Student loans are the new normal. When you go to college, it is almost inevitable that you need a private student loan for something. Some students will have to take out loans to afford school, whether it be tuition, textbooks, or even food on campus. This article highlights the best private student loans for December 2021 so that borrowers can find the right one for them!
What are private student loans?
Private student loans are a type of loan that students can take out and federal loans. Banks and other lenders offer private loans and typically have higher interest rates than federal loans.
Private loans may also offer more flexibility in using the money. For example, you may be able to use a private loan for tuition, room and board, or other expenses related to your education.
What are the best private student loans?
There is no one “best” private student loan. However, some lenders do offer better deals than others. Here are five of the best private student loans currently available:
SoFi is one of the most popular lenders for private student loans. They offer low-interest rates and flexible repayment options for all student loan borrowers, including unemployment protection (forbearance) for those who lose their job through no fault of their own and whose loans are in good standing. Interest will accrue during each three-month forbearance period, but you have the option of making interest-only payments during that time.
SoFi is better known for student loan refinancing — however, similar to Earnest, it too launched a private student loan offering in 2019. You could prequalify and check your rate within minutes without affecting your credit. SoFi’s no-fee loans are worth considering, but be aware that half-time enrollment status is an eligibility factor.
Citizen’s Bank offers a range of private student loan products, including fixed and variable interest rates and a co-signer release option. The Bank also provides an interest rate reduction of .25% for borrowers who sign up for automatic payments.
Citizen’s Bank is one of the few lenders that offer private student loans to parents, and it also has a unique repayment option called “Graduation Grace.” This feature allows graduates to make interest-only payments for the first nine months after leaving school, which can help to ease the transition into full-time repayment.
Sallie Mae is one of the country’s largest providers of private student loans. They offer various loan options, including fixed and variable interest rates and competitive interest rates.
Sallie Mae also offers a co-signer release option after 20 consecutive on-time payments, but their application process can be cumbersome compared to other lenders. Be prepared for a lengthy application form with several steps that must be completed in order and an extensive review of your credit history.
Discover Student Loans
Discover Student Loans offers competitive interest rates and no origination fees. They also provide an optional credit life insurance policy that protects the borrower’s creditors in case of death or disability.
Discover Student Loans is a good option for borrowers looking to borrow up to $40,000 per year and want repayment flexibility with no origination fees or prepayment penalties. Borrowers can choose from five different repayment options, including an option that allows borrowers to pay off their loans in as little as two years.
LendKey is a unique private student loan space lender because it partners with community banks and credit unions to offer its products. This gives borrowers access to some of the lowest interest rates on private student loans.
Borrowers can choose from various repayment terms, and there are no origination or prepayment fees. LendKey also offers an interest rate reduction of .25% for borrowers who sign up for automatic payments.
Private student loans may be a good option if you have exhausted your federal loan options and still need money to pay for school. Be sure to compare interest rates and repayment options among different lenders to find the best deal for you.
Wells Fargo offers private student loans with both fixed and variable interest rates. They also offer a co-signer release option after the borrower has made 24 consecutive on-time payments.
Wells Fargo is a good option for borrowers who want to borrow up to $75,000 per year and want the convenience of having a physical location where they can go to speak with someone about their loan. Wells Fargo also offers an interest rate reduction of .25% for borrowers who sign up for automatic payments.
How do I apply for a private student loan?
You’ll need to provide basic information about yourself and your education to apply for a private student loan. You may also need to provide details on the school you plan to attend and proof of income for you and your co-signer (if applicable).
Because private student loans are not guaranteed by the federal government like federal loan programs are, lenders will want a detailed look into your financial situation to approve your application. As part of that process, they’ll likely run a credit check or ask you how much money is coming in each month.
Private student loan lenders also expect borrowers to understand the terms and conditions of their loans, so you’ll want to ensure you fully read through your loan documents before signing.
What should I consider before taking out a private student loan?
When deciding whether or not to take out a private student loan, it’s important to remember that these loans typically come with higher interest rates than federal loans. So it’s essential to make sure you’re taking out a loan for the right reasons and that you’ll be able to afford the monthly payments.
Here are some things to keep in mind for private loans:
Do your research before choosing a lender. There are a lot of different lenders out there, so it’s important to compare interest rates and fees to find the best deal.
Private lenders typically offer smaller loan amounts than federal student loans. So, if you need a large loan to cover your education costs, you may have to turn to private lenders.
Student loan qualifications differ depending on the loan type but can include FICO score and income. Typically, you will need multiple student loans to cover your entire tuition and related expenses. A financial aid counselor from your high school or your future college should be able to help you better navigate the process.
Student loans can be expensive, with application fees and monthly principal and interest payments. They can get costly if you choose to go to grad, medical or law school in addition to a 4-year college. If you have an alternative way to pay for college, it’s great to explore that first.
Don’t take out more money than you need. It’s essential to borrow what you need to avoid wasting too much debt.
Try to pay off your student loans as quickly as possible. The sooner you can pay them off, the less interest you’ll pay overall.
If you’re still unsure whether or not a private student loan is right for you, consult a financial advisor for help.
The best private student loans for December 2021 are the best option. A borrower can get this loan by applying online, but it will be better to use it at least 30 days before their enrollment date to ensure everything goes smoothly and on time. These private student loans are not easy to obtain because there are many things to consider, such as credit score, income status, etc. This will make it easier for the borrower to get this loan as soon as possible and, of course, have a reasonable interest rate. If you’re struggling to make ends meet, some outstanding private loans available at EdFed that can help pay for tuition and other related expenses.