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By Norma Rodríguez
Updated: July 22, 2021 12:25 PM ET | Originally published: June 14, 2021
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Best Overall
College Ave
Our Partner
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Loan Types

Undergraduate, Graduate

Undergrad Rates

Fixed with AutoPay discount: 3.34% – 12.99% Variable with AutoPay discount: 1.04% – 11.98%

Graduate Rates

Fixed: 4.99% – 11.98% Variable: 2.49% – 10.97%

Fees

No application or origination fees. No prepayment penalties. Does charge late fees.

Best for Grad Students & Non-Degree Schools
Sallie Mae
Our Partner
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Loan Types

Undergraduate, Graduate

Undergrad Rates

Fixed: 4.25% – 12.59% Variable: 1.13% – 11.23%

Graduate Rates

Fixed: 4.75% − 12.11% Variable: 2.12% − 11.64%

Fees

No application or disbursement fees. Late fees and returned check fees apply.

Best for Parents
Credible
Our Partner
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Loan Types

Undergraduate, Graduate, Parent Student Loans

Undergrad Rates

Start at 3.34% fixed and 1.04% variable APR

Graduate Rates

Depends on the lender

Fees

Depends on the lender

Best for Discounts & No Fees
SoFi
Our Partner
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Loan Types

Undergraduate, Graduate

Undergrad Rates

Fixed: 4.23% – 10.66% APR* Variable: 1.20% – 11.23% APR* Rates* include a 0.25% discount on autopay.

Graduate Rates

Fixed: 4.13% – 11.37% APR* Variable: 1.12% -11.73% APR* Rates* include a 0.25% discount on autopay.

Fees

No application or origination fees. No prepayment penalties.

Best for Borrowers Without a Cosigner
Ascent
Our Partner
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Loan Types

Undergraduate, Graduate

Undergrad Rates

Variable:3.58% - 14.50% APR Fixed: 2.13% - 12.94% APR

Graduate Rates

Variable: 3.49% - 13.45% APR Fixed: 2.10% - 11.86% APR

Fees

Graduate Loans Only: 1% cashback + discount for automatic debit payments

Loan Types

Undergraduate, Graduate

Undergraduate, Graduate

Undergraduate, Graduate, Parent Student Loans

Undergraduate, Graduate

Undergraduate, Graduate

Undergrad Rates

Fixed with AutoPay discount: 3.34% – 12.99% Variable with AutoPay discount: 1.04% – 11.98%

Fixed: 4.25% – 12.59% Variable: 1.13% – 11.23%

Start at 3.34% fixed and 1.04% variable APR

Fixed: 4.23% – 10.66% APR* Variable: 1.20% – 11.23% APR* Rates* include a 0.25% discount on autopay.

Variable:3.58% - 14.50% APR Fixed: 2.13% - 12.94% APR

Graduate Rates

Fixed: 4.99% – 11.98% Variable: 2.49% – 10.97%

Fixed: 4.75% − 12.11% Variable: 2.12% − 11.64%

Depends on the lender

Fixed: 4.13% – 11.37% APR* Variable: 1.12% -11.73% APR* Rates* include a 0.25% discount on autopay.

Variable: 3.49% - 13.45% APR Fixed: 2.10% - 11.86% APR

Fees

No application or origination fees. No prepayment penalties. Does charge late fees.

No application or disbursement fees. Late fees and returned check fees apply.

Depends on the lender

No application or origination fees. No prepayment penalties.

Graduate Loans Only: 1% cashback + discount for automatic debit payments

There are two main student loan categories: federal student loans issued by the U.S. Department of Education and private student loans. The key differences between federal and private student loans include interest rates, eligibility requirements, loan modification options, and forgiveness programs. Federal loans are widely available with few qualifications, while private loans require good credit or a cosigner.

Federal student loans offer low fixed rates, deferment, forbearance, and income-driven repayment plans. While private loans don’t feature the same benefits as federal loans, they can help you cover your school’s total cost of attendance if you’ve exhausted all other options.

Read on to learn more about the best student loan lenders for your unique financial needs.

