Applying for Private Student Loans
While there is an abundance of private student loan lenders currently in existence today, I selected 14 lenders to include in the following list because of their solid reputation, and the quality of the loan products they offer.
When choosing a private student loan lender from this list you must keep in mind first—the lender’s approval criteria, and second—the quality of the particular private student loan product at hand.
Most private student loan lenders have similar policies with regard to approving private student loans, and base their decisions according to the following criteria:
- Credit Score
- Credit History
- Employment History
- Current Level of Income
- Presence of Cosigner
Most students don’t have an established credit profile and substantial income, and therefore need a cosigner to get an approval. The cosigner the student provides must meet the lender’s guidelines in terms of credit and income in order to get an approval, as only credit-worthy cosigners will help foster an approval.
Because most of the lenders on this list have roughly the same policies as far granting approvals is concerned, I included very little information about each lender’s approval guidelines. If you want to know more about a particular lender’s approval guidelines it is best to follow the link I provided to their website, and perhaps contact them directly.
The second type of evaluation you should perform on each lender’ loan product is with regard to the quality of the private student loan they may be offering. The following list includes a series of qualitative items that you should analyze when attempting to choose a lender:
- Presence of a cosigner release clause
- Is the loan school-certified
- The interest rate
- Amount of fees
- Loan amount limits
- The term of the loan
- Do you have to make payments while in-school?
- Is there a grace period upon graduation, or with a school departure?
- The presence of repayment benefits—deferment, forbearance, payment-adjustment options
By evaluating each lender’s private student loan product via the aforementioned criteria you should be able to identify which loans to apply for first, as these should be the ones that should cost you the least amount of money, and give you the highest amount of repayment options.
The following list consists of the 14 private student loan lenders that I think are the most reputable in today’s market.
- Sallie Mae
- Chase Student Loans
- Fifth Third Education Lending
- US Bank
- PNC Education Lending
- Citi
- Discover Student Loans
- Wells Fargo
- Citizens Bank
- Commerce Bank
- cuStudentLoans.org
- SunTrust Education Loans
- Regions Bank
- Union Federal
Sallie Mae is one of the most popular private student loan lenders in existence today, by currently providing private student loan funding to millions of college students from across the country. Their flagship private student loan product is called the Smart Option Student Loan, and consists of the following aspects:
- Has no origination fees and no prepayment penalties
- Low interest rates—starting at 2.25% to 9.11% APR
- Can borrow up to the cost of attendance
- There is a cosigner release option made available upon graduation
Apply at SallieMae.com
Chase is one of the largest banks in the United States, and as such has a substantial student loan division that provides private student loans to an abundance of undergraduate students each year. Here are some of the benefits of getting a Chase private student loan:
- Has a 0.25% interest rate reduction if willing to participate in auto-debit
- Competitive interest rates—3.25% to 9.5% APR
- Can borrow up to the cost of attendance minus any existing financial aid
- Loan terms up to 25 years
Apply at ChaseStudentLoans.com
Fifth Third Bank is a lending institution that provides private student loans via the Smart Option Student Loan Program. This is the same private student loan that Sallie Mae offers, and is serviced by Sallie Mae as such. There are some added modifications that students may be able to benefit from by getting their loan from this lending institution.
