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Private Student Loans

Private Student Loans Archives - Sparrow Nest

<p>Figuring out student loans is overwhelming. People start throwing out loan lingo left and right, and all the terms start to blend together. The term “cosigner” is one popular example of this loan lingo and often becomes a point of confusion. Understanding what a student loan cosigner is and when you may want to have one is crucial in the student loan process. Let’s break it down.</p>


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<h2 id="h-what-is-a-cosigner" class="wp-block-heading"><b>What is a Cosigner?</b></h2>
<p>A cosigner is someone who agrees to sign onto a loan alongside you, the borrower. By doing so, the cosigner takes legal responsibility for repaying the loan if you do not. A cosigner is often a family member or friend but can be anyone who is willing to cosign.</p>


<h2><b>What Types of Loans Need a Cosigner?</b></h2>
<p></p>
<figure class="wp-block-image"><img loading="lazy" decoding="async" class="wp-image-1532" src="https://wordpress.sparrowfi.com/wp-content/uploads/2022/03/Blog-Imagery-3-300x169.png" alt="" width="375" height="211" srcset="https://wordpress.sparrowfi.com/wp-content/uploads/2022/03/Blog-Imagery-3-300x169.png 300w, https://wordpress.sparrowfi.com/wp-content/uploads/2022/03/Blog-Imagery-3-1024x576.png 1024w, https://wordpress.sparrowfi.com/wp-content/uploads/2022/03/Blog-Imagery-3-768x432.png 768w, https://wordpress.sparrowfi.com/wp-content/uploads/2022/03/Blog-Imagery-3-1536x864.png 1536w, https://wordpress.sparrowfi.com/wp-content/uploads/2022/03/Blog-Imagery-3-2048x1152.png 2048w, https://wordpress.sparrowfi.com/wp-content/uploads/2022/03/Blog-Imagery-3-1568x882.png 1568w" sizes="(max-width: 375px) 100vw, 375px" /></figure>
<p></p>
<p>When paying for college, you will encounter <a href="https://www.sparrowfi.com/blog/whats-the-difference-between-federal-and-private-student-loans">two types of student loans:</a> federal and private.</p>
<p><a href="https://www.sparrowfi.com/blog/ultimate-guide-to-federal-student-loans">Federal student loans</a> are provided by the government and do not require a cosigner.</p>
<p><a href="https://www.sparrowfi.com/">Private student loans,</a> on the other hand, come from private entities and are given out based on your creditworthiness.* If the lender deems you not creditworthy enough to borrow from them, you may need a cosigner to secure the loan.</p>
<p>Here’s is a list of some of the <a href="https://www.sparrowfi.com/">best student loans</a>.</p>
<p><i>*Creditworthiness is essentially how much a lender trusts you to pay back your debts. The higher your <a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">credit score</a>, the more creditworthy you appear to lenders.</i></p>
<p></p>

<h2 id="h-why-would-i-need-a-cosigner" class="wp-block-heading"><b>Why Would I Need a Cosigner?</b></h2>
<p>There are a variety of reasons why you may need a cosigner to get approved for a private student loan, such as:</p>
<ul>
<li>Your credit score or income is too low</li>
<li>Your credit or employment history is too short</li>
<li>Your credit report shows a variety of other debt or a checkered history in repaying it</li>
<li>Your residency status requires applying with a citizen or permanent resident cosigner</li>
</ul>
<p></p>
<p> </p>
<p>From the lender’s perspective, having a creditworthy cosigner lessens the risk associated with lending to you. It assures them that there is a responsible individual able to pay the loan in full and on time.</p>
<p>In these instances, having someone cosign may be your only option for actually securing a loan with that specific lender. Even if you are deemed creditworthy enough to take out a loan on your own, having a creditworthy cosigner can help you qualify for and borrow loans with more attractive terms.</p>

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Compare your personalized, pre-qualified rates from these lenders in minutes.

<p>If you want to skip pre-qualification and apply directly with a lender, you can do so by clicking <b>Apply</b> below.</p>


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<h2 id="h-is-having-a-cosigner-a-bad-thing" class="wp-block-heading"><b>Is Having a Cosigner a Bad Thing?</b></h2>
<p>Needing a cosigner isn’t necessarily a bad thing and is actually quite common. According to a study conducted by MeasureOne, in the 2019-2020 academic year, over 90% of undergraduate students needed a cosigner for at least one private loan they took out. Even if you don’t need a cosigner, including one on your application may have additional positive benefits.</p>


<h2 id="h-benefits-of-having-a-cosigner" class="wp-block-heading"><b>Benefits of Having a Cosigner</b></h2>
<p>If you are able to have a creditworthy cosigner on your private student loans, there are numerous benefits, such as:</p>
<ol>
<li><b>The ability to secure a loan.</b> Without a cosigner, you may not be able to secure a loan on your own.</li>
<li><b>Lower interest rates.</b> If your cosigner has demonstrated creditworthiness, private lenders will likely give you a lower interest rate on your loans.</li>
<li><b>Less expensive over time.</b> Lower <a href="https://www.sparrowfi.com/blog/how-student-loan-interest-actually-works">interest rates</a> on your loans means lower payments, which means less money spent over time.</li>
</ol>
<p>The person cosigning can also benefit from doing so. If the primary borrower demonstrates responsibility in making their loan payments, the cosigner’s credit score can go up, too.</p>

<h2 id="h-can-you-get-a-loan-without-a-cosigner" class="wp-block-heading"><b>Can You Get a Loan Without a Cosigner?</b></h2>
<p>The short answer here is yes. However, more often than not, you will need a cosigner on a private student loan, particularly if you’re an undergraduate.</p>
<p>You should shop around for a lender that will offer you the best interest rates and terms, but you may find that many require a cosigner for first-time, inexperienced borrowers.</p>
<p>If you can get a loan without a cosigner and still get the same interest rate either way, it’s best to take the loan out without the cosigner. It’s better to build your own credit over time without the cosigner being legally responsible for your debt.</p>


<h2 id="h-what-to-look-for-in-a-cosigner" class="wp-block-heading"><b>What to Look For in a Cosigner</b></h2>
<p>If you’re unable to get approved without a cosigner, having anyone willing to cosign will be helpful. But, if you do have a choice, here are a few things to look for in a potential cosigner:</p>
<ol>
<li>Someone with stable income who could genuinely handle paying off your loan if you struggle to do so yourself</li>
<li>Someone with little to no debt themselves as it could be challenging to support your loan payments (if needed) with their own debt</li>
<li>Someone with a high credit score</li>
<li>Someone with a solid debt repayment history</li>
</ol>


<h2 id="h-final-thoughts-from-the-nest" class="wp-block-heading"><b>Final Thoughts from the Nest</b></h2>
<p>Whether you need a cosigner may be a bit out of your control. The good news is that most college students need a cosigner and ultimately benefit from having one. Understanding what they are and how to proceed if you do need one is the most important first step.</p>
<p>If you’re struggling to find a cosigner, don’t worry. We’ve partnered with several lenders to offer Sparrow members non-credit-based student loans that don’t require a cosigner. To see what loan options you pre-qualify for, fill out the <a href="https://www.sparrowfi.com/sign-up">Sparrow form</a>.</p>


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Figuring out student loans is overwhelming. People start throwing out loan lingo left and right, and all the terms start to blend together. The term “cosigner” is one popular example of this loan lingo and often becomes a point of confusion. Understanding what a student loan cosigner is and when you may want to have one is crucial in the student loan process. Let’s break it down.