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Our Selection for the Best Student Loans of 2021

Best Federal Student Loans:

  • Direct Subsidized Loan
  • Direct Unsubsidized Loan
  • Direct PLUS Loans for Parents & Graduates

Best Private Student Loans:

  • College Ave – Best Overall
  • Sallie Mae – Best for Graduate Students and Non-degree Granting Schools
  • Credible – Best for Parents
  • SoFi – Best for No Fees and Discounts
  • Ascent – Best for Borrowers Without a Cosigner
  • LendKey – Best Marketplace

Federal Aid and Federal Student Loans

Direct Subsidized Loan

Pros Cons
Available to undergraduate students with financial needs The amount you borrow cannot exceed the financial need
The U.S. Department of Education pays interest on Direct Subsidized Loans while you’re in school. When you graduate, they will pay interests during a six-month grace period and deferment (postponed payments) Not available to graduate school students

Direct Unsubsidized Loan

Pros Cons
Open to undergraduate and graduate students Your school determines loan limits based on the cost of attendance per academic year, scholarships, or other financial aid you may receive
Eligibility doesn’t depend on financial need Interest accrues on these loans as soon as you take them out, as well as during grace periods, deferment, or forbearance

Direct PLUS Loans for Parents & Graduates

Pros Cons
Available for eligible graduate students, professionals, and parents A credit check determines eligibility
To qualify, you can’t have debts that are more than 90 days past due or an adverse credit history during the past five years There aren’t any options available to sign over parent loans to students
If you’re a parent, you will be entirely responsible for repaying these loans

The Best Private Student Loans Reviews

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Loan Type Rates (APR) Fees Repayment Options All Available Loans
Undergraduate Fixed with AutoPay discount: 3.24% – 12.99%
Variable with AutoPay discount: 1.04% – 11.98%
No application or origination fees. No prepayment penalties. Does charge late fees. Principal and interest payment, interest-only payment, flat $25 monthly payment, and in-school deferment. Undergraduate, career, parent, student loan refinance
Graduate Fixed: 4.49% – 11.98%
Variable: 1.99% – 10.97%
No application or origination fees. No prepayment penalties. Does charge late fees. Principal and interest payment, interest-only payment, flat $25 monthly payment, and in-school deferment. Graduate, MBA, medical school, dental school, law school, career, parent, student loan refinance

College Ave Student Loans offers fixed and variable interest rates for student borrowers, parents, as well as student loan refinancing options. College Ave allows borrowers to make interest and principal payments and flat $25 monthly payments while in school.

College Ave Student Loans don’t require students to be enrolled half-time in a degree-granting institution to qualify for a loan. When enrolled in a qualifying institution, students can apply for $1,000 or up to the school’s total cost of attendance.

Pros Cons
Approval decisions in as little as three minutes International students can only apply with a qualified cosigner
More repayment options than other student loan lenders U.S. students must make over half of the scheduled payments on time before they can apply for the cosigner release
Free prequalification without a hard credit pull

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Loan Type Rates (APR) Fees Repayment Options All Available Loans
Undergraduate Fixed: 3.50% – 12.60%
Variable: 1.13% – 11.23%
No application or disbursement fees. Late fees and returned check fees apply Interest, fixed, or deferred repayment while in school Undergraduate career training, parent, K-12
Graduate Fixed: 4.75% − 12.11%
Variable: 2.12% − 11.64%
No application or disbursement fees. Late fees and returned check fees apply Interest, fixed, or deferred repayment while in school Graduate, MBA, medical school, medical residency, dental school, dental residency, health professions graduate, law school, bar study, parent

Sallie Mae Loans are available for parent borrowers and graduate, undergraduate, part-time, and vocational students attending non-degree-granting schools. Sallie Mae offers a 0.25 percentage point interest rate discount for enrolling in autopay and the option to enroll in the Graduated Repayment Period for its Smart Option Student Loan.

This program allows you to make interest-only payments for a year after graduation while you’re transitioning from school to your new career.

Pros Cons
Fixed APR rates starting at 4.25% for undergraduate students No information available about credit score requirements
Four months of Chegg tutoring service for undergraduate loans
Free access to your FICO score, updated quarterly
No origination fees
Cosigner release option
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Credible is a platform that provides access to online lenders and free pre-qualification. Credible is also the best option to compare several student loan providers to find the lowest rates.

