Find a student loan: Compare private student loans, types and rates
Pros and cons: How federal and private student loans differ
How to apply: Wondering where to apply for student loans first?
Options for independent students | |
Remove parents from your student loans quickly | |
College loans in a parent's name | |
Lenders that don't require a full-time class load | |
Funding without a credit score requirement | |
Most lenders require a U.S. co-signer | |
PLUS loans, co-signer and other options |
You apply for a federal student loan by submitting a FAFSA. Taking on a federal loan means you’re borrowing from the government. You apply for a private student loan through a bank, credit union or online lender.
Federal student loans also have flat interest rates set by Congress, while the interest rate on a private student loan depends on your or your co-signer’s credit. Federal loans charge origination fees; private loans typically do not.
Federal student loans offer borrowers protections and alternative repayment options that private loans usually don't, such as income-based repayment and forgiveness programs. The current interest-free loan forbearance does not include private student loans; any future forgiveness offer is unlikely to include them.
Compare offers from multiple lenders including banks, credit unions, online companies and state-based lenders to find the lowest interest rate. Depending on the lender, you may be able to choose a fixed or a variable interest rate. A fixed rate stays the same throughout the life of a loan. A variable rate may start out lower than a fixed rate, but could increase or decrease over time depending on economic conditions.
Consider any borrower protections your private lender offers, including deferment and forbearance, as well as repayment options. You may also have the option to choose your loan term, which means you could pay off your loan faster and with less interest by making higher payments or pay lower amounts with more interest over a longer period of time.
» MORE: How to get a student loan
Each lender will have its own requirements for taking out a loan. With most loans for students, credit score and income are taken into account. Higher scores and incomes tend to get the best rates or higher borrowing amounts. However, since undergraduate borrowers are less likely to have established credit or an income, lenders will usually require students to apply with a co-signer. Some lenders who have loans for borrowers without a co-signer will consider career and income potential.
Lenders will often require you to attend a Title IV school, which means your school processes federal student aid. Some lenders don't offer loans in certain states.
You’ll have a hard time finding a private student loan from a bank, credit union or online lender if you have bad credit. Federal student loans don’t require borrowers to demonstrate creditworthiness, so they’ll be your best option. If you’ve already hit your limit on federal loans, you may be able to get a private student loan if you apply with a co-signer who has solid credit — typically scores in the high 600s or better.
If you have no income and either no credit or bad credit, you’ll need a co-signer to get a private student loan. Without bills in your name, such as a credit card, car loan or utility, you have no way to demonstrate that you can pay bills on time. Your co-signer will need to have a steady income as well as good to excellent credit scores, typically at least in the high 600s. Signing with a co-signer means they’re on the hook for your loan bill if you can’t pay.
Some lenders offer loans exclusively for student borrowers that don't take credit into consideration. Instead, these lenders look at the school you’re attending as well as your income and career potential to determine the amount you can borrow and at what rate.
Each lender will have its own application requirements. You’ll usually need to provide documents that prove citizenship, identity and income along with school attendance and cost information or a financial aid award letter from your college.
As part of underwriting, you or your co-signer will need to show you have a credit score in the high 600s or higher, as well as cash flow to make loan payments. They’ll also look at your or your co-signer’s debt-to-income ratio to make sure you have the funds to pay a student loan bill in addition to any other bills in your name.
The NerdWallet team of student loans experts analyzed reported rates from 24 lenders over a period of 39 months. We considered four variables — average maximum fixed rates, average minimum fixed rates, average maximum variable rates and average minimum variable rates — for each lender on a month-over-month basis.
The average rates as of Mar. 10, 2023, were:
Minimum fixed interest rate - 5.34%.
Maximum fixed interest rate - 13.76%.
Minimum variable interest rate - 5.74%.
Maximum variable interest rate - 13.86%.
Average rates in general have trended upward over the last 12 months, with average fixed rates falling slightly since the previous month.
The reported rates represent lenders' advertised ranges. It's best to prequalify with multiple lenders to ensure you accept the best rate available to you.
Lenders typically offer the lowest rates to those with the strongest financial profiles. Based on our analysis, less than 30% of borrowers are offered the lowest rate. That percentage includes companies that offer all borrowers the same rate. Excluding those companies, less than 18% of borrowers are offered the lowest rate.
Use this chart and data to gauge how your student loan offers measure against typical interest rate ranges.
Learn more about how student loan interest rates are determined, including a history of rate changes through the years. Private student loan interest rates can sometimes be lower than federal rates, but approval for the lowest rates requires excellent credit. If you have good credit, you may be able to refinance existing student loans to get a lower rate.
Among families with college-bound students, 47% think they’ll need to borrow to finance a college education, according to Sallie Mae’s 2022 College Confidence study. Yet just under half of those families identified federal direct subsidized and unsubsidized loans as aid that needs to be repaid, underlining the importance of learning the obligations of the debt you’ve been offered before accepting it.
Additionally, those families with college-bound students aren’t clear on the purpose of the FAFSA; 34% don’t know why someone would submit the FAFSA, and 44% don’t know that it’s for everyone, regardless of income level. If you or your child are considering going to college, familiarize yourself with all of the options available to you to fund that education –– and submit the FAFSA to be considered for the most aid possible.
A 2022 high school graduate who will depend on student loans to pay for college could expect to borrow $39,500 for their bachelor’s degree, according to a new NerdWallet analysis. The share of parents taking out federal parent PLUS loans to help cover the costs of their children's college education has also grown significantly.
For more details, and to learn a number of ways to cut down on the amount borrowed for a bachelor's degree before, during and after college, see the full study here.
Our survey of more than 29 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.
We consider 40 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.
The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.
Read more about our ratings methodologies for student loans and our editorial guidelines.
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