Borrow smart and affordably for your college education.
Nobody enjoys figuring out how to pay for school or dealing with student debt. Unless you get a killer scholarship or qualify for forgiveness, your loans aren’t going anywhere. But you don’t have to sacrifice your financial future to pay for an education.
We walk you through how student loans work — from borrowing while in school to repaying to refinancing down the road. Use our guide to find the best financing option for you.
We make it easy for you to narrow down your options and know what to expect every step of the way.
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Compare top student loan providers
Why trust us?
Our writers and editors thoroughly research the student loan providers you read about on this page. Some of us are repaying student loans now, so we can relate to your anxiety firsthand. While we make money from our partner loan providers to grow our company and expand our content, we hold strict editorial guidelines to ensure that information is accurate and objective. Learn more about how finder works on our About Us page.
Getting a student loan while in college
3 top private student loan providers
Best for business students
- Starting APR: 3.05% (variable)
- BBB rating: B
- MBA student discount
- Donates to charitable causes
Best for getting multiple quotes
- Starting APR: 3.69% (variable)
- BBB rating: A+
- Check personalized rates at no cost
- No origination fee
Best for easy approval
- Starting APR: 3% (As low as)% (variable)
- BBB rating: A-
- Lots of educational resources
- Funding for Associate’s degree
What type of student loan should I get?
You have two options when you’re looking for a loan to pay for school: Federal loans or private loans.
- Federal student loans are funded by the government, which sets interest rates each year and offer flexible repayment plans.
- Private student loans are funded by providers like banks, credit unions and online lenders, which charge a range of interest rates based on your creditworthiness.
Typically, both private and federal lenders recommend that students apply for federal loans first, since they often have lower interest rates than federal loans and more forgiving repayment options. However, there is a limit to how much federal funding you can qualify for — and how you can use it.
Interactive quiz: What type of student should I get?
Take our four-question quiz to get a quick recommendation on which type of student loan might be best for your needs. Or read our summarized recommendations below.
- Have good to excellent credit
- Are enrolled in school at least half-time
- Reached your limit for federal loans
You might benefit from private student loans.
Federal student loans might not be able to cover all of the costs associated with your education. You might want to look into borrowing from private student lenders to pick up where federal loans fall short.
- Have good to excellent credit
- Need to finance bar study or relocate for a residency
- Haven’t reached your limit for federal loans
You might want to look into both federal and private financing.
It’s possible you might benefit from federal loans before you turn to private lenders. But it’s also possible they won’t cover all of your expenses. Consider talking with your school’s financial aid office to set up a meeting to discuss your next step.
- Have bad or no credit
- Are enrolled in school part-time
- Haven’t reached your limit for federal loans
Consider federal loans or other financial aid.
You might find it difficult to qualify for a private student loan. Federal student loans and other forms of financial aid, like scholarships and grants, might be a better option for your particular situation.
How federal and private student loans work
Federal student loans generally attract lower interest rates than private student loans, but there’s a limit to how much you borrow and what you can use it for. Students typically turn to private student loans after they’ve maxed out their federal loans.
Federal student loans tend to be a first choice because they come with benefits like loan forgiveness programs, flexible repayment schedules, extended terms and multiple repayment options.
Here’s how federal loans stack up against private loans.
|Federal student loans||Private student loans|
|Purpose||Education-related expenses directly related to school||Education-related expenses, including some postgraduate costs|
|Who it’s best for||Any eligible student||Students who’ve already used up their federal loans, can’t qualify for federal loans or have postgraduate expenses, like bar study courses or residency relocation|
|How disbursement works||Funds go directly to your school, which forwards to you any remaining funds after paying school fees||Funds go directly to your school, which forwards to you any remaining funds after paying school fees|
You or your cosigner must:
|APR||Fixed APR of 3.67% to 6.31%, depending on the student and loan type. Congress set the rates for new student loans each year||Varies, though APRs can reach 16% or more, depending on the lender|
|Cosigner||Not required for most federal loans, with the exception of Direct PLUS Loans||Required for students who are younger than 18 and don’t meet the lender’s credit, income or legal residency requirements|
|Academic requirements||Satisfactory academic progress while enrolled, based on your school’s standards||None|
||Varies by lender, though many let you borrow up to 100% of your school’s tuition and fees|
|When repayment starts||Usually six months after leaving school, though some come with the option of starting full or interest-only repayments immediately||Six months after leaving school, or immediately with full or interest-only repayments|
How do I find a competitive private student loan?
Ask yourself the following six questions when comparing student loan options.
What's a cosigner and do I need one?A cosigner is another individual — usually a parent or relative — who signs your loan documents with you. Cosigners essentially act to reassure the lender that it’ll get its repayments on time.
