Last Updated:

10 Best Student Loan Companies

Compare Rates & Terms For America's Top 10 Student Loan Companies

Alt Text
Fast Application Process
Alt Text
Secure & Trusted Lenders
Alt Text
Flexible Terms
0
Editor's Choice
Alt Example
  • 0.99% - 11.98% variable APR
  • 2.94% - 12.99% fixed APR
  • Apply in as little as 3 minutes
  • Multiple repayment options
  • Cover up to 100% of your cost of attendance
9.8
Alt Example
  • 1.13% - 11.23% variable APR
  • 4.25% - 12.60% fixed APR
  • Lowest rates shown include Auto Debit discount
  • Choose from multiple repayment options
9.6
Alt Example
  • 0.99%-11.44% Variable APR (with 0.25% autopay discount)
  • 3.34%-12.78% fixed APR (with 0.25% autopay discount)
  • Flexible Repayment Options
  • 9-Months Grace Period
9.3
Alt Example
  • 1.85%-10.35% variable APR*
  • 3.24%-12.19% fixed APR*
  • View your rates in minutes without impacting your credit score
  • 1% cash back at graduation*
9.2
Alt Example
  • 0.99% APR-11.33% variable APR (with autopay)*
  • 2.99% APR-10.90% fixed APR (with autopay)*
  • Flexible repayment options
9.0

Our Top Refinance Offers

EDITOR'S CHOCIE
Alt Example
  • Variable rates from 2.39% APR
  • Fixed rates from 2.47% APR
  • No application fees, origination fees, or prepayment penalties
  • Personal Loan Advisor to Guide You Through the Process
9.8
Alt Example
  • Variable rates from 1.87% APR
  • Fixed rates from 2.3% APR
  • Personalized rates in 2 minutes
  • Easy Application Process
  • Zero Fees
9.7

Getting a Third Party Student Loan

Student loans are the fastest-growing category of debt in the United States today. In fact, more than 38 million Americans currently hold a student loan, and the total bill has now reached $305 billion nationwide. When used responsibly, student loans are a great way to purchase a new car, cover those long overdue home improvements, and deal with emergencies when life decides to throw a curveball your way. 

Whatever your reasons for taking out a student loan, though, we understand just how stressful the process can be. Many first-time borrowers turn to their banks in the first instance but can be put off or intimidated by the mountains of paperwork they need to complete and the long waits before the money is in their pocket.

There has been an explosion of third-party lenders in recent years and the student loan market has been cracked wide open. Borrowers have more choices than ever when looking for a student loan, and we’re here to guide you through the options, advantages, and risks of using a third party lender. We’ll also answer any questions you might have about student loans along the way.

What are the risks?

Some people hold the misconception that getting a loan via a third-party lender is somehow access to easy money. This is because the lending process is often easier and quicker than using banks. However, taking out a loan is always a big decision and it will always come with risks associated with it.

Always remember to read the fine print, don’t rush into the first loan you’re offered and keep your eyes open for the following risks:

  • Origination fees - This is just the fancy term for any upfront fees charged by the lender. These fees are partly to cover the admin costs of setting up the loan but also constitute part of the lenders own income.

These fees vary wildly between providers. Some may charge between 0.5% and 1% of the entire loan value, while others can be much higher. If you shop around you’ll be able to find lenders that don’t charge any origination fees at all. Any reputable lender will make these fees very clear at the outset, though. 

  • Understand your interest rate - Interest rates are another big variable. Two people could apply for the same loan amount, from the same company, and come out with two completely different interest rates. Lenders factor in individual circumstances for every loan. The higher the risk they think you are, the higher the interest you’ll pay.

Always ask to see the total amount you’ll pay over the lifetime of the loan. This will give you a good idea of how much interest you’ll actually be paying. If it’s too high, shop around for a better rate.

  • Early repayment penalties - The longer you take to pay off your loan, the more interest a lender makes on it. Lenders don’t want you paying off your loan early and many will have early repayment clauses written into the loan contract.

You should always try to pay down your debts as quickly as possible, so check with your lender to see if they’ll penalize you for doing so. Again, any reputable lender should make these charges very clear from the outset.

  • Payday loan risks - These types of third-party lenders will loan you money on the promise of a portion of your next paycheck. The interest rates are incredibly high and if you’re unable to make the payments you can get trapped in a cycle of debt. Only take this type of loan if you’re absolutely certain you’ll be able to make the repayments.
  • Be careful in giving your student details away - When a loan company is comparing your best loan options it might be necessary for them to give out your student details to different providers. This can lead to many unwanted marketing calls and emails from loan companies, each trying to pressure you into signing on the dotted line.

Make sure you’re clear on the marketing practices of the provider you’re going with. Any decent provider will let you choose your marketing options so you don’t drown in spam.

  • Make sure you can make the payments - Of course, always plan ahead and ensure you can actually pay off the amount you borrow. While the lender will check your circumstances, never be dishonest in the amount you can pay back. 

Any missed payments can affect your credit rating and risk trapping you into a cycle of debt you’ll be unable to repay.

Student loans are still incredibly useful when used the right way, something that millions of Americans can attest to. Just make sure your eyes are open and you’re aware of the risks going in.

How are the loans secured?

There are two types of student loans you can apply for, secured and unsecured. Before deciding on which s right for you, it’ll help to understand these in more detail:

Secured loans

With a secured loan, you make a promise to give up a chosen asset in the event you can’t repay the loan. This could include things like your car, promise of money in a savings account or a certificate of deposit.

