Best Private Student Loans

Ascent’s non-cosigned, outcomes-based student loan uses information such as the borrower’s school, program, and GPA to determine their eligibility. While the interest rates are high, this loan option provides a solution for borrowers that may not qualify for credit-based options.

This makes it an ideal loan for borrowers with no credit and no cosigner, as well as DACA students.

Pros:

• A solid credit history isn’t needed
• Flexible repayment terms
• No minimum income requirement
• Up to 1% auto debit discount
• 1% cash back graduation reward

Cons:

• Much higher interest rates than some credit-based loan options

Ascent also offers two other loan options:

• Cosigned, Credit-Based Loan: Best for borrowers with a cosigner
• Non-Cosigned, Credit-Based Loan: Best for borrowers with a high credit score but no cosigner
• Bootcamp Loan: Best for borrowers attending an online bootcamp program

Brazos is a non-profit lender providing student loans to Texas residents. While they’re only available to Texas residents, they offer highly competitive interest rates and flexible repayment options.

Pros:

• Highly competitive interest rates
• 0.25% auto debit discount
• Flexible repayment options

Cons:

• Only available to Texas residents
• Must be enrolled at least half-time; not available to part-time students

Brazos’s interest rates are often lower than federal student loan interest rates. However, Brazos still recommends borrowing federal student loans first because of their protections and potential for forgiveness.

College Ave is an online lender that offers undergraduate, graduate, and parent loans, plus student loan refinancing. Their loans come with competitive interest rates and flexible repayment options, but a strict cosigner release policy.

Pros:

• Competitive interest rates
• 0.25% auto debit discount
• Flexible repayment options
• Available to part-time students

Cons:

• Not available to international students without a U.S. social security number
• Half of the repayment term must be complete to release a cosigner

College Ave requires borrowers to have a minimum income of at least $35,000 per year to qualify. If you don’t meet that threshold, consider adding a cosigner to the loan.

The Custom Choice LoanⓇ powered by Cognition Financial offers competitive interest rates and flexible repayment terms of 7, 10, and 15 years. They stand out from competitors because of their 2% principal reduction upon graduation. For example, a $30,000 loan could have $600 removed from the principal balance with proof of graduation.

Pros:

• Competitive interest rates
• 0.25% auto debit discount
• No fees
• Principal reduction of 2% upon graduation

Cons:

• Maximum borrowing limit is lower than some other lenders

Custom Choice is sponsoring a $1,500 scholarship every month until December 31, 2023, which provides an added benefit for borrowers.

Discover offers a straightforward student loan option with competitive interest rates and cash rewards for good grades. However, they only offer one repayment term, and they don’t offer an immediate repayment plan option.

Pros:

• 0.25% auto debit discount
• No fees
• Rewards for good grades

Cons:

• Only offers one repayment term of 15 years
• No immediate repayment option
• Hard credit check required to assess eligibility

Unfortunately, Discover doesn’t offer prequalification. This means that if you decide to apply, they’ll need to conduct a hard credit check, which will temporarily impact your score. It’s best to only apply if you are confident you meet or exceed the criteria to qualify.

Earnest offers a student loan with competitive interest rates, flexible repayment options,  and a 9-month grace period — which is longer than most competitors. They also offer the option to skip one payment every 12 months, although this should only be done if necessary.

If you qualify for a lower interest rate with a competitor, Earnest will match the rate and give you a $100 Amazon gift card once your rate match is complete.

Pros:

• Competitive interest rates
• 0.25% auto debit discount
• 9-month grace period
• Several repayment term options
• Rate match guarantee

Cons:

• Hard credit check required to assess eligibility
• Loans are not available in Nevada

Earnest doesn’t offer prequalification, so you’ll need to submit a formal application to see if you qualify.

Funding U provides a viable solution for borrowers with no credit history that can’t qualify with other lenders. However, they only work with a select number of schools, offer just two repayment options, and have only one repayment term.

Pros:

• No cosigner or credit history needed
• No fees or penalties

Cons:

• Interest rates are higher than some competitors
• Loans aren’t available in 14 states
• Smaller loan maximum than most competitors
• No variable interest rate option
• One loan term
• Payment is required while in school and during the grace period

Funding U’s loan is ideal for borrowers without a cosigner, but it isn’t particularly impressive otherwise. Unless you can’t qualify with another lender, it might be best to look elsewhere.

MPOWER offers a non-cosigned, non-credit-based student loan that uses factors such as future income potential to assess the borrower’s eligibility. This loan is ideal for international and DACA student borrowers, however, it likely won’t be the best loan on the market for other students.

Pros:

• Borrowers are assigned a dedicated student loan advisor
• 0.25% auto debit discount
• Available to international and DACA students
• No cosigner or credit history required

Cons:

• Interest rates are significantly higher than most competitors
• Offers only one repayment term of 10 years
• Payment is required while in school

MPOWER partners with Zolve to ensure all borrowers prequalify for a U.S. credit card and bank account. That way, payments made on an MPOWER student loan build credit history within the U.S.

Sallie Mae offers a simple, straightforward student loan option that’s available to full-time, part-time, and DACA students. They offer competitive interest rates, flexible repayment options, and the option for cosigner release.

Pros:

• Competitive interest rates
• 0.25% auto debit discount
• Available for DACA students
• Cosigner release after 12 months of on-time payments

Cons:

• Hard credit check required to assess eligibility

To release a cosigner from a Sallie Mae loan, the primary borrower must demonstrate a sufficient credit history and the ability to assume full responsibility for the loan. So, even if you’ve met the minimum payment requirements, there will also be other requirements to meet.

SoFi offers a student loan option with competitive interest rates, flexible repayment terms, and significant benefits and discounts. For example, SoFi members are eligible for an additional 0.125% discount for multiple loans — which is especially helpful for parents cosigning for more than one child.

Pros:

• Competitive interest rates
• 0.25% auto debit discount
• No fees
• Cosigner release after 12 consecutive, on-time payments
• Additional discounts for SoFi members

Cons:

• Doesn’t offer biweekly payments via autopay

SoFi offers borrowers additional perks like career coaching, financial planning, exclusive online experiences and events, and premium rates on travel.