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3 best banks for student loans
Pay for college or refinance with one of these trusted financial institutions.
Federal student loans are often the first choice for many borrowers, but they may not be able to cover all of your expenses. In this case, you’ll want to look into your private student loan options. Banks often offer the best rates, but that comes with a price — they usually have stricter credit and income requirements. And if you already have a student loan? Banks offer refinancing options, too.
Our methodology: How we picked these banks
When choosing the best banks for student loans, we first confirmed each lender’s legitimacy, business practices and website security. We also looked at borrower reviews from Trustpilot and the Better Business Bureau.
We then analyzed and considered how the rates, fees, terms and loan amounts compared to both federal loans after Congress raised interest rates and other private student loan providers. We also took the application process, repayment options and borrower perks into account as well.
3 best banks for student loans
Citizens Bank
Citizens Bank may be a regional bank, but it offers both private student loans and refinancing to anyone in the US. The application is relatively easy and can be done entirely online. And you only need to apply once to be qualified for funding for your entire degree.
If you already have a Citizens Bank account, you’ll want to look at this option closely. While it offers a 0.25% rate discount to all borrowers who sign up for autopay, you can get an additional 0.25% off your interest rate if payments come from a Citizens Bank account.
Discover
Discover is the only lender out there that actually offers rewards for good grades — many just require you to maintain a C average to stay eligible. With Discover, you can get a 1% cash reward if you maintain a 3.0 GPA during the time your loan covered.
Both Discover’s student loans and refinancing options come with unusually flexible repayment options, including an early repayment assistance program that lets you hold off on repayments during the first three months of your loan term. It also offers in-school deferment and forbearance if you get laid off or have other unexpected financial problems.
SunTrust
SunTrust offers a catch-all student loan that borrowers can use to pay for school or refinance an existing student loan. You can even refinance student loans before you graduate thanks to its in-school refinancing option — though federal loans aren’t eligible. It’s also one of the few lenders that works with international students, provided they apply with a cosigner who is a US citizen or permanent resident.
Like Citizens Bank, SunTrust rewards loyalty. While anyone can get a 0.25% discount for signing up for automatic payments, you can knock off an additional 0.25% if you pay from a SunTrust account. After you graduate, SunTrust will reduce your loan principal by 1% if you send in a copy of your degree or final transcript.
More student loan options to consider
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How could getting a student loan from a bank benefit me?
While banks might not be as fast as online lenders, you can often get a better deal — and know exactly who you’re working with. Here are a few reasons why you might want to consider a student loan from a bank:
- Competitive rates. Because banks are typically more established than most online lenders and can afford to offer lower rates, you could end up with a much more competitive APR — provided you meet the credit requirements or have a qualified cosigner.
- Less risky. Being established has an additional benefit: There’s less of a chance that a bank will be shut down or stop its student loans program without notice.
- Loyalty perks. Banks tend to value loyalty in a way that other lenders don’t. If you already have an account with a bank, your loan application process could be faster and you could be eligible for loyalty discounts like the interest rate reduction that Citizens Bank and SunTrust offer.
5 mistakes to avoid when getting a student loan from a bank
Watch out for these potential pitfalls when applying for a student loan from a bank:
- Applying without a cosigner. Even if you can qualify on your own, applying with a cosigner that has a stronger credit history can help you get much lower rates. Look for a bank that offers cosigner release so you can take them off your loan once you’re able to match the bank’s credit requirements on your own.
- Not reading over your application. Banks reject loan applications over inconsistencies and mistakes more often than you think. Don’t let a typo get in the way of paying for school. Give your application a once-over before you hit submit.
- Not knowing your credit score. Since some banks require both the borrower and cosigner to meet certain credit requirements, knowing your credit score can help you figure out which bank you’re eligible with. You can check your credit score online for free or request a copy of your credit report from one of the top three credit bureaus: TransUnion, Equifax and Experian.
- Ignoring the turnaround time. Private student loans typically take at least a month to process. If your school has a deadline for financial aid outside of federal aid, make sure you apply well in advance so that your loans can get there in time.
- Letting your grades drop. While Discover is the only bank that rewards good grades, some require you to maintain satisfactory academic standing to be eligible — usually at least a 2.0 GPA.
Bottom line
It can be more difficult to qualify for student loans or refinancing from a bank, but they offer some of the most competitive interest rates around. If you’re not used to dealing with lending, it can be comforting to keep all of your finances in one place — plus, you could get a discount.
Interested in learning about more options? Ready to compare lenders? Check out our guide to student loans to see what else is out there when it comes to financing your education.
Frequently asked questions
Is there a limit to how many student loans I can get?
Many banks set lifetime limits on how much students can borrow, depending on the degree. Some of theses limits include federal loans, while others only include financing from that particular institution. If you need a lot more than what your federal loans can cover, you might want to look for a bank that doesn’t include federal loans in its lifetime limit.
Do banks use servicers?
Some use a third-party company to handle repayments, while others take care of it themselves. It’s not something banks always advertise, so you might have to reach out to your bank to find out how repayments work.
Do banks offer income-based repayment plans?
Generally, no. Most private lenders have standard fixed repayment plans — which can be unaffordable to a new graduate with a high debt load. If you’re concerned about affording repayments right away, look for a bank like Discover that offers more forgiving repayment options that can ease the burden of those high fixed repayments.
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