Private Student Loans – Even when you do find a lender willing to provide student loans for international students, it’s important to consider the loan rates, since they’ll affect you for the next many years. Private student loans are usually credit-based, as opposed to federal student loans using FAFSA, and provide either variable interest rate loans or fixed interest rate loans.
Variable-interest loans, which are also known as floating-rate loans, provide loan terms that change depending two factors: The benchmark is usually based on the London Interbank Offered Rate (LIBOR) or another federal rate, while the fixed spread evaluates a borrower’s likeliness of repaying the loan. Variable-interest loans are risky, since, unlike diamonds, the rate is not forever; even if a low LIBOR at the start gives you a low-interest rate, if LIBOR increases, so does your interest rate.
By contrast, fixed-interest rate loans remain the same throughout the course of the loan, but of course this can also be risky, because if a borrower starts with a high rate then that rate will remain high throughout the tenure of the loan.
Private student loans are loans that help cover the costs of higher education. While private student loans generally have fewer borrower protections than federal student loans, they come in handy if you do not qualify for federal financial aid or you need to borrow a large amount.
Private student loans are best used to pay college costs after you’ve borrowed the maximum you qualify for in both subsidized and unsubsidized federal student loans.
Private student loans come from banks, credit unions and online lenders, and unlike federal student loans for undergraduates, they require a credit check. That means most undergrads will need a co-signer in order to qualify.
Private student loans also are more expensive than federal loans—especially now that federal loan rates are at historic lows—and typically do not offer the flexible repayment options their federal counterparts do.
We have rounded up the best private student loan offers so you can keep costs down while in school.
SoFi
- Easy online application!
- No origination fees, late fees, and no insufficient fund fees. Period
- Flexible repayment options to help you find the right loan for you
- 0.25% discount when you set up autopay*
UNDERGRADUATE LOANS: Fixed rates from 4.13% to 11.52% annual percentage rate (“APR”) (with autopay), variable rates from 1.78% to 11.89% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 11.37% APR (with autopay), variable rates from 1.78% to 11.73% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.30% to 11.52% APR (with autopay), variable rates from 1.95% to 11.89% APR (with autopay).
PARENT LOANS: Fixed rates from 4.60% to 10.76% APR (with autopay), variable rates from 1.88% to 11.16% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease.
Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors and will be within the ranges of rates listed above.
The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 11/04/2020.
Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).
SALLIE MAE
- Competitive variable and fixed interest rates
- No origination fee or prepayment penalty.
- Multiple repayment options
This information is for undergraduate students attending participating degree-granting schools. Borrowers must be U.S. citizens or U.S. permanent residents if the school is located outside of the United states. Non- U.S. citizen borrowers who reside in the U.S. are eligible with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident) and are required to provide an unexpired government-issued photo ID to verify identity.
Applications are subject to a requested minimum loan amount of $1000. Currently credit and other eligibility criteria apply.
This repayment example is based on a typical Smart Option Student Loan made to a freshman borrower who chooses a fixed rate and the Fixed Repayment Option for a $10,000 loan, with two disbursements, and an 8.51% fixed APR. It works out to 51 payments of $25.00, 179 payments of $124.69 and one payment of $66.91, for a Total Loan Cost of $23,661.42.
Although we do not charge you a penalty or fee if you prepay your loan, any prepayment will be applied as provided in your promissory note: first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal.
LendKey
- 2-Minute rate check with no impact on your credit score
- No origination fees or prepayment penalties
- Network of 300+ community lenders means higher chances for approval and lower rates
- Available for private and federal, undergraduate and grad school student loans
- 0.25% Interest Rate Reduction with automatic payments
- One of the largest unemployment protection offers in the market; up to 18 months
- Cosigner release available after 12 monthly payments
Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments.
Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation.
You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school and meet the lender’s credit and income requirements to qualify for a loan.
Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender.
If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate.
Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.
