Interested in the best private student loan options for the 2020 year? Then you’ll find this article helpful. As you know, student loans are one of the best ways to fund an activity or important event when you don’t have the resources right then and there. Student loans, for example, can help provide you peace of mind while you chase your academic dreams. Like general loans, they gain interest over time and must eventually be paid back, albeit through minor installments.
According to Student Loans Advice, “There are two types of student loans — federal and private. Each kind offers varying costs and benefits, with private loans tied to credit and provided through third-party institutions like banks, credit unions, state agencies or schools themselves — both colleges and universities have private loan options.”
When interest rates are high, federal and government loans tend to be more promising, particularly because they offer fixed rates and more stability. But the market currently has low-interest rates, making private student loans much more competitive.
Pretty much all private loans work the same way with one small exception: fixed versus variable rate loans. The difference between the two is simply that a fixed rate loan has a permanent interest rate tied to the contract, while a variable loan has an interest rate that may change based on the market. Variable rates tend to be lower but can be risky because market benchmarks like prime rates and LIBOR can make them shift up or down.
That doesn’t mean you should avoid reviewing the major details before accepting a loan contract.
Best Private Student Loan Options
Want free money?
Here are some of the best private student loan providers for 2020.
LendKey offers repayments terms ranging from five to 20 years. Borrowers can include parents of students, parents of graduates and degree holders as well as current undergrad and graduate students. To be eligible, U.S. citizens and permanent residents must have proof of citizenship or residence permit as well as proof of income. Potential borrowers can check their eligibility online and then receive offers from LendKey’s networks of community lenders.
The minimum loan amount starts at $7,500 and goes up to $250,000, with rates as low as 3.79% or 4.86% depending on if you go with a variable or fixed APR.
Don’t meet the requirements or want to qualify for a lower interest rate? LendKey allows for borrowers to add a cosigner to the loan to help borrowers meet eligibility and get the interest rate that works best for them. This isn’t the only benefit to considering a LendKey loan, they also offer unemployment protection. If you lose your job-or have just finished school- loan payments are placed on temporary hold.
2) Citizens Bank
Citizens Bank offers a five, 10 or 15-year student loan for U.S. citizens and permanent residents. To be eligible, you must be enrolled at least part-time in a degree-granting program via an “eligible” institution. For the most part, this classification simply means accredited institutions. You must also have good credit or a qualified co-signer who meets the credit requirements.
You can receive a minimum of $1,000 or up to $90,000 for undergrads, $110,000 for graduate programs, $130,000 for business or law programs and $170,000 for medical or dental programs.
What makes this loan option promising are some of the additional benefits and features offered. If you make your payments on time and keep your credit in good standing, you can apply for a co-signer release after 36 consecutive months. Doing so allows you to free the connection of the loan to anyone who helped you obtain it and also improve your own credit in the process.
Those with an active Citizens bank account, or those who activate autopay from a bank account — it doesn’t have to be a Citizen account — will receive a 0.25 percent interest rate reduction. Finally, you can opt to make interest-only payments while you’re still in school, or you can defer payments after graduation, with a nice grace period of six months with no payments.
iHelp offers 20-year loans with a variety of benefits. To be eligible, borrowers or co-signers must have at least three years of credit history and two years of annual income at $18,000 or more, and neither must exceed a 45 percent debt-to-income ratio.
Minimum loans start at $1,000 or $3,000 in Georgia and range up to $100,000 for undergraduate programs or $150,000 for graduate schooling. There are no origination or repayment fees on any loans offered.
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Those who meet credit requirements can apply for a co-signer release after 24 months of consecutive payments. Furthermore, there’s a 0.30 percent interest rate reduction after 24 months, as long as the borrowers qualified for the highest interest rate.
While attending school, you have three payments options. You can defer payments until you graduate, make interest-only payments when you have funds or repay principal and interest. There are deferment and forbearance options as well for select qualifiers.
4) Sallie Mae
Sallie Mae offers a few great benefits, with loan terms of 10 years. The loans are eligible only to U.S. citizens or permanent residents, who must be attending an eligible degree-granting school or have attended one prior to enrollment. Co-signers must adhere to the same requirements, including being a U.S. citizen or permanent resident.
Minimum loan amounts start at $1,000 and cover up to 100 percent of school-certified costs for attendance. There are no origination fees for loans offered. Borrowers can receive a 0.25 percent interest rate decrease when enrolling in autopay with an active bank account.
If there’s a co-signer, you can apply for release after 12 months of consecutive payments. You can also defer payments, establish fixed repayment plans or pay just interest while in school. No prepayment penalties exist for any loans, which means you can begin paying off your debt as soon as you’re ready.
Are There More Private Student Loan Options?
This list is not a comprehensive one by any means. There are definitely many more student loan options available to you — both private and federal — that we encourage you to research and consider as well. The loans listed here are some of the best in regards to benefits and future opportunities, such as the interest rate reduction for meeting various requirements. You can use sites like LendKey to find the best student loans with the lowest rates:
When choosing a loan, remember to consider variable versus fixed rates and also the repayment plans offered. You might not have the resources to repay a loan immediately after you graduate and enter the workforce. In that case, deferment options and grace periods are highly beneficial.
You’ll also want to be sure the loan you choose does not include prepayment penalties for paying early. Some offer deferment and forbearance plans, yet should you decide to begin paying early — when you have funds — you will incur additional charges and fees. Websites such as Beat Student Loans are able to help you figure out the best repayment method and helps you organize your loans.
Ultimately, you’ll want to choose the financial option that offers you the most peace of mind so that you can focus on what really matters — your academic progress and bright future.
Need more info? More for best private student loan options, you can read on here.