<h2 id="h-final-thoughts-from-the-nest" class="wp-block-heading"><b>Final Thoughts from the Nest</b></h2>
Whether you need a cosigner may be a bit out of your control. The good news is that most college students need a cosigner and ultimately benefit from having one. Understanding what they are and how to proceed if you do need one is the most important first step.

If you’re struggling to find a cosigner, don’t worry. We’ve partnered with several lenders to offer Sparrow members non-credit-based student loans that don’t require a cosigner. To see what loan options you pre-qualify for, fill out the <a href="https://www.sparrowfi.com/sign-up">Sparrow form</a>.

<h2 id="h-what-is-a-cosigner" class="wp-block-heading"><b>What is a Cosigner?</b></h2>
A cosigner is someone who agrees to sign onto a loan alongside you, the borrower. By doing so, the cosigner takes legal responsibility for repaying the loan if you do not. A cosigner is often a family member or friend but can be anyone who is willing to cosign.

<h2><b>What Types of Loans Need a Cosigner?</b></h2>

<figure class="wp-block-image"><img class="wp-image-1532" src="https://wordpress.sparrowfi.com/wp-content/uploads/2022/03/Blog-Imagery-3-300x169.png" alt="" width="375" height="211" /></figure>


When paying for college, you will encounter <a href="https://www.sparrowfi.com/blog/whats-the-difference-between-federal-and-private-student-loans">two types of student loans:</a> federal and private.

<a href="https://www.sparrowfi.com/blog/ultimate-guide-to-federal-student-loans">Federal student loans</a> are provided by the government and do not require a cosigner.

<a href="https://www.sparrowfi.com/">Private student loans,</a> on the other hand, come from private entities and are given out based on your creditworthiness.* If the lender deems you not creditworthy enough to borrow from them, you may need a cosigner to secure the loan.

Here’s is a list of some of the <a href="https://www.sparrowfi.com/">best student loans</a>.

<i>*Creditworthiness is essentially how much a lender trusts you to pay back your debts. The higher your <a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">credit score</a>, the more creditworthy you appear to lenders.</i>

<h2 id="h-why-would-i-need-a-cosigner" class="wp-block-heading"><b>Why Would I Need a Cosigner?</b></h2>
There are a variety of reasons why you may need a cosigner to get approved for a private student loan, such as:
<ul>
 	<li>Your credit score or income is too low</li>
 	<li>Your credit or employment history is too short</li>
 	<li>Your credit report shows a variety of other debt or a checkered history in repaying it</li>
 	<li>Your residency status requires applying with a citizen or permanent resident cosigner</li>
</ul>


 

From the lender’s perspective, having a creditworthy cosigner lessens the risk associated with lending to you. It assures them that there is a responsible individual able to pay the loan in full and on time.

In these instances, having someone cosign may be your only option for actually securing a loan with that specific lender. Even if you are deemed creditworthy enough to take out a loan on your own, having a creditworthy cosigner can help you qualify for and borrow loans with more attractive terms.

If you want to skip pre-qualification and apply directly with a lender, you can do so by clicking <b>Apply</b> below.

<h2 id="h-is-having-a-cosigner-a-bad-thing" class="wp-block-heading"><b>Is Having a Cosigner a Bad Thing?</b></h2>
Needing a cosigner isn’t necessarily a bad thing and is actually quite common. According to a study conducted by MeasureOne, in the 2019-2020 academic year, over 90% of undergraduate students needed a cosigner for at least one private loan they took out. Even if you don’t need a cosigner, including one on your application may have additional positive benefits.

<h2 id="h-benefits-of-having-a-cosigner" class="wp-block-heading"><b>Benefits of Having a Cosigner</b></h2>
If you are able to have a creditworthy cosigner on your private student loans, there are numerous benefits, such as:
<ol>
 	<li><b>The ability to secure a loan.</b> Without a cosigner, you may not be able to secure a loan on your own.</li>
 	<li><b>Lower interest rates.</b> If your cosigner has demonstrated creditworthiness, private lenders will likely give you a lower interest rate on your loans.</li>
 	<li><b>Less expensive over time.</b> Lower <a href="https://www.sparrowfi.com/blog/how-student-loan-interest-actually-works">interest rates</a> on your loans means lower payments, which means less money spent over time.</li>
</ol>
The person cosigning can also benefit from doing so. If the primary borrower demonstrates responsibility in making their loan payments, the cosigner’s credit score can go up, too.

<h2 id="h-can-you-get-a-loan-without-a-cosigner" class="wp-block-heading"><b>Can You Get a Loan Without a Cosigner?</b></h2>
The short answer here is yes. However, more often than not, you will need a cosigner on a private student loan, particularly if you’re an undergraduate.

You should shop around for a lender that will offer you the best interest rates and terms, but you may find that many require a cosigner for first-time, inexperienced borrowers.

If you can get a loan without a cosigner and still get the same interest rate either way, it’s best to take the loan out without the cosigner. It’s better to build your own credit over time without the cosigner being legally responsible for your debt.

<h2 id="h-what-to-look-for-in-a-cosigner" class="wp-block-heading"><b>What to Look For in a Cosigner</b></h2>
If you’re unable to get approved without a cosigner, having anyone willing to cosign will be helpful. But, if you do have a choice, here are a few things to look for in a potential cosigner:
<ol>
 	<li>Someone with stable income who could genuinely handle paying off your loan if you struggle to do so yourself</li>
 	<li>Someone with little to no debt themselves as it could be challenging to support your loan payments (if needed) with their own debt</li>
 	<li>Someone with a high credit score</li>
 	<li>Someone with a solid debt repayment history</li>
</ol>

A student loan cosigner is someone who agrees to sign onto a loan alongside you, the borrower. Here's what you need to know:

Student Loan Cosigner for June 2024

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Grace Lemire

<p>Student loans serve as a valuable resource to bridge financial gaps when scholarships, grants, and other forms of aid fall short. However, it&#8217;s important to note that student loans come with a cost. In addition to repaying the principal balance (the initial borrowed amount), student loans also accrue interest. These interest rates play a crucial role in determining the total amount owed and significantly impact monthly payments. Before committing to a loan, compare interest rates to ensure that your debt will be manageable after graduation.</p>
<p>Below we’ve listed our top-rated student loan options with the lowest advertised interest rates. Keep in mind that only the most creditworthy borrowers will receive the lowest rates available, and that variable rates can increase in the future.</p>


<h2><strong>Best Student Loan Rates of April 2024</strong></h2>


<h3><strong><a href="https://asla.accountcenter.studentloan.org/inschool/welcome?ref=arspar&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=spar-is&amp;qfid=affiliate-000-000" target="_blank" rel="noreferrer noopener">Arkansas Student Loan Authority</a> (ASLA)</strong> – Both undergraduate and graduate degrees</h3>


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<p><strong>Best for:</strong> Residents of, or students in, Arkansas.</p>


<h3><a href="https://www.ascentfunding.com/college-loans/sparrow/?utm_source=partner&amp;utm_medium=sparrowfi_rev_learn_subid--affiliate-000-000" target="_blank" rel="noreferrer noopener"><strong>Ascent</strong></a> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> International and DACA students who have a lower credit score.</p>


<h3><a href="https://studentloans.com/student-loan-options.html?mc=0000009i" target="_blank" rel="noreferrer noopener"><strong>Brazos</strong></a> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> Residents of, or student in, Texas.</p>


<h3><a href="https://www.collegeavestudentloans.com/application/?SC=CAIS01&amp;ACT=US&amp;utm_campaign=affiliate%20ongoing&amp;utm_source=sparrow&amp;utm_medium=aggregator&amp;utm_content=apply&amp;brand=college%20ave&amp;product=inschool&amp;p_aff=sparrow&amp;goal=acquisition&amp;agg_ref_id=affiliate-000-000" target="_blank" rel="noreferrer noopener"><strong>College Ave</strong></a> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> Borrowers looking for a repayment term that matches their budget.</p>


