7 Best Private Student Loans of July 2026

01/07/2026 Money Finance Comments (0)

Key Takeaways

  • Overview: The best student loan lenders include Earnest, Sallie Mae and SoFi. But several well-regarded lenders offer very similar products, so it’s critical to shop around. Some lenders excel at serving particular types of students or offer unique perks that may matter to you.
  • Editor’s take: Undergraduate students should always max out federal student loans before turning to private options, which tend to be more expensive and offer fewer protections. Parents with strong credit can often qualify for better terms in the private market than those available through federal Parent PLUS loans.
  • Methodology: Money reviewed loan products from 14 lenders, evaluating interest rates, fees, repayment terms, borrower protections and more.

Private student loans can help you fill in the funding gap after you’ve tallied all your scholarships and grants and maxed out federal student loans. Private student loans are credit based, meaning not every student or parent will qualify. In fact, nearly 90% of undergraduate private student loans have a cosigner since undergraduates are often too young to have an established credit history.

Our top picks for best student loans

The following companies are listed in alphabetical order.


Pros

  • In-school default protection
  • Grace period of up to 12 months
  • Several forbearance options
  • 2% principal reduction after graduation

Cons

  • Lacks the history of more established lenders so customer reviews are limited
  • Lower lifetime borrowing maximums than other lenders

HIGHLIGHTS

Loan amounts
$1,000 up to total school-certified cost of attendance
Loan terms
5, 7, 10, 15 or 20 years
Fixed APR
2.50% – 16.58%
Minimum credit score
Not disclosed
Minimum income
Not disclosed

Abe, which launched in the summer of 2024, is a new lender in the private student loan space. Like many lenders, Abe allows borrowers to choose whether they want to make in-school payments or defer payments until they graduate. But Abe stands out for its in-school default protection. If a borrower chooses to start repaying while enrolled and ends up falling behind, Abe will automatically switch them to the deferred payment program.

Abe has an option to extend its 6-month grace period up to a full year, and a shorter-than-normal 12-month period to apply for cosigner release. The company also offers some of the most robust — and transparent — hardship protections of any lender. Borrowers can get 12 months of forbearance for a job loss or other financial hardship, natural disaster or illness.

Aside from the autopay rate discount, borrowers can reduce their interest rate by an additional 0.05% for every six months of on-time payments (for a maximum discount of 0.25%). Plus, borrowers can shave 2% off their principal after they graduate through Abe’s Grad Reward.

Pros

  • Loans without cosigners or credit histories available
  • Bigger than normal discounts for setting up automatic payments
  • 1% Cash Back Graduation Reward

Cons

  • First- and second-year students not eligible for outcomes-based loans
  • Lower loan maximums than some lenders

HIGHLIGHTS

Loan amounts
$2,001 to $200,000 lifetime maximum for undergraduate loans, $400,000 lifetime maximum for graduate loans.
Loan terms
Five terms for credit-based loans (5, 7, 10, 12 and 15 years) and two terms (10 and 15 years) for outcomes-based loans
Fixed APR
2.69% – 17.99% (lowest rate includes autopay discount)
Minimum credit score
Not disclosed
Minimum income
$30,000

Ascent is the best option for borrowers without a cosigner due to its specialized non-cosigned loan options for undergraduate, graduate and DACA students. It offers two options for non-cosigned loans — a credit-based option for those who do have a borrowing history and an Outcomes-Based Loan® for those without. These are unique products, but you should know that both options have significantly higher APRs than cosigned loans offered by Ascent (and other lenders). Credit-based loans without a cosigner start at 6.8% for fixed-rate loans; outcomes-based loans with a fixed rate start around 13%. Ascent does have a larger-than-normal discount for setting up autopay, with a 0.50% discount for all credit-based loans and a 1% discount for outcomes-based loans.

For borrowers with cosigners, Ascent offers competitive rates and a quicker 12-month period before you can apply for cosigner release. Other highlights include a 9-month grace period and loan products for career training and bootcamps.

