We Did The Homework on the Top 7 Student Loan Lenders

College tuition fees are very high, and they are increasing almost every year. Over the last decade, public universities have seen a jump in tuition prices of 35%. Unless your parents can afford to outright pay for your college tuition fees, then you may have to consider a higher education loan from student loan lenders for assistance.

What You Need to Know About Finding Student Loan Lenders

Once you have exhausted your other resources, such as using your own savings and getting federal student aid, you still may need some additional support. At this point, it is time to consider finding student loan lenders. To make your search easier, you can use a student loan locator. When searching and deciding between student loan lenders, you should keep these tips in mind:

  • You can not choose your own student loan lender for federal student loans.
    On the other hand, if you are searching for private student loan lenders, then the decision is completely up to you. While this can take some time and effort, it means that you can make an informed decision, based on the advice below, in order to get the best student loan lenders for you.
  • Compare fees and interest rates.
    The fees and interest rates can vary greatly between different student loan lenders, so it is important to compare the rates of multiple student loan lenders before making your decision. There are many possible fees to look out for, including origination fees, early payment fees, and even lender costs.
  • Check your credit score before searching for student loan lenders.
    Your credit score could have an impact on whether or not you are able to get a student loan and at what rates. By checking out what your credit score is before searching for and comparing student loan lenders, you can find out the possible impact of your credit score on your student loan options and give yourself a more realistic idea of what kind of rates to expect.

Top 7 Private Student Loan Lenders

Not all student loan lenders are equal. If you want to make sure you only consider more trustful student loan lenders, then check out our list of top 7 student loan lenders. At a minimum, you need to make sure your provider is legitimate and not a scam.

1. Citizens Bank

Citizens bank logo.Citizens Bank offers both fixed-rate and variable-rate private student loans for both undergraduate and graduate education, and students or parents are eligible to either borrow or refinance loans through the bank.Loan terms range from 5 – 15 years, and borrowers may take out between $1,000 and $295,000. You can borrow a total of $350,000 for some degree types, but this amount includes a combination of private and federal loans. If you are eligible, you can save money by not paying for application, origination, or disbursement fees, and you can also get loyalty and autopay discounts. There is an option of either making regular or interest-only payments while in school, and co-signers may be released after 36 consecutive on-time payments. Citizens Bank has an A+ rating from the Better Business Bureau.

  • Loan Amount: $1,000 to $295,000, depending on degree type and the amount you borrow in federal loans.
  • Interest: 3.48% – 10.78%
  • Terms: 5 – 15 years. You can refinance student loans with Citizens Bank for up to 20 years with interest rates as low as 1.99%.

2. Sallie Mae

Sallie Mae bank logo.Sallie Mae is a popular choice for private student loans. With low fixed and variable rates for undergraduates, Sallie Mae also has no origination fees or pre-payment penalties. One reason Sallie Mae loans are popular is that borrowers enjoy the flexibility with repayment terms, and unlike most lenders, Sallie Mae allows part-time students to take out loans.  A student or parent can apply for a loan and get a result in about 15 minutes. Borrowers can take out enough funds to cover any expenses associated with school-certified expenses, such as tuition, books, meals, travel, and even a laptop. Sallie Mae also has specialized graduate loans, including ones for bar study, law school, and dental and medical residency. International students may take out a student loan with a qualified U.S. co-signer.

  • Loan Amount: $1,000 up to the total cost of college attendance.
  • Interest: Undergraduate variable rates as low as 1.13% and fixed rates as low as 3.50%. Graduate variable rates as low as 2.12% and fixed rates as low as 4.75%
  • Terms: 5 – 20 years

3. College Ave

College ave student loans logo.Another lender with a simple application, College Ave allows qualified parents and students to take out loans for undergraduate and graduate studies, including refinancing options. While there are no application or origination fees, College Ave does charge late fees of either 5% of the payment or $25, whichever is less, for any payment not received within 15 days of the due date. There are no limits beyond the borrower’s own creditworthiness, and loans can range from between $1,000 to 100% of the school-associated expenses. Co-signers can get a release after 24 months of consecutive on-time payments, not counting forbearance or deferment periods. Any deferment or forbearance situation is decided case by case.

  • Loan Amount: $1,000 up to the full yearly cost of attendance.
  • Interest: Variable interest rates as low as 0.94% up to 12%. Fixed as low as 3.24% up to 13%.
  • Terms: 5 – 15 years

4. Discover

Discover logoBorrowers using Discover may qualify for both current and future loans with the multi-year option, meaning they can focus on their studies instead of worrying about whether they will be able to find a good loan in the following years. The multi-year process is simple and does not have an adverse effect on your credit score, and as long as you stay at the same school and pass a credit review you will continue to qualify for the same rate. There are no application, origination, or late fees, and loan specialists are available at any time to help with questions or problems. One thing Discover offers that is very unusual is a cash reward for good grades, equal to 1% of the loan amount. Anyone who earns the reward only has to log in within 6 months and claim it.