<h3><a href="https://www.customchoice.com/?referrer_link=SPROaffiliate-000-000" target="_blank" rel="noreferrer noopener"><strong>Custom Choice</strong></a> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> Borrowers who want a competitive interest rate and strong borrower benefits.</p>


<h3><a href="https://partner.earnest.com/referral/184db7c6-6af6-4fdf-a23f-f9a8ebc2f382?utm_source=sparrow&amp;utm_medium=referral&amp;utm_content=affiliate-000-000" target="_blank" rel="noreferrer noopener"><strong>Earnest</strong></a> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> Borrowers who want a competitive interest rate and flexible repayment options.</p>


<h3><a href="https://student.edly.co/?utm_source=sparrow&amp;utm_campaign=affiliate-000-000"><strong>Edly</strong></a> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> Borrowers who want an income-based repayment (IBR) loan.</p>


<h3><strong><a href="https://www.edvestinu-psl.sparrowfi.com/?utm_source=productSourceCode-580109" target="_blank" rel="noreferrer noopener">EdvestinU</a></strong> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> Borrowers who want to work with a nonprofit that offers flexible repayment plans.</p>


<h3><a href="https://www.funding-u.com/referrer/Sparrow?cm=&amp;cn=Sparrow&amp;cs=Sparrow&amp;redirect_path=%2F&amp;utm_campaign=Sparrow&amp;utm_medium=&amp;utm_source=Sparrow&amp;referrersubid=" target="_blank" rel="noreferrer noopener"><strong>Funding U</strong></a> – Undergraduate degrees only</h3>


<p><strong>Best for:</strong> Borrowers that were high-achieving undergraduate students.</p>


<h3><a href="https://www.investedindiana.org/lending/student-loan/indiana-student-loan/?ref=SPRaffiliate-000-000"><strong>INvestED</strong></a> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> Borrowers who are residents of or students in Indiana.</p>


<h3><a href="https://lendkey.qbh8ac.net/c/2776865/217757/3788" target="_blank" rel="noreferrer noopener"><strong>LendKey</strong></a> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> Borrowers that want to work with a credit union or community bank.</p>


<h3><a href="https://www.mpowerfinancing.com/get-a-loan/?utm_source=sparrowfi&amp;utm_medium=link&amp;utm_term=website&amp;utm_content=lender-box&amp;sub_id=affiliate-000-000"><strong>MPOWER</strong></a> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> International and DACA borrowers without a cosigner.</p>


<h3><strong><a href="https://www.nelnetbank.com/partners/sparrow-school-loans/?utm_source=sparrow&amp;utm_medium=paidreferral&amp;utm_campaign=psl_sparrow_referral&amp;product_code=s&amp;subID=123456789">Nelnet Bank</a></strong> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> Borrowers who want competitive interest rates and a flexible forbearance policy.</p>


<h3><a href="https://prodigyfinance.com/?utm_source=Sparrow-affiliate-000-000&amp;utm_medium=website&amp;utm_content=homepage&amp;utm_campaign=partners-Sparrow-affiliate-000-000" target="_blank" rel="noreferrer noopener"><strong>Prodigy Finance</strong></a> – Graduate degrees only</h3>


<p><strong>Best for:</strong> International student borrowers with no cosigner.</p>


<h3><a href="http://www.salliemae.com/studentloans/sparrowfi" target="_blank" rel="noreferrer noopener"><strong>Sallie Mae</strong></a> – Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> Borrowers who want competitive interest rates and a flexible repayment plan.</p>


<h3><strong><a href="https://refer.sofi.com/c/2776865/846867/11190?adcampaigngroup=inschool&amp;adnetwork=BD&amp;sharedID=" target="_blank" rel="noreferrer noopener">SoFi</a> </strong>– Both undergraduate and graduate degrees</h3>


<p><strong>Best for:</strong> Borrowers with a strong credit score or a creditworthy cosigner.</p>


<h2><strong>What is a Good Interest Rate?</strong></h2>
<p>Interest rates will vary significantly based on the lender and type of loan. So, there really isn’t a specific threshold of what is considered a “good” interest rate. Generally speaking, however, an <a href="https://www.sparrowfi.com/blog/how-student-loan-interest-actually-works">interest rate</a> at or above 10% is considered very high, while interest rates less than 7% are on the lower end.</p>
<p> </p>
<p>Across <em>all </em>student loans, <a href="https://educationdata.org/average-student-loan-interest-rate">5.8%</a> is the average interest rate. Use the average interest rate as a marker when determining if the interest rate offered to you is good.</p>

<h2>Key Considerations Beyond Interest Rates</h2>
<p>While the interest rate on your student loan is an incredibly important factor, it is only one piece of a much more complex puzzle. When selecting a student loan, you should also <a href="https://www.sparrowfi.com/blog/how-do-i-compare-student-loans">consider factors</a> such as whether the interest rate is fixed or variable, the repayment period, and the projected monthly payment.</p>


Compare rates now

Compare personalized student loan rates

<h3><strong>Choosing the Right Rate Type</strong></h3>
<p>A fixed interest rate will remain the same throughout the life of the loan, while a variable interest rate is subject to change due to market conditions. So, if you borrowed a loan with a 5% fixed interest rate, it would remain at a 5% interest rate up until the day you pay it off. On the other hand, if you borrowed a loan with a variable interest rate starting at 5%, the rate could fluctuate up and down throughout the life of the loan.</p>
<p> </p>
<p>There are <a href="https://www.sparrowfi.com/blog/which-is-better-variable-vs-fixed-interest-rate-student-loans">pros and cons</a> to both fixed and variable rate loans. Select the option you feel most comfortable with.</p>

<h3><strong>Repayment Period</strong></h3>
<p>Generally speaking, the longer the <a href="https://www.sparrowfi.com/blog/whats-the-best-repayment-plan-for-private-student-loans">repayment period</a>, the more you will pay over the life of the loan. Consider the repayment periods offered to you and how they will impact what you pay throughout repayment.</p>


<p>With a shorter repayment period, you will have larger monthly payments. However, if you’re able to afford them, a shorter repayment period can save you quite a bit over the life of the loan.</p>


<h3><strong>Projected Monthly Payment</strong></h3>
<p>During repayment, you will be required to make at <em>least </em>the minimum monthly payment on your loan. As illustrated by the table above, the monthly payment will change based on the repayment period and interest rate you have.</p>
<p> </p>
<p>Some private student lenders may only offer one or two repayment periods. Before agreeing to a student loan, consider the projected monthly payment amount. If the amount does not seem feasible for you given your projected monthly income after graduation, you may want to explore other student loan options.</p>

<h2><strong>How to Find the Best Student Loan Rate</strong></h2>
<p>Before agreeing to any loan, it’s important to do your research. To simplify the search process, we built <a href="https://www.sparrowfi.com/student-loan-info">Sparrow</a>.</p>
<p> </p>
<p>Rather than hopping from site to site comparing loans one by one, Sparrow allows you to compare personalized, pre-qualified student loan rates from 15+ lenders in one form. To find the best student loan rate for you, <a href="https://www.sparrowfi.com/sign-up">start the process</a> with Sparrow.</p>

<p><em>Sparrow&#8217;s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.</em></p>


Student loans serve as a valuable resource to bridge financial gaps when scholarships, grants, and other forms of aid fall short. However, it's important to note that student loans come with a cost. In addition to repaying the principal balance (the initial borrowed amount), student loans also accrue interest. These interest rates play a crucial role in determining the total amount owed and significantly impact monthly payments. Before committing to a loan, compare interest rates to ensure that your debt will be manageable after graduation.