Read full Ascent student loans review>>

Pros

  • Flexible repayment options for parents
  • Very competitive APRs for credit-worthy borrowers

Cons

  • Cosigner release only available after half the repayment term is completed
  • Late fee of up to $25 (several lenders have eliminated late fees)
  • Limited information about forbearance options or hardship protections online

HIGHLIGHTS

Loan amounts
$1,000 to total cost of attendance
Loan terms
5 to 15 years for most loans; up to 20 years for medical, dental and law school
Fixed APR
2.49% – 17.99%
Minimum credit score
Mid-600s
Minimum income
Not disclosed

Like most lenders, College Ave Student Loans offers a suite of undergraduate and graduate loans. But it also offers parent loans that have a customizable repayment term. Parents can choose a term anywhere between 5 and 15 years, which allows you to pick a term that best fits your budget. For borrowers with excellent credit and strong financial histories, College Ave may be a solid choice. The lender regularly offers some of the lowest starting APRs in the industry. But if you have fair credit, you may find better deals elsewhere. College Ave’s maximum APR is among the highest on the market.

Read full College Ave student loan review>>

Pros

  • Longer-than-normal grace period
  • Skip-a-payment program
  • Rate match guarantee

Cons

  • Student must pursue a bachelor’s or graduate degree

HIGHLIGHTS

Loan amounts
$1,000 to total school-certified cost of attendance
Loan terms
5, 7, 10, 12 or 15 years
Fixed APR
2.54% – 16.49% with autopay discount
Minimum credit score
650
Minimum income
None

Earnest offers four in-school repayment options, five terms for all of its loans, and a longer-than-usual grace period. It has a unique skip-a-payment benefit, where borrowers have the option to skip one monthly payment a year without penalty, and it also boasts a rate match guarantee.

Earnest doesn’t charge any fees, and among the lenders we reviewed, it had the highest customer review rating on Trustpilot, with a 4.6 (out of 5 stars) based on more than 7,500 borrower reviews. In May 2026, Earnest introduced a cosigner release program, and it now offers one of the more transparent cosigner release policies on the market. Borrowers can apply for cosigner release after making at least 12 consecutive, full payments, and they’ll have to meet Earnest’s eligibility and credit requirements to be approved. The lender also says it will also automatically review borrowers who paid off half of their principal balance to see whether they’re eligible for release.

Read full Earnest student Loans review>>

Earnest Disclosure

Disclosure

  • 1 Terms and conditions apply. See https://www.earnest.com/referral-terms. The gift card will be emailed to the email address provided on your loan application. Referral bonuses cannot be issued to residents of Massachusetts.
  • 2 Rewards amounts of $600 or greater in a single calendar year may be reported to the IRS as miscellaneous income on Form 1099-MISC. Recipients are responsible for any applicable federal, state, and local taxes.
  • 3 Earnest clients may skip a payment through a single one-month forbearance during a 12-month period. Your first request can be made after at least 6 months of consecutive on-time full principal and interest payments while the loan is in good standing. Interest accrued during the skipped month will increase your remaining minimum payment, and your payoff date will be extended by the length of the skipped payment period. Any unpaid accrued interest may capitalize. Skipping a payment is not guaranteed and is subject to Earnest’s discretion.
  • 4 Some applicants may get approved within 24 hours. Most applicants receive a decision within 48 hours.
  • 5 You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active ACH withdrawal from a checking or savings account. The reduction is available only while your loan remains enrolled in Auto Pay. Interest rate incentives may not be combined with certain repayment programs that also offer rate reductions. For multi-party loans, only one party may enroll in Auto Pay. The 0.25% Auto Pay discount is not available while loan payments are deferred.
  • 6 Actual rate and available repayment terms will vary based on your financial profile. Fixed APRs range from 3.14% to 16.74% (2.89% to 16.49% with Auto Pay discount). Variable APRs range from 5.24% to 17.10% (4.99% to 16.85% with Auto Pay discount). Variable rates are based on the 30-day Average Secured Overnight Financing Rate (SOFR). Earnest Private Student Loans are not available in Nevada. Rates shown were current as of 03/19/2026.
  • 7 Earnest Loans are made by Earnest Operations LLC or FinWise Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917, 300 Frank H. Ogawa Plaza, Suite 340, Oakland, CA 94612. Visit http://www.earnest.com/licenses for a full list of licensed states. Earnest loans are serviced by Earnest Operations LLC with support from MOHELA (NMLS #1442770).

