What Are The Best Student Loans For Every Budget?

Student loans are a key way to pay for college in the U.S. Federal student loans come from the U.S. Department of Education. There are also private student loans. Federal loans have more benefits, like easier repayments. Private loans are useful if you need more money for school after getting federal help.

Key Takeaways

• Federal student loans and private student loans are the two main types of financing for higher education in the U.S.
• Federal loans typically have fixed interest rates and offer income-driven repayment plans, deferment, and forgiveness programs.
• Private loans can supplement federal aid but may have variable interest rates and fewer borrower protections.
• Factors to consider when choosing a student loan include interest rates, repayment terms, and available borrower benefits.
• Several lenders offer specialized student loan products and features to meet the needs of different borrower profiles.

Understanding Student Loans

Student loans are very important for college financing. They come in two main types: federal student loans from the U.S. Department of Education and private student loans. It’s crucial for borrowers to know the differences between these.

Federal Student Loans vs. Private Student Loans

Federal student loans are backed by the government. They have more protections for borrowers and flexible ways to pay back the money. Examples are Direct Subsidized Loans, Unsubsidized Loans, and PLUS Loans. These have interest rates fixed by Congress and don’t need a credit check to get.

Benefits of Federal Student Loans

Federal student loans offer great benefits. They let you adjust your payments based on your income. You can also pause your payments in specific situations. Plus, you may be able to get your loan forgiven if you work in public service. These loans usually have lower interest rates than private options too.

When to Consider Private Student Loans

Private student loans can be good options in certain cases. For example, when you need more money than what federal loans offer. They can also help graduate students or parents cover college costs. If you want to combine several student loans into one new loan, private loans can help with that.

Factors to Consider When Choosing a Student Loan

When picking a , it’s smart to look at s and . have a fixed from Congress. , though, might have a fixed or changing depending on the ‘s credit.

Interest Rates and Fees

Federal s often have lower s than s. s can have s that change, based on the ‘s credit and more. s don’t ask for s. But, s might charge to process your request.

Repayment Terms and Options

repayment times can be as short as 5 years or as long as 20, or even more. While longer terms mean smaller s, you might pay more in . Pick a term that fits your money situation and goals well.

Borrower Protections and Forgiveness Programs

s have extras like income-based repayments and the chance to pause payments. They also offer to forgive some debt for those working in certain jobs. These help s if they run into tough times.

Best Overall: College Ave

College Ave Student Loans is top for private student loans. They have many loan options for undergraduates, graduates, and parents. Plus, you can choose from flexible repayment over 15 years.

Loan Options and Eligibility

For undergrads, loans go from $1,000 to $99,999 a year. Graduate students can borrow up to the cost of attendance. Parent loans are available too. To get a loan, you usually need a credit score in the higher 600s and an income of at least $35,000.

Interest Rates and Terms

College Ave’s student loans have competitive rates, as low as 4.39% APR. You can pick between fixed or variable rates. Repayment options are from 5 to 15 years. They also offer discounts like a 0.25% rate cut for autp payment sign-up.

Best for Healthcare Professions: Sallie Mae

Sallie Mae is a top pick for those studying healthcare and medicine. They offer special loan options that fit the needs of these students perfectly.

Medical School Loan Features

They have loans for medical school with flexible payment plans. You can pay back over 20 years, making it easier on your wallet. Also, you get up to 36 months after you leave school to start paying back, which is a big help.

Residency and Relocation Loans

If you’re heading for a medical residency or moving for a healthcare job, Sallie Mae is there to help. They offer loans that cover the moving costs. This is great for students moving to new places for their medical training.

Cosigner Release Options

One cool thing about Sallie Mae is they let you take off your cosigner after a year of good payments. It’s very helpful for students just starting out in their healthcare careers. They might not have a strong credit or income history yet.

Student Loans

Many lenders also offer parent loan options for financing their child’s education. These could come from the federal government or private lenders. They help but have some things to think about.

Repayment Plans for Parents

Parent repayment plans for student loans tend to be more flexible. They have different features that can be really helpful:

• Loans can be paid back over up to 25 years.
• Income-driven plans mean paying based on what you earn.
• You can pause payments if money gets tight, with options like deferment and forbearance.

