Pay for college or refinance with one of these trusted financial institutions.
3 best banks for student loans
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 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 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 refinance 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 principle by 1% if you send in a copy of your degree or final transcript.
More student loan options to consider
How could getting a student loan from a bank benefit me?
There are several reasons you might want to consider a bank for a student loan instead of an online lender. While it might not be as fast, you can often get a better deal — and know exactly who you’re working with.
Banks might have stricter credit requirements than other lenders, but if you apply with a qualified cosigner, you could end up with some of the most competitive rates out there. That’s because banks are typically more established than most online lenders and can afford to offer lower rates.
Less of a risk than online lenders
Being established has an additional benefit: There’s less of a chance that it’ll get shut down or stop its student loans program. Online lenders that are relatively new to the scene can stop programs that just aren’t working for them — or could stop giving out loans altogether if they aren’t making enough money.
Banks can 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 quicker since it already has information on your personal finances. You also could be eligible for loyalty discounts like the additional interest rate reduction that Citizens Bank and SunTrust Bank offer.
5 mistakes to avoid when getting 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 for. 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.
It can be more difficult to qualify for banks loans, but they offer some of the most competitive interest rates around. Private student loans and refinancing are no exception. For students and borrowers who aren’t 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? You might want to check out our student loans guide to see what else is out there when it comes to financing your education.