  • Loan Amount: $1,000 up to the full cost of attendance, minus any other amount you receive in aid.
  • Interest: Variable rates range from 1.79% – 11.09%. Fixed rates from 3.99% – 11.59%.
  • Terms: 15 – 20 years for a new loan, depending on the degree. 10-20 years for student loan consolidation.

5. Earnest

Earnest logoEarnest is a great lender because of their low rates and lack of fees. Repayment terms are flexible, the application is fast and easy, and you can get a quote in as little as two or three minutes. As a private lender, Earnest has some extra incentives, such as a 9-month grace period and the ability to choose to skip a payment once a year. During the grace period, interest will start to accumulate, so borrowers have the option of making payments on the interest before the repayment period starts. The 9 month grace period is only available if you are not making payments while in school.

The minimum loan is $1,000, but there is no upper limit as long as the borrower qualifies. Single borrowers have 5 to 7 years to pay back the loan, but borrowers with a co-signer have between 5 and 15 years to pay back a loan. Unlike other lenders, Earnest requires borrowers to have at least 3 years of credit history, a minimum FICO score of 650, and a minimum annual income of at least $35,000.

  • Loan Amount: $1,000 up to the full cost of yearly attendance.
  • Interest: Variable rates as low as 0.94%. Fixed rates as low as 2.99%.
  • Terms: Typically 5 – 15 years. Can be extended up to 30 years under some circumstances.

6. Education Loan Finance

Education loan finance logoThe unique thing Education Loan Finance offers is a referral bonus. All borrowers need to do to collect on the bonus is sign up for a referral link, share the link with friends through email and social media, and collect $400 for each friend that refinances through ELFI. The friend gets $100 toward the principal balance of their new loan. ELFI has higher standards than many student loan lenders and expects borrowers to have at least 36 months of financial history, a $35,000 per year income, and a credit score of at least 680. Students can borrow money if they are enrolled at least half-time. Every applicant at ELFI is assigned a Personal Loan Advisor, in order to help with the process and with any questions or problems.

  • Loan Amount: $1,000 up to full qualified amount of expenses.
  • Interest: Variable rates as low as 1.20%. Fixed rates as low as 3.20%.
  • Terms: 5 – 15 years. Parent loans offer 5 – 10 year terms.


Mpower financing logoMPOWER is a student loan lender designed by international students for international students. While other private lenders have more strenuous requirements, MPOWER Financing is one of the best lenders for borrowers with no credit history. Loan amounts range from $2,000 to $50,000, and borrowers have 10 years to pay back the loans. While there is no application fee, MPOWER does charge a 0.5% origination fee, although it is added to the balance of the loan and can be paid off over time. MPOWER offers several discounts, including autopay, on-time payment, and proof of employment and graduation. Borrowers don’t need to worry about co-signers because the process was set up so students wouldn’t have to worry about their credit history or score.

  • Loan Amount: $2,001 – $50,000 per loan. Maximum is $100,000 total.
  • Interest: Typically 11.99%, but you can earn up to 1.50% off of interest with automatic payments, 6 months of on-time payments, and more.
  • Terms: 10 year repayment term.

Loanry is here to help you with everything you need concerning student loans. We not only provide hundreds of informative articles on various financial topics for free, we also help you connect with the best lenders out there.

What You Need to Know About Saving Money on Your Student Loans

It is possible to save money on your student loans. While owing tens of thousands of dollars to student loan lenders is not uncommon, it is also not encouraged to take out more than you need. Many students just blindly accept the full loan amount when they get an offer from student loan lenders, but this is not required. You can choose how much you take, based on how much you really need. By not taking the full amount, you will save yourself from paying back interest later on the money you took and didn’t really need.

Besides just borrowing smart — by only borrowing what you need, you could also save money on your student loans and borrow less money by saving money before college starts. If you are only looking into student aid options when you are applying for college, then it may be too late, but if you are planning ahead, then you could save yourself from borrowing at least a fraction of your education expenses. You could get a job while in high school and save most of the money you make, as well as save any money you get as a gift for your birthday or Christmas. You and your parents can take advantage of programs like Ascensus College Savings that allow you to save money toward your education on purchases you make anyway, such as for gas or groceries both before and during college.

What You Need to Know About FAFSA

If you have been filling out college applications, then you have probably seen the acronym FAFSA. You may not have known what it stands for though: “Free Application for Federal Student Aid”. If you need assistance paying for college tuition, then filling out the FAFSA should be your first step. You should get a better understanding of the FAFSA and how it could possibly help you decrease the overall amount you need to borrow from student loan lenders. Filling out the FAFSA is the prerequisite to receiving any kind of federal financial aid, including:

Grants are a great option of federal financial aid because they are basically an offer of free money. They typically do not have to be repaid, unless you withdraw from school and owe a refund or if you do not complete your service requirement, which applies if you receive the Teacher Education Assistance for College and Higher Education (TEACH) Grant. There are many types of federal grants available, but one of the most common is the Pell Grant. You may qualify for a Pell Grant if you can prove you have financial need and if you have not yet received your Bachelor’s degree.