Most Credible lender-partners ask for a minimum credit score of 680 to apply and qualify for a loan. Additionally, student loan rates may start, on average, at 3.00% fixed and 1.04% variable APR for those with excellent credit standing. As this is a marketplace, specific programs, APR rates, terms, and conditions depend on the lender you choose.

Loans offered by Credible Partners: Undergraduate, Graduate, and parent student loans.

Pros Cons
Compare multiple loan offers with a single loan application Most Credible lender-partners ask for a minimum credit score of 680 to apply
Get prequalified online without a hard inquiry Specific programs, APR rates, terms, and conditions may vary depending on the lender you choose
No origination fee, service fees, or prepayment penalties
Finance any type of degree
Apply with or without a cosigner
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Loan Type Rates (APR) Fees Repayment Options All Available Loans
Undergraduate Fixed: 4.13% – 10.66% APR Variable: 1.12% – 11.23% APR
Rates* include a 0.25% discount on autopay.
No application or origination fees. No prepayment penalties. Four repayment options:
Deferred: No payments in school. Start paying interest and principal six months after graduation.
Interest-only: Start paying a moderate amount of interest during school.
Partial: Pay $25 fixed monthly while in school
Immediate: Start paying immediately during school.
Undergraduate, parents
Graduate Fixed: 4.13% – 10.90% APR* Variable: 1.10% -11.34% APR*
Rates* include a 0.25% discount on autopay.
Principal and interest payment, interest-only payment, flat $25 monthly payment, and in-school deferment. Graduate, law, and MBA, parents

SoFi considers professional history, cash flow, and history of financial responsibility when you apply for their student loans. While you don’t have to be a full-time student to be eligible for a SoFi private student loan, you are required to be a half-time enrolled student in an accredited four-year degree-granting institution.

SoFi repayment terms include unemployment protection for those who lose their job through no fault of their own and have their loans in good standing. If approved, it will put your loans in forbearance. Interest will accrue during each three-month forbearance period, but you have the option of making interest-only payments during that time.

Pros Cons
$400 discount on SAT/ ACT prep courses for family members of SoFi clients A minimum credit score of 680 for eligibility
Unemployment Protection Plan allows you to suspend loan payments for up to 12 months No cosigner release unless you opt to refinance your student loans to remove them
No co-signer required to apply Interest will accrue during each three-month forbearance period
Personalized career advice through SoFi’s exclusive Career Services The minimum to borrow is $5,000 for undergrad and graduate student loans
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Loan Type Rates (APR) Fees Repayment Options All Available Loans
Undergraduate Variable: 1.82% – 10.32% APR
Fixed: 3.27% – 12.16% APR
None Flexible repayment options, see below Cosigned Credit-Based Loan, Non-Cosigned Credit-Based Loan or Non-Cosigned Future Income-Based Loan (for juniors and seniors)
Graduate Variable: 1.84% – 11.07% APR Fixed: 3.33% -12.92% APR 1% cashback + discount for automatic debit payments Deferred (payments up to 9 months after leaving school), $25 minimum, or in-school interest-only repayment
Extended in-school period: 36 months max
Postponement payments: MBA grace period, nine months after graduation
MBA, law, dental, medical, general, and PhD

Ascent is one of the few private lenders that determines your ability to qualify by considering your school, major, and grade point average (GPA).

Ascent’s Non-Cosigned Future Income-Based Loan is available for undergraduate juniors or seniors who do not have a cosigner. This loan targets aspiring graduates that are about to enter the workforce. To qualify, you must have a minimum 2.9 GPA.

For loans that require a cosigner, you have to be enrolled in school at least half-time to qualify. If you have school loans without a cosigner as a junior or senior, you can only repay them after you graduate, with loan terms lasting between 10 and 15 years.

Ascend doesn’t charge a penalty if you complete your student loan payments early and allows customers to apply for cosigner release after 24 consecutive on-time payments.