Below we’ve listed our top-rated student loan options with the lowest advertised interest rates. Keep in mind that only the most creditworthy borrowers will receive the lowest rates available, and that variable rates can increase in the future.

<strong>Best for:</strong> Residents of, or student in, Texas.

<h3><a href="https://www.collegeavestudentloans.com/application/?SC=CAIS01&amp;ACT=US&amp;utm_campaign=affiliate%20ongoing&amp;utm_source=sparrow&amp;utm_medium=aggregator&amp;utm_content=apply&amp;brand=college%20ave&amp;product=inschool&amp;p_aff=sparrow&amp;goal=acquisition&amp;agg_ref_id=affiliate-000-000" target="_blank" rel="noreferrer noopener"><strong>College Ave</strong></a> – Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> Borrowers looking for a repayment term that matches their budget.

<h3><a href="https://www.customchoice.com/?referrer_link=SPROaffiliate-000-000" target="_blank" rel="noreferrer noopener"><strong>Custom Choice</strong></a> – Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> Borrowers who want a competitive interest rate and strong borrower benefits.

<h3><a href="https://partner.earnest.com/referral/184db7c6-6af6-4fdf-a23f-f9a8ebc2f382?utm_source=sparrow&amp;utm_medium=referral&amp;utm_content=affiliate-000-000" target="_blank" rel="noreferrer noopener"><strong>Earnest</strong></a> – Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> Borrowers who want a competitive interest rate and flexible repayment options.

<h3><a href="https://student.edly.co/?utm_source=sparrow&amp;utm_campaign=affiliate-000-000"><strong>Edly</strong></a> – Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> Borrowers who want an income-based repayment (IBR) loan.

<h3><strong><a href="https://www.edvestinu-psl.sparrowfi.com/?utm_source=productSourceCode-580109" target="_blank" rel="noreferrer noopener">EdvestinU</a></strong> – Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> Borrowers who want to work with a nonprofit that offers flexible repayment plans.

<h3><a href="https://www.funding-u.com/referrer/Sparrow?cm=&amp;cn=Sparrow&amp;cs=Sparrow&amp;redirect_path=%2F&amp;utm_campaign=Sparrow&amp;utm_medium=&amp;utm_source=Sparrow&amp;referrersubid=" target="_blank" rel="noreferrer noopener"><strong>Funding U</strong></a> – Undergraduate degrees only</h3>

<strong>Best for:</strong> Borrowers that were high-achieving undergraduate students.

<h2><strong>Best Student Loan Rates of April 2024</strong></h2>

<h3><a href="https://www.investedindiana.org/lending/student-loan/indiana-student-loan/?ref=SPRaffiliate-000-000"><strong>INvestED</strong></a> – Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> Borrowers who are residents of or students in Indiana.

<h3><a href="https://lendkey.qbh8ac.net/c/2776865/217757/3788" target="_blank" rel="noreferrer noopener"><strong>LendKey</strong></a> – Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> Borrowers that want to work with a credit union or community bank.

<h3><a href="https://www.mpowerfinancing.com/get-a-loan/?utm_source=sparrowfi&amp;utm_medium=link&amp;utm_term=website&amp;utm_content=lender-box&amp;sub_id=affiliate-000-000"><strong>MPOWER</strong></a> – Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> International and DACA borrowers without a cosigner.

<h3><strong><a href="https://www.nelnetbank.com/partners/sparrow-school-loans/?utm_source=sparrow&amp;utm_medium=paidreferral&amp;utm_campaign=psl_sparrow_referral&amp;product_code=s&amp;subID=123456789">Nelnet Bank</a></strong> – Both undergraduate and graduate degrees</h3>

<h3><strong><a href="https://asla.accountcenter.studentloan.org/inschool/welcome?ref=arspar&amp;utm_source=sparrow&amp;utm_medium=referral&amp;utm_campaign=spar-is&amp;qfid=affiliate-000-000" target="_blank" rel="noreferrer noopener">Arkansas Student Loan Authority</a> (ASLA)</strong> – Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> Borrowers who want competitive interest rates and a flexible forbearance policy.

<h3><a href="https://prodigyfinance.com/?utm_source=Sparrow-affiliate-000-000&amp;utm_medium=website&amp;utm_content=homepage&amp;utm_campaign=partners-Sparrow-affiliate-000-000" target="_blank" rel="noreferrer noopener"><strong>Prodigy Finance</strong></a> – Graduate degrees only</h3>

<strong>Best for:</strong> International student borrowers with no cosigner.

<h3><a href="http://www.salliemae.com/studentloans/sparrowfi" target="_blank" rel="noreferrer noopener"><strong>Sallie Mae</strong></a> – Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> Borrowers who want competitive interest rates and a flexible repayment plan.

<h3><strong><a href="https://refer.sofi.com/c/2776865/846867/11190?adcampaigngroup=inschool&amp;adnetwork=BD&amp;sharedID=" target="_blank" rel="noreferrer noopener">SoFi</a> </strong>– Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> Borrowers with a strong credit score or a creditworthy cosigner.

<h2><strong>What is a Good Interest Rate?</strong></h2>
Interest rates will vary significantly based on the lender and type of loan. So, there really isn’t a specific threshold of what is considered a “good” interest rate. Generally speaking, however, an <a href="https://www.sparrowfi.com/blog/how-student-loan-interest-actually-works">interest rate</a> at or above 10% is considered very high, while interest rates less than 7% are on the lower end.

 

Across <em>all </em>student loans, <a href="https://educationdata.org/average-student-loan-interest-rate">5.8%</a> is the average interest rate. Use the average interest rate as a marker when determining if the interest rate offered to you is good.

<h2>Key Considerations Beyond Interest Rates</h2>
While the interest rate on your student loan is an incredibly important factor, it is only one piece of a much more complex puzzle. When selecting a student loan, you should also <a href="https://www.sparrowfi.com/blog/how-do-i-compare-student-loans">consider factors</a> such as whether the interest rate is fixed or variable, the repayment period, and the projected monthly payment.

<h3><strong>Choosing the Right Rate Type</strong></h3>
A fixed interest rate will remain the same throughout the life of the loan, while a variable interest rate is subject to change due to market conditions. So, if you borrowed a loan with a 5% fixed interest rate, it would remain at a 5% interest rate up until the day you pay it off. On the other hand, if you borrowed a loan with a variable interest rate starting at 5%, the rate could fluctuate up and down throughout the life of the loan.

 

There are <a href="https://www.sparrowfi.com/blog/which-is-better-variable-vs-fixed-interest-rate-student-loans">pros and cons</a> to both fixed and variable rate loans. Select the option you feel most comfortable with.

<h3><strong>Repayment Period</strong></h3>
Generally speaking, the longer the <a href="https://www.sparrowfi.com/blog/whats-the-best-repayment-plan-for-private-student-loans">repayment period</a>, the more you will pay over the life of the loan. Consider the repayment periods offered to you and how they will impact what you pay throughout repayment.

With a shorter repayment period, you will have larger monthly payments. However, if you’re able to afford them, a shorter repayment period can save you quite a bit over the life of the loan.

<h3><strong>Projected Monthly Payment</strong></h3>
During repayment, you will be required to make at <em>least </em>the minimum monthly payment on your loan. As illustrated by the table above, the monthly payment will change based on the repayment period and interest rate you have.