Scholarships are also a form of free money. They can come from a range of places, but one way to get scholarships is through the federal government. You could also find other scholarships, whether for academic merit — if you got good grades in high school, talent — if you play sports well, or for your particular area of study. Just be careful to avoid student loan scams when applying for outside scholarships. Your high school can help you find places to look for scholarships.

Loans are not free money. They are borrowing money, which you will later have to pay back, with interest. While it can be overwhelming to pay back your student loans, with interest, there are several repayment plans you can choose from. There are four types of direct loans to choose from, including direct subsidized loans, direct unsubsidized loans, direct PLUS loans, and direct consolidation loans.

Work-study jobs are made available through the Federal Work-Study Program. These jobs are a great way to earn some extra money for education expenses while in school, through part-time work. Getting work-study financial aid allows you to sometimes find a student job more easily since the money is funded by the government, so whoever you work for does not have to pay as much themselves. This is a great option, since you can work either on or off campus, though working on campus oftentimes means more flexible work hours, which will help you to fit in work around your academics.

Federal student aid isn’t your only option. You could also get aid from your state government or even from your college or university. Plus, don’t miss out on tax benefits for higher education, including tax credits for higher education expenses and student loan interest deduction.


Before searching for a student loan, make sure you do your homework. Knowing the statistics of student loans in the US and understanding the benefits of filling out your FAFSA and turning it in on time can help you make a more informed decision when choosing your student loan lender. Do not choose the first student loan lender you find, but rather shop around to find the best student loan lender for your situation. If you have any questions, many student loan lenders are more than willing to answer and help you, so don’t hesitate to ask!


Your Educational Guide On How to Pay for College

Hat graduation model on banknote saving for concept finance education and scholarships

A decade or two ago, the answer would have seemed simple. How to pay for college? Student loans! Take out as much as you can from as many places as possible. And defer repayment for as many years as you can get away with! By the time you have to make your first payment. You’ll have a great career and tons of money and you won’t even miss that monthly installment! Unfortunately, it didn’t always work out quite that way. That’s why we’re reviewing all your options below.

Quote about education

Save Up Ahead of Time

Obviously, it’s ideal if you’re able to start separate savings account well ahead of time, whether the student is you or your offspring or anyone else for whom you’re responsible. Keep in mind that even a few thousand dollars can make a huge difference when it’s time figuring out how to pay for college. In addition to tuition, there are application fees, textbooks to buy, on-campus housing, and endless other expenses to consider. The ability to pay for many of these peripheral costs out of savings simplifies things considerably. And the less you have to borrow, the better.

Grants and Scholarships

Everyone knows that grants and scholarships are amazing, primarily because you don’t have to pay them back. The trick, sometimes, is finding them. They come from so many different sources. And because they’re often privately funded and target specific schools, demographics, majors, or other factors, there’s no one source for locating all for which you might qualify.

That does not mean, however, that you should ever, ever, EVER pay someone to look for grants, scholarships, or any other sort of financial aid for you. There are no secret codes for tracking these things down – no private databases or inside tracks. Every possible bit of information related to financial aid is free for the asking, and that’s how it should stay.

I’m going to assume you’re already familiar with the FAFSA. It’s your one-stop ticket for anything offered through state or federal government or the college or other post-secondary institution of your choice. The FAFSA acts as an informational tool for schools you’re considering, so they can help you with options. And a sort of universal student loan locator – at least when it comes to traditional student loan options.

You should always complete a FAFSA early in the process, however you plan on paying for school and whether you expect to qualify for aid or not.

The stuff that we’re talking about are things like that $500 scholarship your parents’ church offers for anyone going into the ministry, or the $2000 a local Native American group has available for anyone who can establish tribal membership or money from a local industry to support students pursuing training in electronic engineering or plasma physics or arts and crafts. Whatever it is they need more of but can’t find enough of.

Start with your (or your kid’s) high school counselors or the college and career office in your district, if such a thing exists. You may find tons of excellent information, or you may be handed a few generic brochures or pointed to a website or two. They may be totally confused as to why you even asked. That’s OK, though, because it was worth asking. Sometimes those high school counselors are a gold mine.

Next, talk to the financial aid offices at your top 2 or 3 choices for where you’d like to attend. Find out what connections they have, what they know about, what they suggest. Your chances are much better with this group. Since they don’t make money unless you come to school there, and coming to school there means finding a way to pay for it. Try everything they suggest, whether it makes sense to you or not. No matter how successful, or not, we’re not done.

Go to your local library and tell them what you’re looking for. Once again, you’ll often hit gold with this option. But it depends on who answers the phone or who’s at the desk. If you don’t get satisfactory responses the first time, try again during a different time of day or – better yet – a different branch.

Get online, but let me repeat – NO LEGIT ORGANIZATION IS GOING TO TRY TO CHARGE YOU FOR GRANT OR SCHOLARSHIP INFORMATION. You’re better off trying to help out that Nigerian Prince if you insist on being careless with your financial and personal information online. Instead, try the U.S. Department of Labor’s free scholarship search tool. Search the name of your state plus the words “grants and scholarships.”