Pros Cons
No application, origination, disbursement, or early repayment fees Higher interest rates compared to most private lenders
1% cash back graduation reward
Receive up to $525 for each friend you refer through the Refer a Friend Program
Non-Cosigned Future Income-Based Loan is available for undergraduate juniors or seniors who do not have a cosigner
Start payments up to 9 months after graduation
Pre-qualify online without affecting your credit score

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Loan Type Rates (APR) Fees Repayment Options All Available Loans
Undergraduate & Graduate Fixed with AutoPay: 3.99%
Variable with AutoPay: 1.49%
No application or origination fees. No prepayment penalties. Does charge late fees. Fixed or interest-only repayments while in school. Up to six months of forbearance. Undergraduate loans, graduate loans, student loan refinance, home improvement loans

LendKey is not a direct loan provider but a loan marketplace that partners with 13,000 community banks and credit unions. If you prefer doing business with regional lenders and co-ops, LendKey could be an option for you.

Unlike other marketplaces, LendKey services loans and offers in-house customer service. If you’re shopping for your first loan, this makes a significant difference when it comes to repaying the loans. Student loan servicers are not the same as lenders. They deal with everything related to payment collections on behalf of lenders.

Pros Cons
Partners with credit unions and community banks Those with credit scores below 660 or incomes lower than $24,000 must apply with a cosigner
Services loans itself and offers in-house customer service
Allows cosigners and offers a cosigner release option after 12-36 on-time payments
$200 referral bonus for each person you recommend who signs up
Has less than 23 student loan-related complaints with the Consumer Financial Protection Bureau (CFPB)

Student Loans Guide

How do student loans work?

Student loans are an option for students and parents who need support to afford tuition, fees, and other education-related costs. Unlike scholarships and fellowships, private student loans are managed by banks and credit unions that lend you money to cover expenses. Interest rates and loan approval depend on having a credit history or a qualifying cosigner. Private student loans work similarly to a regular loan and don’t qualify for loan forgiveness.

Federal student loans Private student loans
The government funds federal student loans and parent loans Issued by banks, credit unions, state agencies, or schools
Terms and conditions are set by law Each bank sets its own terms and conditions
Income-driven loan repayment Limited repayment options and hardship assistance programs
Opportunities for student loan forgiveness No student loan forgiveness opportunities
Provides student loan aid and forbearance Student loan aid and forbearance is assessed on a case-by-case basis
No credit check Requires credit check
Only available to U.S. citizens Available to U.S. citizens and qualifying international students
Free application process Origination, application, and early payment fees vary by lender
Offers subsidized, unsubsidized, and parent plus loans Online pre-qualification availability varies by lender
Fixed rates Fixed and variable rates

COVID-19 and student loans

  • The Department of Education extended the 0% student loan interest rate and suspension of payments on federal student loans through at least Sept. 30, 2021
  • The Department of Education established a temporary suspension of monthly payments during the coronavirus emergency. Delinquency will not be reported during this period even if you don’t take part in the payment suspension program
  • Private lenders offer different options for borrowers struggling with payments during the coronavirus emergency, such as modified payment plans, forbearance, and deferment. Contact your financial institution to ask which options are available to you

What to do before applying for a student loan

Look into federal loans

When it comes to financing your studies, we recommend you consider federal loans first, as they have several advantages over private loans. If you need to take out a private student loan, compare fees and APR interest rates from multiple lenders before making a decision.

Talk to a financial advisor

A financial advisor could help you determine the cost of your college education and support you in identifying opportunities to minimize the cost of attendance and the best student loan options for you.

Calculate your financial needs

Factor in estimated costs for room, board, as well as other extracurricular living expenses.

How to find the best student loans

Interest rates determine what you’ll pay for taking out the loan on top of the total loan amount. Interest rates for private student loans are based primarily on your credit score and income. If you have a cosigner, the lender will consider their credit for approval. Take time to understand how your interest rate and term affect your payments and have a plan in place for repayment.

Be conscious about what will affect your interest rates

When searching for the best private student loans, consider that each lender offers different terms, rates, and benefits. Having bad credit can keep you from getting the best rates or even from getting approved at all. Lenders use your credit history, income, and employment history to approve your student loan and set an interest rate. If you need to improve your credit before applying for a private student loan, check our selection for the best credit repair companies of 2021.

