3 best banks for student loans

3 best banks for student loans

Best for parent loans

• Starting APR: 1.03% to 10.24%
• BBB Score: A+
• Multi-year applications
• Up to 0.5% in rate discounts

Best for students with good grades

• Starting APR: 6.62% to 10.37%
  
• BBB Score: A+
• Bar exam and residency loans
• Multiple repayment plans

Best for graduate and MBA programs

• Starting APR: 4.75% to 9.41%
• BBB Score: A+
• International students OK
• Reward for graduating

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.

• Citizens Bank private student loans

  Citizens Bank offers private student loans for undergraduates and graduates, as well as parent student loans. Its graduate loans can cover costs that federal loans won’t, like paying for a bar exam course or relocating for a medical residency.

  You’re limited to a total of $90,000 for undergraduate student loans and $295,000 for graduate student loans, however. And not all schools are eligible, so you’ll need to check that yours is on the list before you apply.

  • Starting APR: 1.03% to 10.24%
  • Loan amounts: $1,000 to $295,000
  • Loan terms: Up to 15 years
  • Eligibility requirements: Age of majority in your state, enrolled at least half time at an eligible school, good credit or a creditworthy cosigner, US citizen or permanent resident
  • Cosigner: Yes
  • Repayment options: In-school deferment or interest-only repayments

• Citizens Bank student loan refinancing

  Citizens Bank offers student loan refinancing for both students and parents. You don’t need to have a degree to qualify, and you have the option of applying with a cosigner to get a better deal. Citizens Bank even lets you apply to take your cosigner off your loan after making 36 on-time repayments in a row.

  The lowest rates go to borrowers with a graduate or professional degree with a shorter loan term.

  • Starting APR: 2.63% with autopay and loyalty discount
  • Loan amount: At least $10,000
  • Loan terms: 5, 10, 15 and 20 years
  • Eligibility requirements: At least $10,000 in student loans, US citizen or permanent resident
  • Cosigner: Yes
  • Repayment options: Fixed or variable repayments

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.

• Discover private student loans

  Discover offers a wide variety of private student loans, including loans for undergraduates, graduate students, health professionals, MBA students, law students, bar exam costs and medical residency relocation. Rates and how much you can borrow vary by degree, though you may qualify for having 100% of your educational expenses covered.

  • Variable APR: Variable APRs: 1.79% to 11.09%
    Fixed APRs: 3.99% to 11.59%
  • Loan amount: $1,000Cost of attendance
  • Loan terms: Up to 15 years
  • Eligibility requirements: Enrolled at least half time at an eligible school, seeking a degree, satisfactory academic progress, US citizen or permanent resident or international student, ages 16+
  • Cosigner: Yes
  • Repayment options: In-school deferment or minimum payments of $25, as well as payment assistance, deferment and forbearance options

• Discover student loan refinancing

  Discover’s student loan refinancing might work best for professionals with a credit history. While you can apply with a cosigner to get better rates, you need to meet all eligibility requirements on your own. You also can’t refinance loans that aren’t attached to a degree program, so look elsewhere if you have student debt from paying for residency costs or bar exams.

  Still, its repayment options are much more flexible than what you’d get with other providers and could be reason enough to go with Discover.

  • Starting APR: 6.62% to 10.37%
    with autopay
  • Loan amount: $5,000 to $150,000
  • Loan terms: Up to 20 years
  • Eligibility requirements: US citizen or permanent resident, US address, ages 18+, good credit standing, no more than $150,000 in student debt, verifiable income, primary borrower on all loans up for consolidation
  • Cosigner: Yes
  • Repayment options: Fixed or variable repayments with payment assistance, deferment and forbearance options

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.

• SunTrust Custom Choice Loans

  Custom Choice Loans

  • Starting APR: 3.501%
  • Loan amount: $1,001 to $150,000
  • Loan terms: 7, 10 or 15 years
  • Eligibility requirements: Enrolled at least half time at a Title IV school, US citizen or permanent resident, ages 17+, not a resident of Iowa or Wisconsin, strong credit
  • Cosigner: Yes
  • Repayment options: Immediate full repayments, interest-only repayments, partial repayments or full deferment while in school and during the six-month grace period after leaving school

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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

9 benefits of getting a college degree

A college degree doesn’t hold the same value it did 50 years ago. But it still has benefits for both your career and transitioning into adult life. Here’s why you might want to go for more education after high school.

1. Open doors for more job opportunities. Only 36% of jobs in 2018 were available to candidates who went straight into the workforce from high school, according to a Georgetown University study. Some 65% of jobs required a post-secondary degree.
2. Up your earning potential. Bachelor’s degree holders earn an average of $82,680 a year, while workers with only a high school degree earn an average of $49,192, according to a 2019 study by the US Bureau of Labor Statistics. That’s a $33,488 difference.
3. Make lasting connections. College is a great time to form friendships and career connections you can carry with you after you graduate. Your professors can introduce you to experts in your field that can help you find internships and potentially even a job after graduation. And you can also take advantage of your school’s career development office and alumni network to get your job application into the hands of the right employer.
4. Take time to develop a career path. Unless you enroll in a specialized program like education or nursing, attending college gives you the opportunity to explore disciplines you might not otherwise spend time learning about. Many programs have core requirements across a variety of subjects that could potentially help you figure out what you actually want to do.
5. Develop a well-balanced set of skills. Employers tend to favor candidates with strong communication skills: Active listeners who can articulate their ideas well and have high reading comprehension. Critical thinking is also highly useful. These are all skills college professors help you nurture and develop through taking notes, making class presentations and writing term papers.
6. Learn how to manage your time. Those first finals can feel like a blow, but they’ll help you learn a vital life skill no matter what career path you choose: time management. When you have three papers due and a test on the same day, you need to plan ahead to succeed.
7. Get support for a new business. More and more schools have started offering student entrepreneurs support to start a new business while earning a degree. Going to a school with an incubator program can up your chances of getting accepted while offering resources you might not have as a solo entrepreneur.
8. Explore the world. College study abroad programs are one of the few times you can immerse yourself in another country, culture and language without making a risky career move, like quitting your job to move to Thailand for six months. With opportunities to live with host families and experience another education system, these programs can teach you things you wouldn’t learn in the states.
9. Take time to transition into adulthood. College gives you the opportunity to transition into adulthood and explore new ideas about the world and yourself before starting a job. It can be a great opportunity to find yourself when you aren’t sure what you want to do. These experiences are difficult to put in numbers.

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.