 

Some private student lenders may only offer one or two repayment periods. Before agreeing to a student loan, consider the projected monthly payment amount. If the amount does not seem feasible for you given your projected monthly income after graduation, you may want to explore other student loan options.

<strong>Best for:</strong> Residents of, or students in, Arkansas.

<h2><strong>How to Find the Best Student Loan Rate</strong></h2>
Before agreeing to any loan, it’s important to do your research. To simplify the search process, we built <a href="https://www.sparrowfi.com/student-loan-info">Sparrow</a>.

 

Rather than hopping from site to site comparing loans one by one, Sparrow allows you to compare personalized, pre-qualified student loan rates from 15+ lenders in one form. To find the best student loan rate for you, <a href="https://www.sparrowfi.com/sign-up">start the process</a> with Sparrow.

<em>Sparrow's goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.</em>

<h3><a href="https://www.ascentfunding.com/college-loans/sparrow/?utm_source=partner&amp;utm_medium=sparrowfi_rev_learn_subid--affiliate-000-000" target="_blank" rel="noreferrer noopener"><strong>Ascent</strong></a> – Both undergraduate and graduate degrees</h3>

<strong>Best for:</strong> International and DACA students who have a lower credit score.

<h3><a href="https://studentloans.com/student-loan-options.html?mc=0000009i" target="_blank" rel="noreferrer noopener"><strong>Brazos</strong></a> – Both undergraduate and graduate degrees</h3>

The interest rate on your student loan(s) will drastically impact how much you pay over the life of the loan. Even a small increase in the interest rate could result in thousands of dollars more over your repayment term. Finding a low interest student loan should be of utmost priority when selecting the best option &hellip; Continue reading "Best Student Loan Rates of June 2024"

Best Student Loan Rates of June 2024

Federal Student Loans

Federal Student Loans Archives - Sparrow Nest

<p>Typically, it’s recommended that borrowers have a good credit score to access competitive student loan offers. But what if you have no credit at all?</p>
<p>Don’t fret — there are a variety of student loan options for borrowers with no credit.</p>
<p>Keep reading to learn how you can get student loans with no credit and to explore our top picks for lenders.</p>


<h2 id="h-can-you-get-student-loans-if-you-don-t-have-credit" class="wp-block-heading"><strong>Can You Get Student Loans if You Don’t Have Credit?</strong></h2>
<p>It depends on the <em>type</em> of loan you are borrowing. For <a href="https://www.sparrowfi.com/blog/how-to-get-federal-student-loans-with-bad-credit">federal loans</a>, you do not need to have credit to qualify. On the flip side, most private student loans will require you to have a <a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">strong credit history</a>.</p>
<p>However, there are still private loan options for those without a credit history. Borrowers can either apply for non-credit-based loan options or have <a href="https://www.sparrowfi.com/blog/what-is-a-private-student-loan-cosigner">a cosigner</a> with a strong credit history cosign their loan. That said, borrowers should consider a cosigned loan option before non-cosigned, non-credit-based loans because the interest rates can be higher for the latter.</p>


<h2 id="h-student-loan-options-if-you-have-no-credit" class="wp-block-heading"><strong>Student Loan Options if You Have No Credit</strong></h2>
<p>There are plenty of loan options available for prospective borrowers without any credit.</p>
<h3 id="h-federal-student-loans" class="wp-block-heading"><strong>Federal Student Loans</strong></h3>
<p>Experts recommend that borrowers exhaust their federal loan options before resorting to private loans. Federal loans have <a href="https://www.sparrowfi.com/blog/what-is-the-average-federal-student-loan-interest-rate">controlled interest rates</a>, strong borrower benefits, and various<a href="https://www.sparrowfi.com/blog/how-to-select-the-best-federal-student-loan-repayment-option"> repayment plans</a>, making them the preferred option.</p>
<p>Generally, most federal student loans have fixed interest rates that are set by Congress. This means that the interest rate on the loan will never change, protecting your interest rate from fluctuations due to the economy.</p>
<p>To borrow a federal student loan, you’ll need to <a href="https://www.sparrowfi.com/blog/6-simple-steps-to-fill-out-fafsa">submit the Free Application for Federal Student Aid (FAFSA)</a>. The FAFSA opens on October 1st and closes on June 30th.</p>


<h3 id="h-private-student-loans" class="wp-block-heading"><strong>Private Student Loans</strong></h3>
<p>If you opt for private student loans, look into the lenders below. Rather than searching for lenders one-by-one, we recommend comparing your no credit options with an automated <a href="https://www.sparrowfi.com/">student loan search tool</a>. With the free <a href="https://www.sparrowfi.com/sign-up">Sparrow application</a>, you can see the rates and terms you’d qualify for with 17+ premier lenders.</p>
<p><strong>Here are the best private student loans for no credit</strong>:</p>


<h4 id="h-ascent-non-cosigned-outcomes-based-loan" class="wp-block-heading"><strong><a href="https://www.ascentfunding.com/college-loans/sparrow/?utm_source=partner&amp;utm_medium=sparrowfi_rev_learn_subid--affiliate-000-000" target="_blank" rel="noreferrer noopener">Ascent Non-Cosigned, Outcomes-Based Loan</a></strong></h4>
<p><a href="https://www.sparrowfi.com/blog/ascent-student-loan-review">Ascent’s</a> Non-Cosigned, Outcomes-Based loan is a great option for high school upperclassmen (including DACA recipients and international students) with limited credit/income and no cosigner. Qualifying students must have a GPA above 2.9.</p>


<h4 id="h-edly-ibr-loan" class="wp-block-heading"><strong><a href="https://student.edly.co/?utm_source=sparrow&amp;utm_campaign=affiliate-000-000" target="_blank" rel="noreferrer noopener">Edly IBR Loan</a></strong></h4>
<p>Edly’s income-based repayment (IBR) loan is not like your average student loan. Students who are approved for an <a href="https://www.sparrowfi.com/blog/edly-private-student-loans-review">Edly IBR loan</a> do not make payments during school but can make payments based on their income after graduation.</p>
<p>IBR loans are best for borrowers who want a loan that doesn’t require a cosigner or have a minimum credit score, <em>in addition</em> to flexible repayment plans and competitive repayment terms.</p>
<p>The APR on an IBR loan depends on your projected income, but the Edly IBR loan has a maximum 24% APR.</p>


<h4 id="h-funding-u" class="wp-block-heading"><strong><a href="https://www.funding-u.com/referrer/Sparrow?cm=&amp;cn=Sparrow&amp;cs=Sparrow&amp;redirect_path=%2F&amp;utm_campaign=Sparrow&amp;utm_medium=&amp;utm_source=Sparrow&amp;referrersubid=" target="_blank" rel="noreferrer noopener">Funding U</a></strong></h4>
<p>If you are a high-achieving undergraduate student with limited credit history and income, <a href="https://www.sparrowfi.com/blog/funding-u-private-student-loan-review">Funding U</a> is the lender for you.</p>
<p>Funding U offers student loans <em>without</em> a cosigner, credit history, or income. Your eligibility as a borrower depends on your GPA and estimated future earnings.</p>


<h4 id="h-mpower" class="wp-block-heading"><strong><a href="https://www.mpowerfinancing.com/get-a-loan/?utm_source=sparrowfi&amp;utm_medium=link&amp;utm_term=website&amp;utm_content=lender-box&amp;sub_id=affiliate-000-000" target="_blank" rel="noreferrer noopener">MPOWER</a></strong></h4>
<p>MPOWER offers non-cosigned loans to domestic, international, and DACA undergraduate and graduate students. <a href="https://www.sparrowfi.com/blog/mpower-private-student-loan-review">MPOWER</a> is available in all 50 states and offers special discount rates for responsible borrowing.</p>


<h2 id="h-closing-thoughts-from-the-nest" class="wp-block-heading"><strong>Closing Thoughts from the Nest</strong></h2>
<p>As a borrower, finding the best loan option for you is important for your future finances. As you sift through your options, be sure to compare loans across interest rates, repayment plans, and borrower protections.</p>
<p>To <a href="https://www.sparrowfi.com/">check your rates across multiple lenders at once</a>, consider using <a href="https://www.app.sparrowfi.com/login/type">Sparrow&#8217;s free search engine</a>. You can review personalized offers from over 15 different lenders <em>without</em> harming your credit score.</p>


Typically, it’s recommended that borrowers have a good credit score to access competitive student loan offers. But what if you have no credit at all?