Many lenders recommend — or sometimes require — undergraduate borrowers to apply with a cosigner. But you might want to consider a cosigner even if it isn’t required. That’s because most lenders have minimum credit requirements that most college students can’t meet — usually a minimum credit score of at least 600 and a debt-to-income ratio below 43%.
Cosigners and automatic default
If you’re applying with a cosigner, it’s highly important that you read the terms and conditions of your loan. It used to be fairly common for lenders to include a clause in the contract that said the loan would go into automatic default if your cosigner declares bankruptcy or dies.
Most lenders have revised their contracts to exclude this law after a Consumer Financial Protection Bureau report brought this issue to light in 2016, but it’s possible that some have not.
How do I apply for a private student loan?
While the application process can vary from lender to lender, many follow a similar process. Before you start your application, make sure you have all of the documents you need on hand. Common documents include identification, proof of attendance at your school (like an admissions letter) and a letter detailing your financial aid award from your school.
Applications also vary depending on how they treat cosigners. Depending on your lender, you might have to fill out your application with your cosigner, or they might have separate applications to themselves. Some lenders even require borrowers to meet credit requirements themselves and only allow cosigners to help them qualify for more competitive interest rates.
After your finish your application, make sure to read it over before hitting submit — making a mistake is an easy way to get rejected.
Applying through a marketplace or connection site
Don’t have time to compare lenders on your own? To cut down on the work of finding a private lender, some students prefer to use connection sites instead of doing the research themselves.
These typically ask you a few questions about where you’re going to school and how much you need to borrow before presenting you with several private lenders you might qualify for. Some also run a soft credit check on you and your cosigner and give estimates on potential rates, terms and monthly repayments.
These sites might save you time, but you generally won’t get the full picture of lenders that are out there. That’s because they make their money off of commission from lenders, who pay to have potential borrowers directed to their site. There’s a chance that there’s a lender out there that offers more competitive rates — perhaps a local nonprofit — that won’t show up in any of your searches.
But, if you’re short on time and research isn’t an option, a connection site could help you quickly scan potential rates and lenders so you can make a more informed choice than going with the first name that comes up on a search engine.
Alternative ways to pay for school
Student loans aren’t the only way to pay for college. If you’re not certain you want a student loan, look into these financial aid alternatives.
Grants and scholarships
The federal government, state governments, schools and corporations offer grants and scholarships to students that you typically don’t have to repay.
Grants tend are often based on need, meaning they’re available to students who can demonstrate financial hardship. Scholarships are usually merit-based, awarded for high grades or doing well in a specific field like sports or dance.
Outside of need and merit, you can find both scholarships and grants for members of underrepresented groups, members of the US Armed Forces, veterans and specific career paths.
Because it’s rare for grants or scholarships to cover your full tuition, they’re most often used in combination with other financial aid. Popular federal grants include Pell Grants, SMART Grants, the Federal Supplemental Educational Opportunity Grant (SEOG) and the Academic Competitiveness Grant.
Part-time job or side gigs
You likely can’t cover the cost of tuition with most part-time jobs. But you might be able to cover part of your housing, textbooks and pocket money. Bonus points if you find a job in your field to get a head start on your career.
Don’t have time for that kind of commitment? Take on side gigs when you have the time. These gigs might not always cover your entire rent, but they can keep more money in your pocket.
You can use a personal loan to pay for college, though you might not want to foot the entire bill with one. Personal loans are typically better for covering extra costs like flying back home for the summer, relocating for an internship and similar expenses that come with being in school.
You can typically borrow between $2,000 and $100,000 with rates that compare to private student loans. However, you often need good credit to qualify, and cosigners aren’t always allowed. Repayments also start immediately.
Income share agreement (ISA)
Schools are starting to offer income share agreements as an alternative to student loans. With an ISA, your school agrees to front you a fixed amount of money from a private investment account or college endowment to apply toward your expenses. In turn, you agree to pay a percentage of your post-college income over a fixed time — typically 10% to 20% of your income over a fixed period of time, typically around 10 years.
It works because investors in the private accounts or endowments from which your ISA is funded stand to earn money. Depending on the salary you ultimately land after school, you could end up paying back more than twice as much as your fronted amount. However, ISAs can be a good deal for students who anticipate lower incomes in the first years after leaving school.
Estimate how much you expect to earn in your career. The higher salary your anticipated salary, the more you’ll repay to the ISA. Still, it might be worth the freedom from typical student debt saddling most college graduates.
Just some of the top student loan providers we’ve reviewed
Refinancing your student loans
Benefits of refinancing
Simply put, student loan refinancing means taking out a new loan to replace your current one. Refinancing can help you save now and in the future by reducing your interest rate, changing how much time you have to repay your loan or reworking the terms of your debt.