Ask your parents to check with their employers. The bigger the company, the better the chances they have some sort of aid available. If you’re working, check with your employer. Even companies like McDonald’s are advertising their willingness to help with tuition for their employees Although, it’s probably safe to assume there are some strings and limitations attached.

But that’s OK because your goal at this stage isn’t to accept or refuse anything – it’s to gather options and information. Remember, you’re the Magical Grant and Scholarship Locator. By which I mean, you’re putting in the time and effort to find grants and scholarships to help you figure out how to pay for college.

Finally, ask yourself what “groups” you might belong to. Any demographic outside of “generic straight white able-bodied male” has organizations and advocates scattered across the country, many of whom offer small grants or scholarships for those who qualify. Now, you may be the sort who doesn’t like to see yourself as a member of this group or that. Maybe your politics or personal preferences are such that you don’t want to “play that card” for personal gain.

With all due respect, in this case, you need to get over that and apply for the grant or scholarship. The best thing you can do for yourself, your “group,” your community, family, state, or nation, is getting that education and be all you can be personally, professionally, and financially. If that means that for once in your life you have a chance to exploit the fact that you’re a one-legged transgendered Czech-Irish Buddhist, then go for it.

Don’t worry, we’re not going to think less of you for claiming that $400 stipend from the local chapter of similar folks.

Student Loan Shopping

They’re everyone’s absolute last option for how to pay for college. That’s not entirely fair. Student loans are a necessary option for the many college students, no matter what their age range or where they’re attending. And if you learn how to save money on a student loan, it can be a really good option for you. But let’s look at some other possible answers for how to pay for college first, then come back to them.

Traditional student loans (the ones offered through the federal government) have several advantages:

  • Fees and interest rates tend to be lower than what you might otherwise qualify for.
  • Your credit score is not a major factor in determining whether or not you qualify.
  • Repayment is often deferred until graduation or sometime thereafter.
  • Repayment can be tied to your income, so the less you make, the less your payments.
  • There are sometimes options for “debt forgiveness” if you work in certain professions or specified geographical locations.

Now, I’m about to talk about some other options for how to pay for college, or at least how to pay for part of your post-secondary education in other ways, should you so choose. That doesn’t mean I’m against student loans. As with any loan, I merely suggest you pay attention to the details. And don’t assume anything about the terms or your ability to repay without taking some time to consider all of the possibilities.

I’m not interested in telling you WHAT to do, my friend. If you’re about to enter an institution of higher learning, you should be able to do student loan shopping, gather information and consider your options. Then decide for yourself how to pay for college, yes?

Student Loan pros and cons.

A personal loan is your most basic sort of loan. You borrow a specific amount for a set length of time. And agree to an interest rate and a structured, predictable plan of repayment. The terms you’re able to secure are largely driven by your credit history and three-digit credit score. Although, your current income and anticipated employment may play a role as well.

If you’re pursuing post-secondary education other than that offered in a traditional four-year university, a personal loan for students might be a helpful option. Not all forms of training or education qualify for traditional college loans, or the amount may be modest enough that you’d rather tackle it like any other financed expense. I’m not pushing this option for everyone. But depending on your circumstances, it might be the simplest and most obvious solution.

This is an arrangement you make directly with your school of choice. Rather than borrow money for tuition with specific terms guiding repayment, you commit a percentage of your future income to the school instead.

The flexibility of the income share agreement is obvious – if you end up with a strong income, the school gets paid back quickly. If you don’t make as much as you’d hoped, your repayment is based on a percentage of that rather than the amount you actually owe. Typical ISA agreements are tied to a length of time rather than a dollar amount. So if you agree to give the school 7% of your income for ten years, you might end up paying way less for your education (if things aren’t going well) or double what other students pay (if your career takes off).

Most financial experts aren’t in love with ISAs. Do some research and make up your own mind before considering this option.

The answer to how to pay for college is almost never “Use a credit card!”  That doesn’t mean, however, that responsible credit card use can’t be a part of your plan for incidental expenses as you pursue your education.

Keep in mind that while credit card companies aren’t necessarily evil. They do have a vested interest in “hooking you” early. And start you along the path of eternal repayment without ever being repaid. Don’t just assume you know all there is to know about credit cards for students and fall into the trap of going to either extreme – careless use and irresponsible debt or absolute refusal to carry any form of plastic.

College, among other things, is about learning to adults. Responsible credit card use is part of Adulting 101. With great power comes great responsibility. And learning to use revolving credit responsibly gives you financial power and stronger long-term credit.


There’s no one answer on how to pay for college. Take some time and weigh your options, and above all else, DON’T GIVE UP. It can be a frustrating mess sorting through your choices and keeping up with everything, but guess what?

Welcome to college and the messy world of grown-ups. It may not be easy, but you’ll get so much better at it is difficult that you won’t even notice after a while.


Various Types of Student Loans: Borrow Smarter

Graduation Cap for savings coins for scholarships for funding and education.