Don’t fret — there are a variety of student loan options for borrowers with no credit.

Keep reading to learn how you can get student loans with no credit and to explore our top picks for lenders.

<h4 id="h-mpower" class="wp-block-heading"><strong><a href="https://www.mpowerfinancing.com/get-a-loan/?utm_source=sparrowfi&amp;utm_medium=link&amp;utm_term=website&amp;utm_content=lender-box&amp;sub_id=affiliate-000-000" target="_blank" rel="noreferrer noopener">MPOWER</a></strong></h4>
MPOWER offers non-cosigned loans to domestic, international, and DACA undergraduate and graduate students. <a href="https://www.sparrowfi.com/blog/mpower-private-student-loan-review">MPOWER</a> is available in all 50 states and offers special discount rates for responsible borrowing.

<h2 id="h-closing-thoughts-from-the-nest" class="wp-block-heading"><strong>Closing Thoughts from the Nest</strong></h2>
As a borrower, finding the best loan option for you is important for your future finances. As you sift through your options, be sure to compare loans across interest rates, repayment plans, and borrower protections.

To <a href="https://www.sparrowfi.com/">check your rates across multiple lenders at once</a>, consider using <a href="https://www.app.sparrowfi.com/login/type">Sparrow's free search engine</a>. You can review personalized offers from over 15 different lenders <em>without</em> harming your credit score.

<h2 id="h-can-you-get-student-loans-if-you-don-t-have-credit" class="wp-block-heading"><strong>Can You Get Student Loans if You Don’t Have Credit?</strong></h2>
It depends on the <em>type</em> of loan you are borrowing. For <a href="https://www.sparrowfi.com/blog/how-to-get-federal-student-loans-with-bad-credit">federal loans</a>, you do not need to have credit to qualify. On the flip side, most private student loans will require you to have a <a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">strong credit history</a>.

However, there are still private loan options for those without a credit history. Borrowers can either apply for non-credit-based loan options or have <a href="https://www.sparrowfi.com/blog/what-is-a-private-student-loan-cosigner">a cosigner</a> with a strong credit history cosign their loan. That said, borrowers should consider a cosigned loan option before non-cosigned, non-credit-based loans because the interest rates can be higher for the latter.

<h2 id="h-student-loan-options-if-you-have-no-credit" class="wp-block-heading"><strong>Student Loan Options if You Have No Credit</strong></h2>
There are plenty of loan options available for prospective borrowers without any credit.
<h3 id="h-federal-student-loans" class="wp-block-heading"><strong>Federal Student Loans</strong></h3>
Experts recommend that borrowers exhaust their federal loan options before resorting to private loans. Federal loans have <a href="https://www.sparrowfi.com/blog/what-is-the-average-federal-student-loan-interest-rate">controlled interest rates</a>, strong borrower benefits, and various<a href="https://www.sparrowfi.com/blog/how-to-select-the-best-federal-student-loan-repayment-option"> repayment plans</a>, making them the preferred option.

Generally, most federal student loans have fixed interest rates that are set by Congress. This means that the interest rate on the loan will never change, protecting your interest rate from fluctuations due to the economy.

To borrow a federal student loan, you’ll need to <a href="https://www.sparrowfi.com/blog/6-simple-steps-to-fill-out-fafsa">submit the Free Application for Federal Student Aid (FAFSA)</a>. The FAFSA opens on October 1st and closes on June 30th.

<h3 id="h-private-student-loans" class="wp-block-heading"><strong>Private Student Loans</strong></h3>
If you opt for private student loans, look into the lenders below. Rather than searching for lenders one-by-one, we recommend comparing your no credit options with an automated <a href="https://www.sparrowfi.com/">student loan search tool</a>. With the free <a href="https://www.sparrowfi.com/sign-up">Sparrow application</a>, you can see the rates and terms you’d qualify for with 17+ premier lenders.

<strong>Here are the best private student loans for no credit</strong>:

<h4 id="h-ascent-non-cosigned-outcomes-based-loan" class="wp-block-heading"><strong><a href="https://www.ascentfunding.com/college-loans/sparrow/?utm_source=partner&amp;utm_medium=sparrowfi_rev_learn_subid--affiliate-000-000" target="_blank" rel="noreferrer noopener">Ascent Non-Cosigned, Outcomes-Based Loan</a></strong></h4>
<a href="https://www.sparrowfi.com/blog/ascent-student-loan-review">Ascent’s</a> Non-Cosigned, Outcomes-Based loan is a great option for high school upperclassmen (including DACA recipients and international students) with limited credit/income and no cosigner. Qualifying students must have a GPA above 2.9.

<h4 id="h-edly-ibr-loan" class="wp-block-heading"><strong><a href="https://student.edly.co/?utm_source=sparrow&amp;utm_campaign=affiliate-000-000" target="_blank" rel="noreferrer noopener">Edly IBR Loan</a></strong></h4>
Edly’s income-based repayment (IBR) loan is not like your average student loan. Students who are approved for an <a href="https://www.sparrowfi.com/blog/edly-private-student-loans-review">Edly IBR loan</a> do not make payments during school but can make payments based on their income after graduation.

IBR loans are best for borrowers who want a loan that doesn’t require a cosigner or have a minimum credit score, <em>in addition</em> to flexible repayment plans and competitive repayment terms.

The APR on an IBR loan depends on your projected income, but the Edly IBR loan has a maximum 24% APR.

<h4 id="h-funding-u" class="wp-block-heading"><strong><a href="https://www.funding-u.com/referrer/Sparrow?cm=&amp;cn=Sparrow&amp;cs=Sparrow&amp;redirect_path=%2F&amp;utm_campaign=Sparrow&amp;utm_medium=&amp;utm_source=Sparrow&amp;referrersubid=" target="_blank" rel="noreferrer noopener">Funding U</a></strong></h4>
If you are a high-achieving undergraduate student with limited credit history and income, <a href="https://www.sparrowfi.com/blog/funding-u-private-student-loan-review">Funding U</a> is the lender for you.

Funding U offers student loans <em>without</em> a cosigner, credit history, or income. Your eligibility as a borrower depends on your GPA and estimated future earnings.

Here are the best private student loans for no credit: Funding U offers loans without a cosigner or credit history. See more options...