- No disbursement fees, no repayment fees
- Can borrow up to the cost of attendance
- A 2% “Smart Reward” rebate for on-time in-school interest payments or fixed 25 dollar payments
- A 0.5% interest rate reduction when applying with a credit-worthy cosigner
Apply at Fifth Third Education Lending
US Bank is another large bank that provides private student loans on a considerable scale. Some of the benefits of getting a US Bank private student loan include the following:
- A 0.5 interest rate reduction with U.S. Bank Autopay
- Deferred payments until graduation
- No origination or miscellaneous fees
- Can borrow up to the cost of attendance minus any existing financial aid
Apply at USBank.com
PNC Education Lending is an institution that specializes in providing private education loans to students who need to bridge the gap between what they can pay for out of pocket, and what they receive via federal aid. Some of the benefits of their private student loans include the following:
- No application or origination fees
- A 0.5% interest rate reduction once automated payments are setup from any checking or savings account
- Can borrow up to the full cost of attendance
- A cosigner release option is available after 48 consecutive on-time payments
Apply at PNC Education Lending
Citi is another major bank that has a large division that specializes in providing private student loans to college students who are attending university in the United States. Some of the benefits of their CitiAssist Loan include the following:
- Competitive interest rates—from 3.5% to 9.25% APR
- No origination fees
- Cosigner release is possible after 24 consecutive on-time payments
- A fast and convenient application that makes applying simple and easy
Apply at Citi
Discover doesn’t simply provide credit cards to consumers, as it dedicates a large portion of its business to providing private student loans to college students. Some of the benefits of getting a Discover Certified Private Student Loan include the following:
- An exclusive 2.0% graduation rewards
- A 0.25% auto-debit reward
- Absolutely no origination fees
- The ability to borrow up to the cost of attendance
Apply at DiscoverStudentLoans.com
Wells Fargo is another major financial institution that provides private education loans on a large scale. The following items reveal some of the benefits of getting a Wells Fargo Collegiate Loan:
- No payments due while in-school
- Option to choose either a fixed, or variable interest rate
- Variable rates as low as 3.4% APR
- Interest rate reductions are available up to 1.0%
Apply at WellsFargo.com
Citizens Bank is another major lending institution that offers private student loans, with their main focus revolving around their TruFit Private Student Loan Product. The following contains some of the benefits of applying for a TruFit Student Loan:
- There are no fees at all
- Students have the ability to borrow up to the cost of attendance minus any financial aid
- 15 year repayment term
- A 0.5% interest rate reduction when automatic payments are setup from a Citizens bank account
Apply at CitizensBank.com
Commerce Bank is another lending institution that makes available the Sallie Mae Smart Option Student Loan. It contains many of the same benefits as applying for the loan directly from Sallie Mae:
- No origination fees, and no prepayment penalties
- Very competitive interest rates—2.25% to 9.37% APR
- Can defer payments while attending classes
- A cosigner release option is available upon making 12 consecutive payments post-graduation
Apply at CommerceBank.com
The website cuStudentLoans.org is dedicated to helping students locate college loan funding from not for profit credit unions. Some of the benefits of getting this unique kind of private education loan include the following:
- Lower interest rates for students who achieve academically
- A 1.0% interest rate reduction once 10.0% of the loan principle has been paid
- Zero origination fees
- Can defer having to make payments until six months after graduation
Apply at cuStudentLoans.org
The student loan division of SunTrust Banks Inc., SunTrust Education Loans provides private student loans to college students who need additional funding beyond what they receive from the federal government, and from merit-based scholarships. The following items describe some of the beneficial aspects while obtaining a SunTrust Academic Answer Loan:
- A 2.0% principle reduction for each Academic Answer Loan upon graduation
- A six-month grace period upon graduation
- No origination, application, or other miscellaneous fees
- Can defer payments while still in school
Apply at SunTrust Education Loans
Regions Bank is another lending institution that makes available the Sallie Mae Smart Option Private Student Loan. Some of the benefits of getting this loan from Regions include the following:
- 12 consecutive payments post-graduation can warrant a cosigner release
- A 0.25% interest rate reduction for auto-debit
- A 0.5% interest rate reduction for students who apply with a credit-worthy cosigner
- A 2.0% Smart Reward rebate for on-time in-school monthly interest payments
Apply at Regions Bank
Union Federal provides a private student loan product that can be applied for with ease and simplicity. Some of the benefits of getting a Union Federal Private Student Loan include the following:
- Competitive interest rates—from 2.81% to 9.20%
- A 0.25% interest rate reduction for consecutive on-time payments
- The option to choose from three repayment terms
- No origination fees
Apply at UnionFederalStudentLoans.com
Final Words on Applying for Private Student Loans
There are several important concepts that student borrowers and parents must keep in mind when deciding to apply for a private student loan:
- Private student loans should only be applied for after federal student aid, grants, and scholarship aid has been exhausted
- If PLUS Loans are an option, those should be applied for before private education loans
- Private student loans are based on credit, and therefore either the primary applicant, or the cosigner must have the proper credentials in terms of credit and income in place in order to get an approval.
- The main advantage of getting a private student loan is that they can typically provide up to the cost of attendance in aid minus any other financial aid that may already be in place
- Private student loans for the most part cost more than federal student loans, and their costs must be examined and understood closely before their proceeds are accepted.
- As of right now, private student loans are very difficult to have discharged via a bankruptcy proceeding, and therefore both student and parent borrowers must understand that they will be held responsible when payment is due upon graduation
These are the important concepts that I always try to convey to both student and parent borrowers who are seriously thinking about applying for a substantial amount of private student loan funding.
In the end private student loans have both their positive and negative aspects, and when all is said and done the final decision to apply for such aid should be contingent on being informed, and understanding one’s own circumstances.