It isn’t easy to pay for a college education. The average price of one year at a public university, including tuition, fees, room, and board at the in-state rate is almost $21,000. The private school rate is almost $47,000. That can exhaust 529 plan savings pretty quickly. That’s why so many college students and their parents take out student loans to bridge the financial gap. So many loans that it is estimated there is $1.53 Trillion in student loan debt swirling around out there.

When it comes to borrowing money to pay for college, there are options. Here is what you need to know about the types of student loans that are available to you.

Types of Federal Student Loans

A loan is simply money you borrow that has to be repaid over time with interest. The federal government offers student loans and usually has better repayment terms than private lenders, like banks.

The federal government offers four types of student loans.

  • Direct Subsidized Loans – These types of student loans are for undergraduate students who demonstrate the need for assistance paying for college.
  • Direct Unsubsidized Loans – These are student loans offered to graduates and students. These types of student loans are not based on financial need.
  • Direct PLUS Loans – These types of student loans are for graduate or professional students or parents with undergraduate dependents who are students. These loans are designed to help with college expenses that aren’t already covered by financial aid. Borrowers of Direct PLUS loans have to pass a credit check.
  • Direct Consolidation Loans – These types of student loans allow a borrower with multiple outstanding federal loans to roll that debt into a single lump sum that is managed by a loan servicer.

How Do You Apply for Federal Student Loans?

The first step toward obtaining a fed student loan is to complete the Free Application for Federal Student Aid form, or FAFSA. Before you sit down to work on this application, gather up your Social Security number, previous Income Tax Returns, and W2s that demonstrate your income. You may need bank records and records of investments as well. If you are a dependent student you will need to have all of this information about your parents as well. You aren’t eligible to receive any federal loans or grants until your FAFSA is completed.

Based on the results of the application, your college or career school will make you an offer of financial aid that may include grants and loans. This is the time when you will be able to compare the financial aid being offered to you by different schools.

Before accepting an offer of federal student aid, you will be given counseling to make sure that you understand that the assistance is a loan that will have to be paid back with interest.

The FAFSA will need to be updated by you each year. Schools often make decisions about scholarships based on the information in the FAFSA.

How Much Federal Aid Will You Receive?

Undergraduate students may have a borrowing maximum somewhere between $5500 and $12,500 each year in Direct Subsidized Loans and Direct Unsubsidized Loans.

Graduate or professional students can borrow up to $20,500 in Direct Unsubsidized Loans each year.

Parents with dependent children who are undergraduates may borrow Direct PLUS loans for outstanding costs of college not already covered by financial aid.

One important note about offers of federal financial aid. Just because the government offers you money, you don’t have to take it. You can accept only part of what is offered to you if it aligns better with your repayment goals.

What are Some of the Positive Features of Federal Student Loans?

Federal loans are usually offered at a fixed interest rate. And that rate is usually lower than what is available at banks.

Most of the time no credit check or co-signer is required when taking out a federal student loan.

Federal loans offer a six-month grace period between the end of college and when payments on the loan have to begin. This is designed to give new graduates the chance to get on firmer financial ground. Interest does accrue during those six months.

The federal government offers flexible repayment plans including some that are income-driven and assume you’ll be making more money as you gain experience in the work world. You can ask for new repayment terms at any time. The government also works with borrowers who are having trouble meeting their loan obligations. Sometimes payments are lowered or temporarily suspended so that the borrower can get back on track.

The federal government also has programs in place that sometimes forgives the balance of student loans. One is called Public Service Loan Forgiveness, or PSLF. It is sometimes available for borrowers who work in qualifying government jobs or jobs in the non-profit sector. After the borrower makes 120 monthly payments, the program could be used to pay off all remaining student loan debt.

There is also a Teacher Loan Forgiveness program that educators can apply for after they have taught for five complete and consecutive years in a low-income school. That loan forgiveness program could discharge up to $17,500 worth of student loan debt.

Private Lender Student Loans

There are private lenders that are in the business of loaning money to college students. These types of student loans come from banks, credit unions, and some online loan shops. You should only begin shopping for private loans if you have already exhausted all the available options in loans from the federal governments. The interest rates tend to be larger than government-backed loans. And the student’s credit history plays a factor in the loan.

How Do You Shop for Loans from Private Lenders?

When you are shopping for a student loan through a private vendor you are searching for the types of student loans with the best interest rate and the most favorable repayment schedule. You want to apply to a number of lenders so that you can compare their offers. Unlike the FAFSA form, you will be filling out applications for each potential lender. Private lenders don’t allow you to change your repayment plan as the federal government does. Changing the terms of a private loan requires refinancing or consolidating.

Some online stores bring you multiple offers from lenders very quickly after filling out their forms. These include sites like Credible and College Ave. These sites work as a student loan locator service. Their lending partners prequalify potential borrowers for loans at particular rates. You don’t pay more to use their service. The lenders pay a fee to be a part of their network. You also fill out one application and you may see as many as 10 loan offers which give you the tools to make comparisons.

Filling out one of these online forms doesn’t impact your credit score at all. It is noted as a soft request. Only hard inquiries become part of your credit history.

