Best Private Student Loans for Undergraduates

Undergraduate students have a wide range of student loan options to choose from, making the selection process that much more important. 

Before agreeing to any one loan, it’s important to understand your options, the pros and cons of each, and how your student loan decision impacts your future.

The following are our top picks for the best private student loans for undergraduates.

The loan options shared are in alphabetical order. Interest rates reflected in this article were last updated on 03/06/23. Rates listed may reflect the lender’s autopay discount. Interest rates are subject to change.

Best Private Student Loans for Undergraduates

Arkansas Student Loan Authority (ASLA)

Fixed Interest Rate: 2.95% to 6.65%
Variable Interest Rate: 4.15% to 8.95%
Maximum Borrowing Limit: Cost of attendance minus other aid; $100,000 lifetime maximum
Minimum Credit Score: 670

Best for: Residents of, or students in, Arkansas.

Apply with ASLA.

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Ascent

Fixed Interest Rates: 4.62% to 14.41% (cosigned); 9.63% to 16.16% (non-cosigned, credit-based); 12.52% to 14.01% (non-cosigned, outcomes-based)
Variable Interest Rates: 5.74% to 14.01% (cosigned); 9.39% to 15.76% (non-cosigned, credit-based); 12.25% to 14.21% (non-cosigned, outcomes-based)
Maximum Borrowing Limit: $200,000
Minimum Credit Score: 540

Best for: International and DACA students who have a lower credit score.

Apply with Ascent.

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Brazos

Fixed Interest Rate: 2.83% to 7.28%
Variable Interest Rate: 4.54% to 8.99%
Maximum Borrowing Limit: Cost of attendance minus other aid
Minimum Credit Score: 700

Best for: Borrowers who are residents of Texas.

Apply with Brazos.

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College Ave

Fixed Interest Rate: 4.49% to 15.32%
Variable Interest Rate: 4.49% to 15.32%
Maximum Borrowing Limit: Cost of attendance minus other aid
Minimum Credit Score: Mid 600s

Best for: Borrowers looking for a repayment term that matches their budget.

Apply with College Ave.

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Custom Choice

Fixed Interest Rate: 3.65% to 12.47%
Variable Interest Rate: 5.67% to 14.19%
Maximum Borrowing Limit: Cost of attendance minus other aid; cannot exceed $99,999 annually or $180,000 cumulatively
Minimum Credit Score: 660 for non-cosigned loans

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

Apply with Custom Choice.

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Earnest

Fixed Interest Rate: 4.79% to 13.70%*
Variable Interest Rate: 4.79% to 13.50%*
Maximum Borrowing Limit: Cost of attendance mins other aid
Minimum Credit Score: 650

Best for: Borrowers who want a competitive interest rate and flexible repayment options.

Apply with Earnest.

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*Rates include a 0.25% AutoPay discount.

Edly

Fixed Interest Rate: 0.25% to 23.00%
Variable Interest Rate: N/A
Maximum Borrowing Limit: $15,000 per academic year (plus $10,000 for summer) and $25,000 lifetime.
Minimum Credit Score: N/A

Best for: Borrowers who don’t have a strong credit score and want an income-based repayment (IBR) loan.

Apply with Edly.

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EDvestinU

Fixed Interest Rate: 4.52% to 9.05%
Variable Interest Rate: 3.37% to 7.14%
Maximum Borrowing Limit: $1,000 to the total cost of attendance
Minimum Credit Score: 675
Best for: Borrowers who want to work with a nonprofit that offers flexible repayment plans.

Apply with EDvestinU.

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Funding U

Fixed Interest Rate: 7.49% to 12.99%
Variable Interest Rate: N/A
Maximum Borrowing Limit: $20,000 per school year
Minimum Credit Score: N/A

Best for: Borrowers that were high-achieving undergraduate students.

Apply with Funding U.

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INvestED

Fixed Interest Rate: 4.61% to 8.67%
Variable Interest Rate: 6.10% to 10.56%
Maximum Borrowing Limit: Cost of attendance minus other aid
Minimum Credit Score: 670

Best for: Borrowers who are residents of or students in Indiana.

Apply with INvestED.