How to Get Student Loans with No Credit (June 2024)

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Abigail Eun

<p>Given the <a href="https://www.sparrowfi.com/blog/the-average-cost-of-college-in-the-united-states">rising cost of college</a>, finding affordable college financing is more important than ever. As a parent, it’s both understandable and admirable to want to support your child through the process of paying for college. It&#8217;s essential that you have the tools to pick the best college loan.</p>
<p>If you’re curious about your parent loan options, you’re in the right place. Here’s what you need to know to pick the best college loan for parents.</p>


<h2 id="best-parent-loans" class="wp-block-heading"><strong>Best College Loans for Parents</strong></h2>
<p>The best parent loan for you will ultimately be the one that suits your needs best. However, having a list of options that offer competitive interest rates, flexible repayment options, and strong customer service will make the search process easier.</p>
<p>The following are our top picks for the best private college loans for parents.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/parent-student-loan">Compare best student loan rates for parents</a></p>


<h2 id="parent-loans-traditional" class="wp-block-heading"><strong>Parent Loans vs. Traditional Private Student Loans</strong></h2>
<p>While parent loans and traditional private student loans are similar in nature, there are some key differences you’ll want to consider before choosing one over the other.</p>
<p>A parent loan allows you to borrow on behalf of your child to finance their education. While you may require your child to make payments directly to you, you are legally the sole person responsible for paying back the loan.</p>
<p>A traditional student loan, however, is one that your child borrows on their own behalf. If you cosign the student loan, <em>both </em>you and your child are legally responsible for paying back the loan.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/how-to-apply-for-student-loans-step-by-step-guide">How to apply for a student loan</a></p>


<h2 id="compare-parent-loans" class="wp-block-heading"><strong>How to Compare College Loans for Parents</strong></h2>
<p>Both federal and private lenders offer parent loans. While similar in that parents can borrow both loan types on behalf of their child, they differ in several ways.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/who-is-eligible-for-a-student-loan-what-you-need-to-qualify">Student loan eligibility: Federal and Private loans</a></p>


<h3 class="wp-block-heading"><strong>Federal Parent PLUS Loan</strong></h3>
<p>The only federal student loan parents can borrow on behalf of their child is the Parent PLUS Loan. To <a href="https://studentaid.gov/understand-aid/types/loans/plus/parent">receive a Parent PLUS Loan</a>, you must:</p>
<ul>
<li>Be the biological or adoptive parent of a dependent undergraduate student who is enrolled at least half-time at an eligible school</li>
<li>Not have an adverse credit history</li>
<li>Meet the general requirements to receive federal student aid</li>
</ul>
<p>The interest rate for Parent PLUS Loans is fixed and set by the government each year. For Parent PLUS Loans disbursed on or after July 1, 2022 and before July 1, 2023, the interest rate is <a href="https://studentaid.gov/understand-aid/types/loans/plus/parent">7.54%</a>.</p>
<p>Like other federal student loans, Parent PLUS Loans have the opportunity to be forgiven, which is <em>not </em>available for private student loans. This is an important factor to consider if you plan to pursue any <a href="https://www.sparrowfi.com/blog/parent-plus-loan-forgiveness-everything-you-need-to-know">loan forgiveness programs</a>.</p>
<p><strong>&gt;&gt; MORE:</strong> <a href="https://www.sparrowfi.com/blog/parent-plus-loan-forgiveness-everything-you-need-to-know">Parent PLUS loan forgiveness: Everything you need to know</a></p>
<p>Before borrowing a Parent PLUS Loan, you should <a href="https://www.sparrowfi.com/sign-up">check to see what rates you qualify for</a> in private parent loans. You may find that some private lenders are able to offer you rates lower than the Parent PLUS Loan interest rate.</p>


<h3 class="wp-block-heading"><strong>Private Parent Loans</strong></h3>
<p>Private parent loans are provided by private student loan lenders. Unlike federal Parent PLUS Loans, each individual private lender will offer different interest rates and terms. The eligibility criteria for private parent loans will vary, but in general, you must:</p>
<ul>
<li>Meet income and/or credit requirements</li>
<li>Be borrowing on behalf of a student attending an eligible school</li>
</ul>
<p>While it is commonly assumed that private student loans <em>always </em>have higher interest rates than federal student loans, that isn’t necessarily true. You should always compare both federal and private parent loan options before agreeing to one or the other.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/who-is-eligible-for-a-student-loan-what-you-need-to-qualify">Federal vs Private student loans: Comparison</a></p>


<h2><strong>Commonly Asked Questions About College Loans for Parents</strong></h2>
<p></p>
<h3 class="wp-block-heading"><strong>What is the best way for parents to pay for college?</strong></h3>
<p>There is no single best way for parents to pay for their child’s college education. Generally speaking, however, you should begin by encouraging your child to pursue <a href="https://www.sparrowfi.com/blog/top-6-college-scholarship-sites">scholarship</a> and grant opportunities. Both forms of aid do <em>not </em>need to be repaid.</p>
<p>Following that, consider what you’re able to <a href="https://www.sparrowfi.com/blog/the-best-ways-to-start-saving-for-college">contribute out-of-pocket</a>. It’s important to minimize the amount you need to borrow.</p>
<p>After you’ve exhausted both options, consider both federal and private student loans.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">What are the different types of financial aid</a></p>

<h3><strong>Is it better to borrow a Parent PLUS Loan or a private parent loan?</strong></h3>
<p>One option isn’t necessarily better than the other. If you plan to pursue any loan forgiveness programs, you may prefer a Parent PLUS Loan over a private parent loan. If you are more concerned with finding a competitive interest rate, however, you may find that a private parent loan suits you better.</p>


<h3 class="wp-block-heading"><strong>Do parents need good credit for student loans?</strong></h3>
<p>It depends on the lender. While most federal student loans do <em>not </em><a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">factor your credit score</a> into your eligibility, private student loans often do. That said, there are a variety of private student lenders that work with parent borrowers with lower credit scores.</p>
<p><strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/best-student-loans-for-parents-with-bad-credit">Best student loans for parents with bad credit</a></p>


<h3 class="wp-block-heading"><strong>How much can parents borrow for student loans?</strong></h3>
<p>In Parent PLUS Loans, you may be eligible to borrow up to the cost of attendance at your child’s school minus any other aid your child receives.</p>
<p>In private parent loans, the <a href="https://www.sparrowfi.com/blog/student-loan-limits-how-much-can-you-borrow-in-student-loans">borrowing limit</a> will vary by lender.</p>


<h3 class="wp-block-heading"><strong>How do parents take out loans for college?</strong></h3>
<p>To borrow Parent PLUS Loans, complete the <a href="https://studentaid.gov/plus-app/">PLUS Loan application</a> online.</p>
<p>To borrow private parent loans, see what rates you qualify for by completing the <a href="https://www.sparrowfi.com/sign-up">Sparrow application</a>. In less than 3 minutes, we’ll show you which parent loans you qualify for and at what rates.</p>


<h2 class="wp-block-heading"><strong>Final Thoughts from the Nest</strong></h2>
<p> </p>
<p>There are a variety of parent loan options available, and while beneficial, it can make the process of picking the best option overwhelming. To simplify the process, start with Sparrow. Rather than searching endlessly for a parent loan that works for you, fill out the <a href="https://www.sparrowfi.com/sign-up">Sparrow form</a>, and we’ll do the search for you. We’ll show you which parent loans you pre-qualify for and at what rate so you can find the best option for you.</p>

<p><em>Sparrow&#8217;s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.</em></p>
<p><em>Some rates listed may include an Autopay Discount, which requires you to agree to make your monthly payments by an automatic monthly deduction (ACH) from a valid bank account. To verify whether the interest rates listed include an Autopay Discount, please read the individual lender disclosures.</em></p>


Given the <a href="https://www.sparrowfi.com/blog/the-average-cost-of-college-in-the-united-states">rising cost of college</a>, finding affordable college financing is more important than ever. As a parent, it’s both understandable and admirable to want to support your child through the process of paying for college. It's essential that you have the tools to pick the best college loan.

If you’re curious about your parent loan options, you’re in the right place. Here’s what you need to know to pick the best college loan for parents.