What is the interest rate on the loan and is the interest fixed or variable? Fixed interest is set for the life of the loan. Variable interest changes throughout the loan and is tied to a financial metric. Sometimes interest rates on a variable interest loan can change without much notice.

The shorter the loan the less interest you will pay, but each monthly payment will be higher. This step requires looking into the future and evaluating the payments you’ll be able to afford.

Private lenders will do credit checks on loan applicants. Expect to pay a higher interest rate on a loan if your credit score is less than 690. Your credit score is based on your credit history and is usually reported as a 3-digit number. Three of the major credit reporting agencies are TransUnion, Experian, and Equifax. Many lenders require a co-signer for borrowers with low credit scores. This happens to recent college graduates who haven’t yet build a solid history of managing credit and debt.

If someone co-signs for your loan, your credit history becomes meshed with theirs. If payments are missing or late it impacts the credit score of the co-signer as well as you. Successfully managing a student loan is one way to build a positive credit history.

Should You Take Out a Personal Loan to Pay Off a Student Loan?

It is usually not a good idea to take out a personal loan to pay off any type of student loan. In general, the interest rates on personal loans are higher than student loans. And personal loans usually come with a shorter payback time. Most have to be paid in full in five years.

A personal loan will not come with any grace period to begin making payments as federal student loans do. The interest on a personal loan isn’t tax-deductible. The interest on a student loan is.

Income Share Agreement

An Income Share Agreement, or ISA, is a non-traditional method for financing a college education. An ISA is an agreement between the student and the school that the student will repay the cost of the education after they have graduated and are out in the workforce. Instead of borrowing money upfront to pay for college, this is money paid on the back end.

In an Income Share Agreement, the school calculates what it believes to be the student’s future earning power based on what they studied and sets the payments accordingly. Tying the cost of college to a student’s major requires complete transparency on the part of the school and how it reports student success.

Income Share Agreements are only available at a limited number of colleges and universities.

Should I Put College Costs on a Credit Card?

When it comes to paying tuition with a credit card there isn’t one answer for everyone about whether it is right or wrong. If tuition is going to end up as a balance on a credit card that is subject to high interest and late payment fees, then taking out a student loan is a smarter choice. But if you are interested in capitalizing credit card rewards, charging tuition to a card might be a good strategy.

  • If the credit card accumulates reward points based on each dollar spent, then paying for a chunk of college could rack up many rewards.
  • Some cards will offer a sign-up bonus that increases the number of reward points exponentially.
  • Some card issuers offer 0-percent interest for a limited time when the card is brand new.
  • If your card has a minimum spending limit before rewards kick in, then putting tuition on that card may be the way to get to that threshold.

There are some things to watch out for that may erase the benefits of putting the cost of college on a credit card. Not all schools accept credit cards. But most of the ones that do will add a convenience fee on top of the payment. A convenience fee on a big purchase like tuition may erase any rewards or benefits that were earned. Another issue with putting college on a credit card is that the limit on the card might not be large enough for a tuition-sized expense.

If you use a credit card for educational costs treat it like it is a debit card. Completely pay the balance when it is due so that interest doesn’t begin to accumulate. Student loans offer a much better interest rate than credit cards.

Should I Consolidate My Student Loan Debt?

Consolidating multiple types of student loans into one loan can make it easier to track what has to be paid and when it is due. If your loans are all federal loans you can request that they are consolidated. The interest rate will be based on the interest rates of the original loans, so this isn’t a way to reduce payments by scoring really low-interest terms.

When private loans are consolidated it is usually referred to as refinancing. It is often done to capture a better interest rate. If you are consolidating federal loans and private loans into one package the federal loans lose some of the special considerations they once had like repayment options and forgiveness.


The first steps toward paying for a college education include tapping savings, applying for scholarships and grants and investigating work/study opportunities. But if you need student loans to bridge the gap between what you have and what college costs, start with the federal government. The government is in a position to offer the best interest rates on these types of student loans. The federal government usually doesn’t need a credit check before the loan is originated and offers a six-month grace period where no payments are due after graduation. Borrowers can request to change the repayment terms of their loan or consolidate multiple federal loans into one loan at any time. If you are beginning the search for federal loans you have to fill out a FAFSA form located on the www.studentaid.gov website.

Private lenders also issue student loans. They usually come with a higher interest rate than federal loans. When shopping for private loans you can compare the terms different lenders are offering you on these types of student loans. That includes interest rates and the length of the loan. You can go to individual lenders, like banks or credit unions, and fill out applications for each one. Or you can go to an online mall and fill out a single application that can prequalify you and pair you with loan quotes from the site’s preferred partners.

No matter where your loan originates you should commit to paying it back in full and on time. That will help you build a solid credit history.


How to Find Your Student Loan Servicer: Smart Tips

Female student study in library using tablet and searching internet while Listening music

Student loan or campus loan repayments can be confusing. You know you have to make the payment. But where do you send the payment and where do you find your student loans? You won’t necessarily be paying the same entity that lent you money. Your student loan servicer and lender could be different so there are some things you need to know.