These are a lower risk for the lender as they’re pretty much guaranteed to get their money back one way or another. They can be useful for borrowers as secured loans usually come with lower interest rates.

These work well for those with low credit ratings too, and a good way for you to build credit. Many lenders will be happy to discuss secured loan options with you. Of course, though, if you don’t pay, you’ll lose the assets you’ve nominated.

Unsecured loans

These tend to be the more common type of student loan you’ll see. These loans aren’t secured against any of your assets or possessions, meaning if you default on your payments, the lender can’t take any property from you because it wasn’t specifically named as collateral.

However, there are some downsides to using unsecured loans. As these present a higher risk for the lender, they tend to have higher interest rates, meaning you’ll be paying more in the long run. Also, missing any payments has a significant impact on your credit rating, making it very difficult to apply for other types of credit in the future.

How much can you borrow? 

This is where it’s important to set realistic expectations. Your credit score doesn’t just affect your interest rate, it also comes into play when determining how much money you can borrow. Again, we’ll stress that a good credit rating isn’t the be-all and end-all of getting a loan, but the worse your score is, the lower the amount you’ll be eligible to borrow.

This isn’t such a bad thing, as borrowing small amounts and paying them off quickly can really boost your credit score.

You’ll generally find that the highest amount most third-party lenders will be willing to let you borrow for a student loan is up to $100,000. However, it’s very rare to see student loans reach these figures. The average loan amount in the US is around $15,000.

Try not to borrow more than you need to either. Go into a student loan application with a clear idea of what you need the money for. 

What will your repayment terms be?

Most student loans will have repayment terms between one and seven years. The length of time you choose to repay a loan, your credit rating, and financial circumstances all play a part in determining the interest rate, which can vary enormously.

Generally, the shorter the repayment term, the higher the interest rate will be. Confusingly, though, this doesn’t always mean short term loans are more expensive. This is because the longer you take to pay off a loan, the more you’ll generally pay overall. Even if the long term interest rate is lower.

This is why you should always check what the total repayment figure will be over the life of the loan. And remember to watch out for any early repayment penalties in the loan contract too.

Studentloans can be with you for a significant chunk of your life, and many lenders understand your circumstances can change over time. Some lenders may offer additional benefits, such as unemployment protection clauses, to help protect against unforeseen circumstances. This means if you lose your job during the loan repayment period, you won’t have to pay back the loan and your credit rating will be protected.

Make sure you read the fine print on all the clauses of your loan contract before signing and get as many protections as you can.

Stages for Applying for a student Loan

Applying for a loan online couldn’t be easier these days, and can usually be completed in just a few steps:

  1. Plan a budget and come up with a monthly payment you feel is affordable; make sure not to accept offers over this amount
  2. Check your credit score on FICO to get an idea of what you can borrow
  3. Research the best online lenders and marketplaces
  4. Provide basic personal details to the lender or connection service, including your desired loan amount
  5. The provider or marketplace will show you a range of options with varying rates and terms
  6. Select the one you like and the lender will run a hard check on your credit score
  7. Once approved, sign your loan agreement and receive your funding

How to Choose a Lender

With a huge range of choice these days, it can be difficult to know where to start. You might want to take a lot of the work out of your decision by going to a loan marketplace, where you’ll be presented with offers from dozens of different lenders. Or, you can do your own independent research. Either way, we’d recommend looking into the following before you sign any agreement:

  • Eligibility requirements - Check you’re eligible before you apply, making sure you meet the age, credit score, and income requirements. Otherwise, you’ll be hit with a hard check to your credit rating for nothing
  • Research the lender’s reputation - Almost all lenders will have ratings across a number of aggregate review sites like TrustPilot. Plus, a lot of loan marketplaces will have customer reviews built into the website, so it’s easier than ever to check a company’s reputation
  • Compare interest rates and fees - To make sure you get the best deal possible, always compare the fees and interest rates among your top choices
  • Read the fine print - This is the best way to not get stung and can be used to double-check that you’re able to keep up with the repayment schedule

Fast, Instant and Quick Student Loans

It can sometimes be the case that the faster you get your loan, the higher your interest will be. Usually found at the likes of payday lenders, these can be a risky option, but might be a borrower’s only choice in certain circumstances. 

If you'd prefer to go to a more reputable lender, you can speed up the process significantly by having the relevant documentation ready, such as proof of income and identity. The time it takes to get your funding is often dependent on how quickly you respond to the lender’s queries.

Luckily, the industry has recognized the need for speed when it comes to borrowing and many lenders are doing everything possible to make the process easier and faster. Most now offer pre-qualification with a soft credit check, which will give you estimated rates without impacting your credit score.

Excellent Credit, Good Credit and Fair Credit Loans

Before you’ll be approved for a loan, you’ll first need to pass a credit check. Your credit score is a measure of your financial health and is represented by a three-digit number, usually landing between 300 at the bad end and 850 at the excellent end. Borrowers can build up their score by consistently paying off debts and by having a long history of repayments.

The higher your credit score, the lower your rates will be, and those with excellent credit can expect the lowest rates and most favorable terms. However, the vast majority of borrowers will fall into the fair credit rating, and you’ll find many providers specializing in this type of loan.

Be careful you don’t apply for too many loans, though, as each one could result in a hard check on your score, which in turn will negatively impact it. Check out the best student loan companies and try to limit your applications.