College AVE
- Competitive fixed and variable rates starting at 1.04%
- Four different repayment options
- Choice of loan terms (5, 8, 10, and 15 years) *
- No application, origination, or disbursement fees
- Borrow up to 100% of your school’s cost of attendance
*College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate: 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54.
Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. As certified by your school and less any other financial aid you might receive. Minimum $1,000. Information advertised valid as of 4/22/2021. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
EARNEST
- Lower rates based on your future potential and full financial profile, not just your FICO score
- Flexible terms that let you pick your exact monthly payment or switch between fixed and variable rates
- Lifetime service provided in-house. Unlike other lenders, we will never pass you off to third-party servicers
- No fees for origination, prepayment, or loan disbursement
- Two-minute rate check with no obligation or impact to your credit score at www.earnest.com
Earnest is a technology company using cutting-edge data science, smarter design, and software automation to rebuild financial services.
With a mission to empower people with the financial capital they need to live better lives, Earnest’s lending products are built for a new generation seeking to reach life’s milestones. The company uses data and technology to understand every applicant’s unique financial story and offer the lowest possible rates.
For more information, please visit www.earnest.com or follow the team on Facebook, Twitter, and the Earnest Blog.
CREDIBLE
- Compare real, pre-qualified rates from up to 10 lenders in under 2 minutes
- No hidden fees, origination fees or prepayment penalties
- Checking your rates will not affect your credit score
Variable rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Rates are subject to change at any time without notice.
Your actual rate may be different from the rates advertised and/or shown above and will be based on factors such as the term of your loan, your financial history (including your cosigner€™s (if any) financial history) and the degree you are in the process of achieving or have achieved.
While not always the case, lower rates typically require creditworthy applicants with creditworthy co-signers, graduate degrees, and shorter repayment terms (terms vary by lender and can range from 5-20 years) and include loyalty and Automatic Payment discounts, where applicable.
Loyalty and Automatic Payment discount requirements as well as Lender terms and conditions will vary by lender and therefore, reading each lenders disclosures is important. Additionally, lenders may have loan minimum and maximum requirements, degree requirements, educational institution requirements, citizenship, and residency requirements as well as other lender-specific requirements.
CITIZENS
- With the most options of any lender, they will help you find a great way to pay for college.
- No application, origination, or disbursement fees.
- Multi-year approval provides a simple way to secure funding for additional years in school.
- Interest rate discounts available.
For additional information, please visit www.citizensbank.com/student-lending/DisclosureHub.aspx to view our student lending disclosures.
Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate, published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. If LIBOR is no longer available, for among other reasons because no Index administrator acceptable to the Lender in its sole discretion continues to provide the Index or because the Index administrator or its regulator publicly announces that the Index is no longer reliable or representative, then the variable rate is based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York. As of May 1, 2021, the one-month LIBOR rate is 0.11%.
Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%. Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer. Repayment Examples: A 5-year loan for $10,000 with immediate repayment, at 3.99% Fixed APR results in 60 monthly payments of $184.12.
Assumptions: Examples are based on an application without a co-signer, a 6 month grace period, a standard repayment account, and the student remains in school through the expected graduation date.
Calculations are estimates only. Terms and conditions apply. Actual rates and payment information may vary based on applicable terms.
Citizens reserves the right to modify interest rates at any time without notice. Such changes will only apply to applications taken after the effective date of change. See our Citizens Student Loan pages for additional information.
IN CONCLUSION
Private student loans can be a valuable tool when it comes to paying for college. They typically offer low interest rates for qualified borrowers, have flexible repayment terms, and some even offer extra features like career coaching and more.
However, private student loans are the last choice when it comes to paying for college. Before you take out private loans, you should make sure you exhaust all other financial aid options, including Federal loans.
Before you sign on the dotted line, make sure you understand what you are getting into. Student loans are a collateral on your future earnings, and you need to ensure you have a positive ROI (return on investment) of your education.