Pros

  • Loans available to international students without a cosigner
  • Interest-only payments while in school

Cons

  • Higher-than-average rates and fees
  • Only one repayment option
  • Must attend a partner school
  • Not available to first- or second-year undergraduate students

HIGHLIGHTS

Loan amounts
$2,001 to $100,000
Loan terms
10 years
Fixed APR
10.89%
Minimum credit score
Not required
Minimum income
Not disclosed

Although some private student loan lenders will issue loans to international students, they typically require the student to have a cosigner that is a U.S. citizen or permanent resident. If the student doesn’t have close friends or family in the country, it can be difficult to find loans for school.

MPower is one of the only lenders that offers private student loans to international students without a cosigner or collateral. The lender offers visa prep courses and a job search tool for international students, and repaying these loans helps international students build a credit-history in the U.S. MPower works with 500 schools in the U.S. and Canada.

Pros

  • Offers career training, medical residency and bar exam loans
  • Cosigner release available after just 12 monthly payments

Cons

  • Limited repayment terms
  • Late fee of up to $25 (other lenders have eliminated this)

HIGHLIGHTS

Loan amounts
$1,000 to total school-certified cost of attendance
Loan terms
10 or 15 years
Fixed APR
2.49% – 17.64%
Minimum credit score
Not disclosed
Minimum income
Not disclosed

Like other lenders, Sallie Mae has education loan options for undergraduate, graduate, professional and medical school programs. But it’s also one of the few lenders that has options for students enrolled in trade or certificate programs. Within the professional programs, it offers loans designed specifically to help borrowers navigate periods where they’re not earning much, like during medical residency periods or when studying for the bar exam. Another unique feature: Borrowers who are enrolled in college less than half-time are still eligible to apply. (Many lenders are open to part-time students, but still require at least half-time enrollment.)

Most top lenders today offer at least three or four different terms for repayment; Sallie Mae only offers two for undergraduate loans and one for graduate school loans. But it does allow borrowers to sign up for a graduated repayment period, where they can make interest-only payments for up to a year after the grace period ends.

Read full Sallie Mae student loan review>>

Pros

  • No late or insufficient fund fees
  • Multiple rate discounts available
  • Extra member benefits

Cons

  • Not available for associate degree programs
  • Must make 24 months of payments before applying for cosigner release

HIGHLIGHTS

Loan amounts
$1,000 to total school-certified cost of attendance
Loan terms
5-year, 7-year, 10-year, and 15-year terms
Fixed APR
2.98% – 15.99% (with 0.25% autopay discount)
Minimum credit score
Not disclosed
Minimum income
Not disclosed

For those looking for a private student loan without added fees, SoFi® is a top lender. Like most student loan lenders, it doesn’t charge origination fees. But SoFi also doesn’t charge any late fees. In addition to the standard discount for setting up automatic payments, existing borrowers can earn a returning scholar discount. SoFi also offers a cash bonus of up to $250 for borrowers who have a 3.0 GPA or higher. And students and parents who borrow through SoFi have access to exclusive member benefits like financial coaching and estate planning, plus a rewards program where you can earn points for activities like checking your credit score and redeem them against your loan.

SoFi’s cosigner release policy — requiring 24 months of on-time payments before applying — is better than some lenders, but there are several lenders that offer shorter periods.

Read full SoFi student loans review>>

What you need to know about student loans

Student loans are issued by the federal government or private lenders to help students pay for undergraduate or graduate studies. The loan goes toward tuition, books, student housing and other education-related expenses.