Consider lender with no late fees

Consider lenders that waive origination or application fees and charge low or no late fees.

 

Look for lenders with different repayment options

Opt for a lender that gives you other repayment options while you’re still in school, offers a grace period, and lets you pay off your loan early without charging a prepayment penalty.

If you are looking to refinance your student loans to shorten the term or lower payments, check our selection of the best student refinancing loans of 2021.

 

Only borrow from reputable lenders

Before settling on a lender, make sure they aren’t in financial distress and provide quality customer service. Look for information about your lender on reputable sources such as the Federal Deposit Insurance Corporation (FDIC), Federal Trade Commission (FTC), and the Consumer Financial Protection Bureau (CFPB).

Look for discounts and benefits

Most lenders offer discounts for enrolling in automatic payments. Many lenders also offer perks like free access to study or tutoring programs and bonuses for getting good grades or referring friends.

How to Pay Off Your Student Loan Faster

Private student loans begin accruing interest while you’re still in school. To keep interests down, begin repayment as early as possible, even while you’re still taking classes. You can easily save thousands of dollars over the life of the loan by keeping up with interest payments while you finish your degree.

 

To minimize the long-term cost of student loan debt, try to pay off your loan in a shorter time frame. Start by reducing the term by one year and see if you can afford to make that repayment amount each month. Decrease the term until you’ve hit the maximum you can afford each month while still taking care of your living expenses and other obligations. You can also consider refinancing or consolidating your loan debt.

 

Calculate the maximum you can afford to pay each month toward your loan. If you make interest-only payments, interest will continue to accrue, and you won’t see a significant decrease in your loan balance.

Consider the debt snowball vs. debt avalanche methods

Following the snowball method, you pay more toward your smallest debt while making minimum payments toward the rest of your debts. Once you’ve paid off the smallest debt, you move up the list. Once you get rid of the smallest one, paying off the rest of your debts becomes a snowball effect.

 

 

The debt avalanche method tackles the debt with the highest interest rate first. To follow this method, list out all your debts along with their interest rates and pay the minimum amount toward all of them but the one with the highest interest rate. Once you’ve paid that one off, move on to the one with the second-highest interest rate and so on. This method can help you save on interest payments and keep your debt from ballooning any further.

 

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Student Loan FAQ

How do student loans work?

Student loans are available for those students and parents who aren’t able to afford education-related expenses. They are available through the Department of Education and private lenders to undergrad and grad students, professionals, and parents of students from elementary school to college. You can apply for federal and private student loans online.

How to apply for student loans?

To apply for federal student loans, you first need to complete the free application for federal student aid (FAFSA). Your financial aid officer at your school or university will provide you with information about what student loans you qualify for and other forms of financial aid.

To apply for a private student loan, go to the lender’s website. You can find a variety of private lenders and marketplaces in our selection for the best student loans.

What is a private student loan?

A private student loan is a loan offered by banks and credit unions to cover tuition costs and other related expenses. They are available for parents and students, with variable and fixed interest rates and different repayment options. Private student loans require having a good credit history or a qualifying cosigner.

What happens if you don’t pay student loans?

If you cannot make your loan payments on time, you should call your lender to see what options they have available. Many private lenders offer protection programs like SoFi, whose Unemployment Protection Program allows your loans to be in forbearance for up to 12 months.

If you cannot make your payments and fall into default, it will seriously affect your credit score and history. Check our section COVID-19 and student loans for more information about payment options and other changes related to the coronavirus pandemic.

What are the best student loans?

Federal student loans and other forms of student financial assistance should be the main options for students to afford tuition and other related college expenses. When federal student loans and federal financial aid have been exhausted, private student loans are the best option. Check our selection and reviews of the best private student loans.

Summary: 6 Best Student Loans of 2021

  • College Ave – Best Overall
  • LendKey – Best Marketplace
  • SoFi – Best for No Fees and Discounts
  • Sallie Mae – Best for Graduate Students and Non-degree Granting Schools
  • Ascent – Best for Borrowers Without a Cosigner
  • Credible – Best for Parents