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LendKey

Fixed Interest Rate: 4.89% to 10.39%
Variable Interest Rate: 5.36% to 10.51%
Maximum Borrowing Limit: Cost of attendance minus other aid
Minimum Credit Score: 660

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

Apply with LendKey.

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MPOWER

Fixed Interest Rate: 13.74% maximum (14.75% APR)
Variable Interest Rate: N/A
Maximum Borrowing Limit: $50,000 per semester; $100,000 per year
Minimum Credit Score: N/A

Best for: International and DACA borrowers without a cosigner.

Apply with MPOWER.

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Nelnet Bank

Fixed Interest Rate: 4.49% to 14.57%
Variable Interest Rate: 5.12% to 15.15%
Maximum Borrowing Limit: $125,000 total for undergraduate students; $500,000 total for graduate students
Minimum Credit Score: 680 individually; 640 with a qualified cosigner

Best for: Borrowers who want competitive interest rates and a flexible forbearance policy.

Apply with Nelnet Bank.

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Interest rates listed have an autopay discount only on the lower boundary.

Sallie Mae

Fixed Interest Rate: 3.75% to 13.72%
Variable Interest Rate: 4.00% to 14.34%
Maximum Borrowing Limit: School-certified cost of attendance minus other aid
Minimum Credit Score: Mid 600s

Best for: Borrowers who want competitive interest rates and a flexible repayment plan.

Apply with Sallie Mae.

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SoFi

Fixed Interest Rate: 4.49% to 13.80%
Variable Interest Rate: 4.99% to 13.07%
Maximum Borrowing Limit: Cost of attendance minus other aid
Minimum Credit Score: Does not disclose

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

Apply with SoFi.

View disclosure.

What to Look for in a Student Loan for Undergrad

Before selecting a student loan, you should consider a variety of factors to ensure it’s a good fit for you:

1. Does the loan require a cosigner? Some private student loans will require you to have a cosigner if you do not meet the minimum credit requirements. As an undergraduate, you may not have enough credit history to have a qualifying credit score, and thus, you may need a cosigner. If you do not have access to a creditworthy cosigner, you will want to consider student loan options that do not require a cosigner or have a flexible minimum credit score requirement.
2. What is the interest rate? One of the most important factors of a student loan is the interest rate. The interest rate will determine the cost of borrowing the loan and can drastically change how much you pay over time. The general rule of thumb when it comes to interest rates is the lower the better. Before agreeing to borrow a student loan, make sure to calculate the total cost using a student loan payoff calculator. 
3. Are payments required while in school? While most private student lenders will allow you to defer payments until after graduation, some may require you to make payments while in school. If this won’t be feasible for you, make sure the lender you choose has a deferred repayment option.

What Type of Loan is Best for Undergraduate Students?

Federal student loans will typically have lower interest rates and more flexible repayment options than private student loans. So, you should start the student loan process for undergrad by submitting the FAFSA. The information you provide on the FAFSA will determine your eligibility for federal student loans.

However, if you do not receive federal student loans in your financial aid package, you should consider your private student loan options. Unlike federal student loans, private student loans typically require you to meet certain credit requirements. To see which private student loan options you qualify for without hurting your credit, complete the Sparrow application. 

With that said, the best student loan option will always be the one that works best for you. You should start by considering federal student loan options, then utilize private student loans to fill in any remaining gaps.

How Your Student Loan Choice Impacts Your Future

The student loan you choose as an undergraduate can impact your future quite a bit. Both the interest rate and the loan terms will impact how much you pay over the life of your loan as well as the monthly payment you are responsible for post-graduation.

For example, a $30,000 student loan with a 6% interest rate will cost you $45,568 over a 15-year repayment term. This will break down to a monthly payment of around $253.

By comparing your loan options side-by-side, you may discover another private student loan at a 4% interest rate. This loan option would only cost you $39,943 over a 15-year repayment term, with monthly payments of $222.

The difference in interest would save you nearly $6,000 over the life of the loan and around $30 on your monthly payments. This is why it is crucial to compare your student loan options carefully as an undergraduate student. Your post-grad self will thank you.

Final Thoughts from the Nest

There is no single best private student loan for undergraduates. The best student loan option will always be the one that works best for you. So, be sure to compare your options carefully and select the loan you feel suits you best.

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.