Once a student loan application is approved, the funds are sent directly to the school to cover tuition, fees and on-campus student housing. Any remaining balance is then disbursed to the student.

All private loans accrue interest from when the loan is dispersed, while some federal loans don’t start accruing interest until you enter repayment. For private loans, in-school repayment options usually include deferment, interest-only or full payment, and repayment terms typically range from five to 20 years.

Federal vs. private student loans

Since private loans don’t offer the same protections that federal loans do, the general advice is to seek private student loans after you’ve exhausted every federal option.

Federal loans

Private loans

Credit Check

Not required for most loans

Required

Minimum income required

Not required

Required

Annual borrowing limits

Borrowing limits apply to most loans

Typically no annual limit

Payments while in schools

Payments deferred until student leaves school

Payments may be required

Eligible for loan forgiveness

Yes

No

Federal student loans

Federal student loans are the first choice for many due to their low rates, flexible repayment options and federal protections.

To apply for federal loans and additional financial aid, students must submit the Free Application for Federal Student Aid (FAFSA) once every school year. Your school will calculate how much you’re eligible to borrow based on the cost of attendance and your family’s financial information.

The federal government limits how much a student can borrow annually and over their lifetime based on the academic year, loan type and the borrowers’ dependency status.

Pros

  • Income-driven loan repayment plan options
  • Opportunities for student loan forgiveness
  • Fixed interest rates that apply to all borrowers
  • Eligible for forbearance if experiencing a financial hardship
  • No credit checks for most loans

Cons

  • Disbursement fees apply
  • Only available to U.S. citizens and permanent residents with Social Security numbers
  • Strict annual and aggregate limits

Private student loans

Private student loans are similar to personal loans, as they are issued by private banks or credit unions.

Private student loan lenders look at students’ credit scores and credit reports to determine interest rates and loan approval. Since most students don’t have enough credit history, lenders often require a qualifying cosigner.

Private loans don’t feature the same benefits as federal student loans, but they can help pay your school’s total cost of attendance if you’re no longer eligible for federal aid.

Most private lenders suggest borrowers start loan repayment while still in school, but most offer in-school deferment or grace periods, although interest will continue to accrue.

Pros

  • Available to U.S. citizens and qualifying international students
  • No financial need requirements
  • Fixed and variable rates
  • Higher loan limits for undergraduate loans

Cons

  • Not eligible for federal forgiveness programs
  • Limited repayment options and hardship assistance programs
  • Requires credit check
  • May have higher APRs
  • Will likely require a cosigner

Student loan interest rates

Current private student loan interest rates range from about 2.5% to 18%. The interest rate on your loans depends on the type of loans you have, your education level and the lender issuing the loan.

Rates can be fixed or variable. Fixed interest rates stay the same for the entire repayment period. By contrast, variable interest rates can change over time, so they are usually best for borrowers who want a shorter repayment term.

Average student loan interest rate

Federal student loans

Interest rates on federal student loans are established by federal law. The rates are fixed, so they stay the same for the duration of your loan term.

For federal student loans, we calculated the average interest rate using the rates for the current academic year. The overall average interest rate for federal student loans is 7.87%.

The rates you’ll pay depend on the loan and borrower type. These are the rates for loans issued for the 2026-2027 academic year, taking effect on July 1, 2026.

  • Undergraduate: 6.52%
  • Graduate: 8.07% for Direct Unsubsidized | 9.07% for Grad PLUS
  • Parent: 9.07%

Private student loans

Private student loans work differently. Lenders set their rate range based on an index, such as the Secured Overnight Financing Rate (SOFR). The rates can change over time as the market fluctuates, so you may find that current rates are higher or lower than when you took out your loan.

Other factors affect your private loan rates, including your credit history, income, debt-to-income ratio and whether you have a cosigner. Looking at the rate ranges advertised by 11 lenders, we calculated the averages: The average fixed rate is 9.50% and the average variable rate is 10.18%. Note that these are only illustrative. They aren’t reflective of the actual average rates offered by lenders.

How to apply for student loans

The following are general tips to consider before applying for student loans, whether federal or private.