Finding a Student Loan Servicer

Finding your student loan servicer will be a different process depending on whether you have a private student loan or federal loan. If you have both types of loans, you will have to find your servicer for each one. There are nine different federal student loan servicers so it’s easier to find your servicer for your federal loans.

If you have a federal student loan then go to the National Student Loan Data System and use it as a student loan locator. Click on Financial Aid Review and then log in using your FSA ID. If you don’t have an ID number then you will have to create one. Once you log in you can see a summary of the loan data. This includes the different types of student loans you have, the amounts and any outstanding balances, and interest. Each loan also has a number next to it. And, if you click on it, it expands your information and contact information for the lender at the bottom of the page.

If you have student loans that are private, it takes a little more work to find the student loan servicer. It helps to start looking at your credit reports. And you are able to access your reports from the three main credit bureaus. You can also check your most recent loan statements to find the servicer.

What Does a Student Loan Servicer Do?

The student loan servicer is the company that manages your student loans. They act as a third party and a middleman between your lender and you. When you do make a payment toward your loan, it is the servicer that manages it. Servicers work with borrowers to help manage student loan repayment. If you need to change your repayment plan or apply for forbearance or deferment then you need to discuss your options with the student loan servicer.

You will want to work with your student loan servicer as best you can. Once you start earning money to pay toward your loans you may want to pay off certain loans first, such as the ones with higher interest rates, which can help you save some money on your loan. Contributing more than your scheduled payment can help you save interest.

Contact your servicer to learn how to apply for your additional money. Instead, they may just apply any extra payments and money toward the next month’s bill. You may also be eligible for student loan forgiveness if you work in a certain field for a specific period of time. In order to make sure you are on track to get this benefit, you need to work with your student loan servicer to determine whether the loans are eligible, whether you are in a repayment plan that is qualifying, and whether or not you have properly filled out the forms.

Choosing a Student Loan Servicer

You, unfortunately, don’t get to choose your loan servicer and are assigned one. If you have student loans from the federal government then your student loan servicer will be assigned by the Department of Education.

The servicer’s job is to help you keep your loans in good standing by giving you the resources and support you need. However, you need to know that they are private companies, which means they can offer choices that may not be the best for you. You have to also be your own advocate by knowing your different repayment options and asking questions when dealing with your student loan servicer.

If you have federal loans, you can exit the federal loan system and have a better chance of selecting your student loan servicer when you refinance your loans privately.

List of Federally Approved Student Loan Servicers

While you don’t get to choose a student loan servicer for your federal loans, when you choose a private student loan lender you are also choosing a student loan servicer so it’s important to choose a private student loan lender carefully.

When choosing a private student loan lender, the most important things to look for are fees and interest rates. In order to check this, you may need to do some shopping around. The rates you will find are just like other loans. And will depend on the market interest rate and your credit history. Some lenders require a co-signer, such as a relative or parent, who will also shoulder responsibility if you stop making payments. This means that your payment activity impacts their credit score, which is not something you really want to do to the co-signer. When looking at the costs for the private student loan lender, consider the interest, origination fees, early payment fees, and the lender costs.

It can be common to see either private or federal student loans transferred to a new servicer at any point, including in the repayment phase. Since the student loan servicer handles the transfer of the account it doesn’t affect your student loan terms. You will usually get electronic or mail notifications that your student loan is now being serviced by a new company. If this happens, you should continue making payments on time to the old servicer as instructed in order to avoid any late or missing payments.

What to Do Once You Find Your Student Loan Servicer?

Once you know who your servicer is you should then create an account on their site. In order to do this, you usually need to create a username or password. And then share relevant information, such as your Social Security Number, name, and address. You will also need to secure your account with some security questions. When you have registered, you are able to connect your bank information and then make payments directly. You are also able to send checks but it can be much easier to pay online.

There can also be other benefits to paying online. For example, you may get a reduction in your interest rate if you sign up for automatic payments. If you don’t want to sign up for autopay then see if you are able to sign up for online alerts so you are able to be reminded when a payment is due so you never miss a payment.

How Your Student Loan Servicer Can Help You?

Your student loan servicer can help you with many things once you track them down:

  • update your contact information
  • check your loan status
  • find details on payment amounts
  • help you make your payments

Being proactive about reaching out to your servicer and managing your loans is a good strategy to correct any issues, avoid errors, and help you keep your payments on track.

Forbearance with Your Student Loan Servicer

It is not unusual that you can not pay your student loan. According to some student debt statistics, the total amount of student loan debt in 2020 is over $1.67 trillion. If you are unable to pay your student loans then your loan servicer could suggest forbearance. Forbearance is the option to delay payments and you don’t have to make payments while loans are in forbearance. It sounds pretty great but it may not be the best option. While in forbearance, your loans still accrue interest. The interest is added to your balance once your loans are out of forbearance and you are back to making regular payments.

This means that unless you can cover the interest while your loans are in forbearance, your balance will be higher as you start to enter repayment. Since the interest keeps accruing, forbearance should be only temporary and a short-term solution and not a long-term solution.