Refinancing with a lower APR can help you save on your total loan cost by reducing how much you pay in interest and fees.
Refinancing with a longer loan term can reduce your monthly repayments by extending the time you have to pay off your debt.
Note that longer loan terms can increase how much interest you pay in the long run. You might want to look for loan with both a lower APR and longer term if you’re interested in lowering your monthly repayments.
Generally, you’ll need good credit and a steady income to qualify for a refinancing loan with low rates. If you refinance a federal loans with a private lender, you could lose federal benefits that include income-driven repayment plans and loan forgiveness.
When it’s best to refinance student loans
You’ve probably seen ads online about student loan refinancing being a smart financial move. But is it the right choice for you? Here’s our take based on three likely scenarios you may fall in:
If you have…
- Private — or both private and federal — student loans
- A steady full-time job
- Excellent credit
You could benefit from refinancing your student loans.
You might be able to qualify for student loan refinancing with more favorable rates and terms than your current student loan. Your credit score is solid, and you have a strong, steady source of income to make you a strong applicant.
Think carefully about refinancing if you have federal student loans: You could stand to lose key benefits like forgiveness programs and term extensions. Try working with your federal loan servicer to optimize your rates before refinancing.
If you have…
- Private — or both private and federal — student loans
- A new job
- Fair or better credit
- More student debt than annual income
You could benefit from refinancing, but will likely need a cosigner.
There’s a chance you could qualify for refinancing on your own. But taking on a cosigner with stronger credit, less debt or a longer work history might strengthen your application, resulting in stronger refinancing terms.
Got federal loans? Think carefully about refinancing. You could be giving give up valuable benefits. Try working with your federal loan servicer to adjust your loan terms before looking into refinancing.
If you have…
- Federal student loans only
- Bad credit
- More student debt than annual income
You might want to hold off on refinancing for now.
You might want to wait until you have a stronger credit score, a higher income or more work experience before considering refinancing.
Because you have federal loans, you might not be able to get much out of refinancing. Federal loans tend to attract lower interest rates than private loans, and by refinancing you’ll lose access to several benefits that could help make your student loan debt more affordable. Consider working with your loan servicer to change the terms of your loan.
Can I refinance my federal loans?
You can, but it might not be the best idea. When you refinance your federal loans with a private lender, you give up several benefits that include loan forgiveness for teachers and public servants, deferment programs for healthcare and legal professionals and flexible repayment plans.
Federal loans also generally come with some of the lowest interest rates out there — rates that are fixed by the federal government. Chances are, you might not be able to find a better deal with refinancing. Talk to your loan servicer to explore your options before turning to refinancing for federal loans.
Refinancing Parent PLUS Loans
Refinancing federal loans generally isn’t a good idea but for one exception: Parent PLUS Loans. These loans tend to attract higher rates than other federal options.
You can refinance a Parent PLUS Loan in your name or your child’s name. Refinancing in your child’s name can help build their credit and release you from their student debt, improving your personal debt-to-income ratio.
Repaying student debt — debt repayment plans
What happens after I take out a student loan?
Watch our short video explaining your different repayment options or read more below.
Unlike other types of debt, student loans come with several repayment options. Immediately after you take out your student loans, you might start making full repayments, interest-only repayments or none at all if you’re lucky enough to get a direct subsidized federal loan.
When your funds are disbursed
What happens after you take out your student loan depends on the type of student loan you have.
After you graduate or drop under half-time studies
Six months after leaving school and beyond
What’s a loan servicer?
Loan servicers are companies that lenders hire to manage your loan repayments in exchange for a portion of the profits. They’re essentially middlemen between you and your lender that take a percentage of your interest as payment. The federal government uses loan servicers for all of its loans, but some private lenders use servicers as well.
When you make a loan repayment, choose a repayment plan or ask for deferment or forbearance, your loan servicer — not your lender — is your point of contact.
You don’t get to choose your servicer, and they won’t always reach out after your loans are due. If you’re not sure who your loan servicer is, find it through the National Student Loan Data System.
Income-based and other repayment plan options
When you start making repayments, you might have a choice between several different repayment plans. These can include monthly repayments that stay the same throughout the life of your loan, or repayments that better fit an earning curve as you start your career.
Federal repayment plan options
- Standard repayment plan. Pay fixed monthly payments with a maximum term of 10 years for each loan or 30 years for a consolidation loan. Compared with other repayment plans, you typically pay less overall but more each month.
- Graduated repayment plan. Payments start low and increase every two years or so with a term of up to 10 years or 30 years with a consolidation loan.
- Extended repayment plan. Extend your loan term for up to 25 years with either fixed or graduated payments. If you have a direct or FFEL Loan , you must owe more than $30,000 in student debt to be eligible.