Calculate your financial needs

Consider your school’s cost of attendance (tuition, materials, room and board, etc.) and then factor in additional living expenses. Money’s Best Colleges in America contains information about admission, costs, financial aid and graduation rates of hundreds of public and private institutions around the United States.

We recommend you consider federal loans first, as they have several advantages over private loans and a variety of options to choose from.

Shop around for private loans

If you need to take out a private student loan, keep in mind that each lender offers different terms, rates and benefits. They also have different underwriting models, so you may qualify for a lower rate with one lender even if they have a higher starting APR than competitors. That’s why you need to shop around and compare fees and APRs from multiple lenders before making a decision. A good place to start is a marketplace like Credible or LendKey, where you can review rates from several lenders at once.

Tip: Most federal student loans are available without a credit check, so they’re a good option for those with poor credit or no credit history.

Choose the right lender for you

To choose the best student loan, you should have a clear understanding of what each lender requires and what they offer regarding interest rates and repayment options:

  • Check your lender’s credentials: Only do business with reputable lenders. To determine this, use reputable sources like Federal Deposit Insurance Corporation (FDIC), Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB).
  • Apply for prequalification: By prequalifying, you get to see what rates, terms and benefits each lender offers, while avoiding a hard credit inquiry. Be sure to understand how different interest rates and terms affect your payments.
  • Look for lenders with in-school repayment options: Starting loan repayment early will reduce the debt burden. Opt for private lenders with multiple options, a grace period, and no penalties for early loan repayment.
  • Opt for lenders with low or no fees: Application and origination fees are processing costs added to your principal, which means you’ll pay interest on them. All federal loans have origination fees; private loans typically do not. Note that student loan companies are legally prohibited from charging prepayment penalties. If you can, look for lenders that don’t charge late fees either.
  • Take advantage of discounts and perks: Many lenders offer autopay discounts and other perks such as free study or tutoring programs and bonuses for good grades or referring friends.

Latest student loan news

Private student loan companies are starting to launch new products and lower interest rates in a bid to capture new graduate school borrowers in the coming years.

The One Big Beautiful Bill Act (OBBBA) eliminated the Grad PLUS loan program for new borrowers and imposed new federal borrowing caps taking effect that date: graduate students can borrow up to $20,500 a year ($100,000 aggregate) and professional students up to $50,000 a year ($200,000 aggregate).

Private lenders have said they’re ready to step in. College Ave, for example, announced last month a new STEM Graduate Loan for students in science, tech, engineering and math fields. MEFA, a state-based loan authority in Massachusetts, is “enhancing” its graduate school loan options to better serve students pursuing medical, dental and law degrees. Several universities, meanwhile, have announced partnerships with specific lenders, and a few law schools have even launched their own in-house loans to fill in funding gaps.

Best student loans FAQs

What is the interest rate on student loans?

The rate depends on the type of loans you have. For federal loans, the following fixed rates apply for the current academic year: Federal Direct Subsidized and Unsubsidized (for undergraduate students): 6.52%; Federal Direct Unsubsidized (for graduate students): 8.07% and PLUS Loans (for parent borrowers): 9.07%.

With private loans, the rates can be fixed or variable. Fixed rates currently range from around 3% to 18%.

Do you need a cosigner for student loans?

Most federal loans are available without a cosigner, even if you don’t have good credit. For private student loans, students will usually need a cosigner with good credit — such as a parent or relative — to qualify for a loan.

Can you get student loans with bad credit?

If you have bad credit, federal loans are an excellent starting point. Most loans are available without credit checks, and the federal government doesn’t require a minimum credit score.

With private loans, qualifying for a loan may be more challenging. If you have poor credit, you’ll likely need a creditworthy cosigner to apply for a loan.

What is the best private student loan lender?

There is no singular best lender for all borrowers. The best lender for you will depend on your (or your co-signer’s) credit history and current finances, what type of degree-program you’re pursuing and how much you value different perks.