Whether or not you can get forbearance from your student loan servicer will depend on whether or not your loans are federal or private. Federal loans will usually offer more generous forbearance terms than private lenders.

Not all forbearance terms are the same and for federal student loans, there are two types.

General forbearance can be an option for you if you aren’t able to make payments due to financial difficulties, medical expenses, an employment change, or other reasons. You have to apply for this type and the servicer has the right to deny the application at their discretion.

Mandatory forbearance is used in different situations when you are in a residency program or medical internship, an active National Guard Member, or your payment is more than 20% of your monthly gross income. If you qualify for this then the servicer isn’t able to deny the request.

In certain cases, your service provider can actually place loans in forbearance without you filling out a form. For example, forbearance can happen during a natural disaster when you aren’t able to make payments. There are other reasons why your account may be in forbearance.

While it can seem tempting to jump at the chance to not have payments for a time period, you should look at your situation before you make the decision. Why do you want to delay the payments? Are you looking for a long-term or short-term solution? Could deferment be a better option? If you decide that forbearance is your best option then it helps to make interest-only payments during this time period. The small payments that chip away at the interest will benefit you in the long run.

The less interest you get in forbearance, the less your principal will go up when you are done with forbearance. If you are placed in forbearance and you can actually make your payments then cancel your forbearance so you can work toward lowering your principal instead of letting it grow.

Deferment with Your Student Loan Servicer

This can be an option with your student loan servicer. Deferment actually excuses you from making a student loan payment for a certain period of time because of a condition in your life, such as hardship, unemployment, or returning to school. Unlike forbearance during this time, interest doesn’t accrue. You can usually qualify for deferment on a federal student loan if there are specific conditions and criteria for the loan time and you aren’t more than 270 days behind on your loan payments. You can defer student loans for only so long but usually, the maximum is for three years total. In order to apply, you need to send your servicer the right application and the necessary documentation. Your servicer needs to grant you deferment if you qualify but keep making payments until you are officially approved.

There are Different Types of Deferment Depending on Your Needs

  • In-School Deferment: This deferment is when you pause your loan payments while you are enrolled in college at least half time and the six months after you leave school or graduate. If you qualify then you should automatically get this but if you don’t, ask the enrollment office to send the information to the servicer.
  • Unemployment Deferment: In order to qualify for this, you will need to be unemployed and getting unemployment benefits, as well as diligently seeking full-time work. Many borrowers can get up to 26 months of this type of deferment but you will need to apply every six months.
  • Economic Hardship Deferment: You can qualify for economic hardship if you are getting federal or state assistance, such as through Temporary Assistance for Needy Families, or if you are not working full time and earning a monthly income of less than the poverty guidelines for your state or volunteering for the peace corps.
  • Military Deferment: If you are on active military duty then you can postpone payments. Your service needs to be related to a military operation, national emergency, or war in order to qualify. You are able to qualify for this deferment as long as you are on active military duty. You are also able to use it for 13 months after the service ends or you return to school.
  • Cancer Treatment Deferment: Cancer patients that have student loan debt can also get a deferment during treatment and for six months following the conclusion of treatment.
  • Other Types of Deferment: Other private lenders will also let you defer student loans while in the military or school. Be sure to contact the lender for eligibility details and to find out how to apply.

Deferment on Private Student Loan Cost More
If you have private loans then student loan deferment can be expensive. These loans may accrue interest during deferment and you will be responsible for paying it. If you don’t pay this while your loans are in deferment then unpaid interest is added to the loan balance, just like forbearance.

Income-Driven Repayment with Your Student Loan Servicer

If you are worried about affording payments in the long run and deferment or forbearance isn’t an option for you then an income-driven repayment can offer some immediate relief and some other benefits:

  • You Will Likely Pay Less Every Month: Many factors factor into how your payments are calculated. If you are deferring loans because you don’t earn a lot of money then your payments could be as low as $0, which is basically the same as pausing them altogether.
  • You Can Save on Interest: A big benefit of deferment is not paying interest on any subsidized federal loan. However, most income-driven pans also waive the costs if your payments don’t pay for your accrued interest. This will last for three years, which is the same as economic and unemployment hardship deferments.
  • You May Get Loan Forgiveness: After 20 to 25 years of payments, income-driven plans will forgive the remaining balance on your payments. And forgive any remaining balance on your loans. Instead of pausing payments for three years with deferment, you could be paying under an income-driven plan and be closer to forgiveness than with deferment.

It’s possible that you will pay more interest overall on an income-driven repayment plan since these plans extend your repayment term. Use a repayment estimator to calculate short- and long-term costs. Then you can see if this is the right plan for you compared to deferment or forbearance.


Sometimes, with a good interest rate, personal loans can help you to get out of debt. But this is for some other story. While you may not have a choice in your student loan servicer, finding the servicer is an important part of getting your loans repaid. Working with your servicer is going to be in your best interest in order to make sure that you get your loans paid and to find the best repayment plan for your needs, whether it’s forbearance, deferment, or an income-driven repayment plan.