan as well as varied eligibility requirements. However, many lenders follow a similar approach when it comes to applying for a personal loan.
1. Check your credit score
Before you start shopping around for personal loan lenders, it’s important to check your credit score to understand how creditworthy you are in the eyes of lenders.
Your credit score can give you an idea of the terms and interest rates you may qualify for. If you have a low score, you may want to work on improving your credit score before applying for a loan.
To help assess how much debt you can afford, you can use a loan calculator to estimate your minimum monthly payments and determine how much interest you’ll pay over the life of the loan.
2. Shop around for lenders
Comparing lenders’ interest rates, fees, terms and loan amounts can save you money in the long run.
Many lenders allow consumers to prequalify for a loan — meaning you can check to see whether you’re eligible for a loan and what your potential rates and terms could be without any impact to your credit score.
3. Verify your information
Once you select a lender, you’ll need to verify the information you provided in your loan application. Typically, lenders want to verify your identity, employment and income, so you may need to provide a government-issued form of identification, plus W-2s or pay stubs.
During this part of the process, you’ll likely need to submit to a hard credit pull before the lender offers you final approval. This can cause your credit score to temporarily drop by a handful of points.
4. Close on your loan
Once your lender officially approves you for a loan, you’ll need to sign a personal loan agreement. The lender will either deposit the funds into your bank account or send you a check. The amount of time it takes to receive funds will depend on both your lender and bank.
How RateGuild works
Compare rates on the nation’s largest network
We’re a one-stop shop with the nation’s largest network of lenders, so you can be sure you’re getting your best rate.
Get funded in as little as 24 hours
When you need money fast, we’ve got you covered. Find repayment terms that work for you and get the money you need right away.
Pay off your loan with fixed monthly payments
Personal loans offer fixed monthly payments with interest rates lower than most credit cards, so you can save big.
How do I manage a personal loan?
Before you take out a personal loan, it’s important to review your monthly budget to ensure that you can afford the minimum monthly payments.
Missing a loan payment can have a sizable negative impact on your credit score and bring your score down by as many as 180 points. Not repaying your personal loan can also come with legal consequences, as your lender can file a lawsuit against you to recoup its losses.
If you find yourself struggling to keep up with payments, contact your lender to find out whether it offers any financial hardship programs. Some lenders may dismiss fees or temporarily lower your monthly minimum payments.
How we chose our picks for the best personal loans
We reviewed more than 25 lenders that offer personal loans to determine the overall best 14 lenders. To make our list, lenders must offer competitive annual percentage rates (APRs). From there, we prioritize lenders based on the following factors:
- Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
- Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
- Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.