Best student loans methodology: How we picked our winners

We reviewed 14 private student loan lenders, evaluating them on more than 20 factors. We prioritized private lenders that offered the following:

Flexible repayment options

Federal student loans have several different standardized payment plan models, whereas private lenders often offer less flexibility. We looked for lenders that offered multiple in-school payment options. We compared the variety of repayment term lengths, favoring lenders with four or more term options, as the length of your term influences your interest rate and monthly payment, we believe that more options for a more customizable loan is valuable. We also considered whether lenders offered cosigner releases and how long a borrower had to wait before applying.

Competitive interest rates and low fees

We preferred lenders that balanced low starting rates for the most credit-worthy borrowers with still reasonable rates for borrowers with fair credit. In this case, we primarily looked for lenders with rates starting at or below 4% and maxing out around 15%, though we did make some exceptions. Private student loan lenders rarely charge origination or application fees. But some do charge late fees or insufficient fund fees. We gave points to lenders that waived these.

Unique perks, discounts or specialized products

Lenders often specialize in products for specific programs or populations of students, or they offer unique perks and discounts. These helped us identify stand-out lenders that offered something beyond competitive rates and repayment terms.

Borrower protections

As an industry, private student loans lack the consumer protections offered via federal loans, so it’s critical for borrowers to understand their options to reduce or pause payments should they run into problems paying. Forbearance policies vary from lender to lender, and it can sometimes be hard to find clear information about them when shopping around. We favored lenders with transparent policies on their websites and options to defer payments for up to a year, at a minimum.

Summary of Money’s Best Student Loans of July 2026

Key Takeaways

Overview: The best student loan lenders include Earnest, Sallie Mae and SoFi. But several well-regarded lenders offer very similar products, so it’s critical to shop around. Some lenders excel at serving particular types of students or offer unique perks that may matter to you.
Editor’s take: Undergraduate students should always max out federal student loans before turning to private options, which tend to be more expensive and offer fewer protections. Parents with strong credit can often qualify for better terms in the private market than those available through federal Parent PLUS loans.
Methodology: Money reviewed loan products from 14 lenders, evaluating interest rates, fees, repayment terms, borrower protections and more.

Private student loans can help you fill in the funding gap after you’ve tallied all your scholarships and grants and maxed out federal student loans. Private student loans are credit based, meaning not every student or parent will qualify. In fact, nearly 90% of undergraduate private student loans have a cosigner since undergraduates are often too young to have an established credit history.
Our top picks for best student loans
The following companies are listed in alphabetical order.

Abe – Best for Borrower Protections
Ascent – Best for Borrowers Without a Cosigner
College Ave – Best for Parents
Earnest – Best for Flexible Repayment
MPower Financing – Best for International Students
Sallie Mae – Best for Non-Degree Programs
SoFi® – Best for Member Perks

Pros

In-school default protection
Grace period of up to 12 months
Several forbearance options
2% principal reduction after graduation

Cons

Lacks the history of more established lenders so customer reviews are limited
Lower lifetime borrowing maximums than other lenders

HIGHLIGHTS

Loan amounts
$1,000 up to total school-certified cost of attendance

Loan terms
5, 7, 10, 15 or 20 years

Fixed APR
2.50% – 16.58%

Minimum credit score
Not disclosed

Minimum income
Not disclosed

Abe, which launched in the summer of 2024, is a new lender in the private student loan space. Like many lenders, Abe allows borrowers to choose whether they want to make in-school payments or defer payments until they graduate. But Abe stands out for its in-school default protection. If a borrower chooses to start repaying while enrolled and ends up falling behind, Abe will automatically switch them to the deferred payment program.
Abe has an option to extend its 6-month grace period up to a full year, and a shorter-than-normal 12-month period to apply for cosigner release. The company also offers some of the most robust — and transparent — hardship protections of any lender. Borrowers can get 12 months of forbearance for a job loss or other financial hardship, natural disaster or illness.
Aside from the autopay rate discount, borrowers can reduce their interest rate by an additional 0.05% for every six months of on-time payments (for a maximum disc 

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