- Revised pay as you earn repayment plan (REPAYE). Each year, your lender calculates your monthly repayments to reflect 10% of your expected post-tax income, including your spouse’s income. If you haven’t paid off your loan in 20 or 25 years, your loan’s balance is forgiven.
- Pay as you earn repayment plan (PAYE). Monthly repayments change each year to reflect 10% of your post-tax income, and your loan is forgiven after 20 years if you haven’t yet paid it off. The difference from REPAYE is that calculations only consider your spouse’s income and loan debt if you file joint taxes.
- Income-based repayment plan (IBR). Monthly repayments of 10% or 15% of your post-tax income are calculated each year. Calculations only consider your spouse’s income and debt if you file a joint tax return, and your outstanding balance is forgiven after 20 to 25 years (though you might pay income tax on the forgiven amount).
- Income-contingent repayment plan (ICR). Monthly repayments are the lesser of 20% of your post-tax income or what your monthly payment would have been with a fixed-payment 12-year loan. Calculations only consider your spouse’s income and debts if you file joint taxes. If you haven’t fully repaid your loan over 20 to 25 years, your loan’s balance is forgiven (though you might pay income tax on the forgiven amount).
- Income-sensitive repayment plan. Monthly repayment amounts are based on your income with terms of up to 15 years.
Private repayment options
Private repayment options generally aren’t as flexible as student loan providers. But you can typically opt for a standard plan with fixed monthly repayments or an income-based plan.
Ask your provider or servicer about your repayment options — they aren’t always forthcoming about your options until after you’ve struggled to make a few repayments.
Other repayment options
Life happens. You might that you’re unable to make repayments on your loan, even if you’re on an income-based plan. Or maybe you want to let your cosigner off the hook to lower their overall debt load.
Some of the options you might come across for repayments include:
- Forbearance. If you lose your income, are part of a military deployment or simply want to return to school, you might be able to pause your student loan repayments. How long and often you can go into forbearance depends on your loan and lender, but expect interest to continue adding up.
- Deferment. Like forbearance, you can apply to pause your repayments for a legitimate reason. But your interest doesn’t accumulate while you’re in deferment. Some private lenders refer to a loan’s six-month grace period as deferment but don’t offer it after you’ve started making repayments.
- Cosigner release. You can release your cosigner from most student loans after consistent on-time repayments for a specific time — usually a few years. After your cosigner is released, you’ll be fully responsible for your debt.
- Consolidation. You can consolidate your debt at any time. But you’ll want to make sure it’s more affordable than what you’re currently paying. With consolidation, you take out a new loan — preferably with more favorable terms — to pay off your student debt. You then repay your new loan with one monthly payment.
Understanding interest capitalization
Both federal and private student loans can include interest capitalization, adding accrued interest to your loan balance. The most common time for interest capitalization is with a change in your repayments — at the start of repayments deferral or forbearance. Some private lenders also capitalize interest annually or quarterly.
Firsthand experiences of finder team members
Anna chooses a repayment plan for her federal loans
Anna was lucky: She got a free ride for college and graduated without any student debt. But when it came to graduate school, she didn’t have nearly as many financing options. By the time she completed her MA, she’d accumulated more than $39,000 in federal unsubsidized student loans.
By the time she needed to choose a repayment plan, she was the proud holder of a BA in creative writing and an MA in Middle Eastern studies — not exactly degrees that get you a high-paying job. The job she’d land at a newspaper in Beirut paid even lower salaries than its American counterparts.
Anna found income-based repayment plans too complicated — paying taxes alone was going to be a nightmare — and so she signed up for the graduated repayment plan offered by her servicer, Great Lakes. Repayments started at an affordable $208 per month for the first two years. And by the time her payments increased, she’d already landed a writing gig that paid significantly more.
Andy negotiates a better deal on private student loans
Andy graduated from college with $62,000 in private student loans from Sallie Mae. He moved to New York a month after graduating, hoping he’d be able to afford the $800 monthly repayments that came with Sallie Mae’s standard repayment plan.
After his grace period was up, he wasn’t making enough money to afford that kind of repayment, and so he deferred it for another six months. By the time his second grace period was over and he still couldn’t afford repayments, Sallie Mae began calling him and his parents — his cosigners — daily to demand repayments.
After spending hours on the phone detailing his financial situation, Andy ultimately convinced Sallie Mae to switch him to an income-based repayment plan. Two key factors played into Sallie Mae’s decision: Andy’s parents had recently divorced, significantly changing the way it assessed his financial status, and his loan was in serious danger of defaulting.
By the time it was all over, Andy has reduced his monthly repayments to $301 until 2019, when Sallie Mae will reassess his income.