<h3><strong>Is it better to borrow a Parent PLUS Loan or a private parent loan?</strong></h3>
One option isn’t necessarily better than the other. If you plan to pursue any loan forgiveness programs, you may prefer a Parent PLUS Loan over a private parent loan. If you are more concerned with finding a competitive interest rate, however, you may find that a private parent loan suits you better.

<h3 class="wp-block-heading"><strong>Do parents need good credit for student loans?</strong></h3>
It depends on the lender. While most federal student loans do <em>not </em><a href="https://www.sparrowfi.com/blog/what-credit-score-is-needed-for-a-student-loan">factor your credit score</a> into your eligibility, private student loans often do. That said, there are a variety of private student lenders that work with parent borrowers with lower credit scores.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/best-student-loans-for-parents-with-bad-credit">Best student loans for parents with bad credit</a>

<h3 class="wp-block-heading"><strong>How much can parents borrow for student loans?</strong></h3>
In Parent PLUS Loans, you may be eligible to borrow up to the cost of attendance at your child’s school minus any other aid your child receives.

In private parent loans, the <a href="https://www.sparrowfi.com/blog/student-loan-limits-how-much-can-you-borrow-in-student-loans">borrowing limit</a> will vary by lender.

<h3 class="wp-block-heading"><strong>How do parents take out loans for college?</strong></h3>
To borrow Parent PLUS Loans, complete the <a href="https://studentaid.gov/plus-app/">PLUS Loan application</a> online.

To borrow private parent loans, see what rates you qualify for by completing the <a href="https://www.sparrowfi.com/sign-up">Sparrow application</a>. In less than 3 minutes, we’ll show you which parent loans you qualify for and at what rates.

<h2 class="wp-block-heading"><strong>Final Thoughts from the Nest</strong></h2>
 

There are a variety of parent loan options available, and while beneficial, it can make the process of picking the best option overwhelming. To simplify the process, start with Sparrow. Rather than searching endlessly for a parent loan that works for you, fill out the <a href="https://www.sparrowfi.com/sign-up">Sparrow form</a>, and we’ll do the search for you. We’ll show you which parent loans you pre-qualify for and at what rate so you can find the best option for you.

<em>Sparrow's goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.</em>

<em>Some rates listed may include an Autopay Discount, which requires you to agree to make your monthly payments by an automatic monthly deduction (ACH) from a valid bank account. To verify whether the interest rates listed include an Autopay Discount, please read the individual lender disclosures.</em>

<h2 id="best-parent-loans" class="wp-block-heading"><strong>Best College Loans for Parents</strong></h2>
The best parent loan for you will ultimately be the one that suits your needs best. However, having a list of options that offer competitive interest rates, flexible repayment options, and strong customer service will make the search process easier.

The following are our top picks for the best private college loans for parents.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/parent-student-loan">Compare best student loan rates for parents</a>

<h2 id="parent-loans-traditional" class="wp-block-heading"><strong>Parent Loans vs. Traditional Private Student Loans</strong></h2>
While parent loans and traditional private student loans are similar in nature, there are some key differences you’ll want to consider before choosing one over the other.

A parent loan allows you to borrow on behalf of your child to finance their education. While you may require your child to make payments directly to you, you are legally the sole person responsible for paying back the loan.

A traditional student loan, however, is one that your child borrows on their own behalf. If you cosign the student loan, <em>both </em>you and your child are legally responsible for paying back the loan.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/how-to-apply-for-student-loans-step-by-step-guide">How to apply for a student loan</a>

<h2 id="compare-parent-loans" class="wp-block-heading"><strong>How to Compare College Loans for Parents</strong></h2>
Both federal and private lenders offer parent loans. While similar in that parents can borrow both loan types on behalf of their child, they differ in several ways.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/who-is-eligible-for-a-student-loan-what-you-need-to-qualify">Student loan eligibility: Federal and Private loans</a>

<h3 class="wp-block-heading"><strong>Federal Parent PLUS Loan</strong></h3>
The only federal student loan parents can borrow on behalf of their child is the Parent PLUS Loan. To <a href="https://studentaid.gov/understand-aid/types/loans/plus/parent">receive a Parent PLUS Loan</a>, you must:
<ul>
 	<li>Be the biological or adoptive parent of a dependent undergraduate student who is enrolled at least half-time at an eligible school</li>
 	<li>Not have an adverse credit history</li>
 	<li>Meet the general requirements to receive federal student aid</li>
</ul>
The interest rate for Parent PLUS Loans is fixed and set by the government each year. For Parent PLUS Loans disbursed on or after July 1, 2022 and before July 1, 2023, the interest rate is <a href="https://studentaid.gov/understand-aid/types/loans/plus/parent">7.54%</a>.

Like other federal student loans, Parent PLUS Loans have the opportunity to be forgiven, which is <em>not </em>available for private student loans. This is an important factor to consider if you plan to pursue any <a href="https://www.sparrowfi.com/blog/parent-plus-loan-forgiveness-everything-you-need-to-know">loan forgiveness programs</a>.

<strong>&gt;&gt; MORE:</strong> <a href="https://www.sparrowfi.com/blog/parent-plus-loan-forgiveness-everything-you-need-to-know">Parent PLUS loan forgiveness: Everything you need to know</a>

Before borrowing a Parent PLUS Loan, you should <a href="https://www.sparrowfi.com/sign-up">check to see what rates you qualify for</a> in private parent loans. You may find that some private lenders are able to offer you rates lower than the Parent PLUS Loan interest rate.

<h3 class="wp-block-heading"><strong>Private Parent Loans</strong></h3>
Private parent loans are provided by private student loan lenders. Unlike federal Parent PLUS Loans, each individual private lender will offer different interest rates and terms. The eligibility criteria for private parent loans will vary, but in general, you must:
<ul>
 	<li>Meet income and/or credit requirements</li>
 	<li>Be borrowing on behalf of a student attending an eligible school</li>
</ul>
While it is commonly assumed that private student loans <em>always </em>have higher interest rates than federal student loans, that isn’t necessarily true. You should always compare both federal and private parent loan options before agreeing to one or the other.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/who-is-eligible-for-a-student-loan-what-you-need-to-qualify">Federal vs Private student loans: Comparison</a>

<h2><strong>Commonly Asked Questions About College Loans for Parents</strong></h2>

<h3 class="wp-block-heading"><strong>What is the best way for parents to pay for college?</strong></h3>
There is no single best way for parents to pay for their child’s college education. Generally speaking, however, you should begin by encouraging your child to pursue <a href="https://www.sparrowfi.com/blog/top-6-college-scholarship-sites">scholarship</a> and grant opportunities. Both forms of aid do <em>not </em>need to be repaid.

Following that, consider what you’re able to <a href="https://www.sparrowfi.com/blog/the-best-ways-to-start-saving-for-college">contribute out-of-pocket</a>. It’s important to minimize the amount you need to borrow.

After you’ve exhausted both options, consider both federal and private student loans.

<strong>&gt;&gt; MORE: </strong><a href="https://www.sparrowfi.com/blog/the-4-types-of-financial-aid-scholarships-grants-work-study-and-loans">What are the different types of financial aid</a>

Compare 2023's Best College Loans for parents. Low Interest Rates and personalized to the needs of you and your child. Search now.

Best Parent Loans for College of June 2024

Student Loan Refinancing

Student Loan Refinancing Archives - Sparrow Nest

<p>A great way to reduce your student loan debt is to refinance. An important part of that is looking for a good lender that will offer you good terms. In fact, the best refinance companies are going to give you the best terms. But, what do you even look for? And where do you start?</p>


Compare rates from up to 17 lenders in as little as 2 minutes

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