Rate Match Guarantee

Some lenders offer a rate match guarantee, like Earnest. If you find a better interest rate on your loan within 30 days of getting a loan from Earnest, they take off $100 off your interest.

Best for No Fees and Discounts: SoFi

SoFi stands out for its private student loans. They don’t add extra fees and offer discounts to borrowers. This means you won’t see origination fees or late payment fees on SoFi’s student loans.

No Origination or Late Fees

SoFi student loans are different because they aim to save you money. They don’t have origination fees or late fees on their private student loan options. This can be a big win for you since many other places do charge these fees.

Autopay and Member Discounts

Besides not having fees, SoFi has more to offer. By using autopay, you can get a 0.25% interest rate reduction. If you’re a SoFi member, there’s an extra 0.125% rate discount waiting for you. These savings add up and can make your student loan more affordable over time.

Best for Borrowers Without a Cosigner: Ascent

Ascent is our top pick for student loans without a cosigner. It provides special loan options for both undergrad and grad students. This includes help for international students and DACA recipients.

Non-Cosigned Loan Options

Ascent’s loan choices are great for many borrowers, even if they don’t have a cosigner. It’s a big help for those who can’t find a creditworthy cosigner, like international students or DACA recipients. This way, they can fund their education.

Eligibility Criteria

To get Ascent’s student loans without a cosigner, you need a credit score in the low-to-mid 600s. You should also show you make at least $24,000 a year. These rules help Ascent check if you’re a good candidate for a loan without a cosigner.

Graduation Reward

One cool thing about Ascent’s student loans is the 1% Cash Back Graduation Reward. If you finish your degree and pay the first 12 installments on time, you’ll get 1% off your principal balance. This can be up to a $1,000 discount. It’s a bonus to push students to finish their studies and keep up with loan payments.

Best Marketplace: LendKey

LendKey is a top choice for students looking to compare and apply for private student loans. It connects borrowers directly with community banks and credit unions. This means more loan options are available.

Also read: How Do I Choose The Best Loan?

Partner Network and Loan Services

On LendKey’s platform, students and families can find a wide variety of loans. These include fixed-rate, variable-rate loans, and special programs for certain groups. The platform is easy to use, making it simple to compare, check eligibility, and apply.

Cosigner Release Policies

LendKey’s partners have different cosigner release rules. But, some allow removing the cosigner after 12 on-time monthly payments. This rule offers students more freedom and financial independence later on.

FAQs

Q: Where can I find information about student loan forgiveness programs?

A: You can find information about student loan forgiveness programs on the official website of the U.S. Department of Education or by contacting your loan servicer.

Q: What is the difference between federal student aid and private student loans?

A: Federal student aid is provided by the government and generally offers lower interest rates and more flexible repayment options compared to private student loans, which are offered by private lenders.

Q: How can I pay for college if I don’t qualify for federal financial aid?

A: If you don’t qualify for federal financial aid, you can explore other options such as scholarships, grants, work-study programs, or private student loans from a bank or credit union.

Q: What is the PLUS loan and who is eligible to apply for it?

A: The PLUS loan is a federal loan program that allows parents of dependent undergraduate students to borrow money to help pay for their child’s education. Eligibility is based on credit history.

Q: How do I make student loan payments and where can I get information about my loan balance?

A: You can make student loan payments through your loan servicer either online, by phone, or by mail. You can also access information about your loan balance through your loan servicer’s website.

Q: Are there different types of student loans available for college students?

A: Yes, there are different types of student loans available including federal direct loans, PLUS loans, private loans from lenders, and alternative loans. Each type has its own terms and conditions.

Q: What are the best private student loans for students looking to borrow money for college?

A: The best private student loans vary depending on individual financial circumstances, credit history, and loan terms. It’s recommended to compare offers from multiple lenders to find the best option.

Q: How can I qualify for student loan forgiveness programs?

A: To qualify for student loan forgiveness programs, you must meet specific criteria such as working in public service, teaching in underserved areas, or making consistent payments on an income-driven repayment plan for a certain period of time.

Source Links

• https://www.nerdwallet.com/best/loans/student-loans/private-student-loans
• https://www.bankrate.com/loans/student-loans/rates/
• https://money.com/student-loans/