The Best Student Loans Of 2020 - How To Find The Best Loan
Student loans are a huge burden, and also super complicated. But these companies are the best of the best to pay off your loans.
With the average cost of attendance for the 2018/2019 school year at $21,370 for in-state public colleges ($85,480 for four years) and $48,510 at private colleges ($194,040 for four years), student loans have become a virtual necessity for nearly anyone who wants a higher education.

The student debt crisis is on all of our minds. You can hardly escape it these days.

With this humbling reality in mind, I’ve put together this guide of the best student loans. 

The best student loans overview

LenderBest for
EarnestRefinancing
CredibleFast application
Lending TreeRate shopping
SoFiStudent loans AND other loan options

In-depth analysis of the best student loans

Earnest

Earnest Logo - Earnest

Earnest is a good place to start. Earnest is a direct lender that offers student loan refinances only (not new loans).

Features:

  • Interest rate range: Variable interest rates from 2.47% – 6.97% APR, and fixed rates from 3.89% – 7.89% APR (both including an auto-pay discount of 0.25%)
  • Fees: There are no loan fees
  • Prepayment penalty: None
  • How much you can refinance: $5,000 to $500,000
  • Loan terms: Five to 20 years
  • Forbearance: Up to 12 months over the life of the loan. Earnest will also discharge all student loans in the event of death or total and permanent disability

Earnest’s loans options & requirements

Earnest gives loans in all states except Alabama, Delaware, Kentucky, Nevada, and Rhode Island.

Earnest requires that you have a job, or at least a written promise of employment to begin within six months, as well as a minimum credit score of 650.

However, they look beyond your income and credit score and consider future earning potential, your education, and responsible savings and spending patterns, in determining the amount of your loan as well as the rate. 

Get a loan with Earnest now or read our full review

Credible

 credible logo - Credible

Credible is another good option to consider, and the magic word is aggregator. Credible is a student loan aggregator, which means it’s a loan the website that multiple lenders participate in. It offers student loans for both new and current students, as well as student loan refinances. By filling out a single application, you can receive rates from up to eight different lenders. 

Features:

  • Interest rate range: Variable interest rates from 2.80% APR, and fixed rates from 3.39% APR
  • Fees: Generally none, but it depends on the lender selected
  • Prepayment penalty: Generally none, but it depends on the lender selected
  • How much you can refinance: $5,000 to $500,000 to no limit, but it depends on the lender selected
  • Loan terms: Five to 20 years
  • Forbearance: Depends on the lender selected

Credible’s loan options & requirements

Credible offers a choice of either fixed or variable rate loans, as well as deferred and interest-only repayment options. The application can be completed in just two minutes and will open the door to loan rate offers from multiple lenders. Loans can be used to finance almost any degree type.

The other really attractive thing about Credible is that getting rate quotes from them won’t affect your credit score. And no information is shared with lenders while you are shopping.

Get rates with Credible or read our full review

LendingTree 

Lendingtree Logo - Lendingtree

Like Credible, LendingTree is a loan aggregator and not a direct lender. This will give you an opportunity to investigate loan programs available from multiple lenders on the same platform which is mighty convenient.

Features:

  • Interest rate range: Variable rates range from 2.47% – 11.50% APR; fixed rates range from 3.39% – 9.99% APR, but it depends on the specific lender
  • Fees: Depends on the specific lender
  • Prepayment penalty: Generally none, but it depends on the specific lender
  • How much you can refinance: $5,000 to $500,000 to no limit, but depends on the specific lender
  • Loan terms: Five to 20 years
  • Forbearance: Depends on the specific lender

LendingTree’s loan options and requirements

One of the major advantages of LendingTree is that they have loan programs available from lenders for both new student loans and refinances. They also offer programs in all 50 states. 

Since programs are offered by multiple lenders, the specific qualifications and documentation will vary according to each.

However, when you’re filling out your application on the website, you should expect to provide your social security number, a copy of your driver’s license, your most recent income tax return, your parents latest income tax return if required, bank statements, statements regarding business activity, and legal documentation of residency. 

Check your rates with LendingTree.

SoFi

The Best Student Loans Of 2020 - How To Find The Best Loan - SoFiEveryone is talking about peer-to-peer (P2P) lending and SoFi is a peer-to-peer lender specializing in student loan financing. But now SoFi also offers mortgages and personal loans, as well as an investment robo-advisor and high-interest online savings. They’ve handled more than $18 billion in refinanced student loans to more than 250,000 members.

Features:

  • Interest rate range: Variable rates range from 2.560% – 7.295% APR; fixed rates range from 3.899% – 8.024% APR (both including an auto-pay discount of 0.25%)
  • Fees: There are no fees
  • Prepayment penalty: None
  • How much you can refinance: $5,000 to no maximum
  • Loan terms: Five to 20 years
  • Forbearance: Up to 12 months over the life of the loan under the Unemployment Protection plan

SoFi’s loan options & requirements

SoFi offers student loan refinancing, but not original financing for current students. Student loan refinances are available in all 50 states, plus the District of Columbia.

You can refinance both federal and private student loans. To qualify:

  • you must be either a US citizen or permanent resident, who has graduated from a Title IV accredited university or graduate program
  • you must be employed, or have a written job offer to start within 90 days
  • your income must be sufficient to cover your financial obligations, and you must have a minimum credit score of 650

However, if you don’t meet the above qualifications, no worries because you can add a qualified cosigner if you don’t qualify by yourself. But be aware that once a cosigner is added, that person cannot be released from the loan except through death. 

Apply for a SoFi loan or read our full review

Summary of the best student loans

LenderBest for
EarnestRefinancing
CredibleFast application
Lending TreeRate shopping
SoFiStudent loans AND other loan options

What is a student loan? 

A student loan is a special loan taken specifically to finance expenses related to higher education. It can include covering tuition, fees, room and board, and any related expenses. Student loans can be taken to finance undergraduate and graduate education, as well as attendance at a professional school, such as law school or medical school.

The loans are typically unsecured, which is to say they don’t need to be collateralized by the family app德扑圈官方网址home or financial assets. Some loan types don’t even require you to be qualified based on credit or income, while others do.

Meanwhile, some loan types are limited to a specific dollar amount, while others can be used to cover the entire cost of your education.

Federal student loans vs. private student loans

Federal student loans are provided by the US Department of Education, which is an agency of the federal government. While they can be obtained directly from the Department, they are also commonly available through both banks and credit unions, and sometimes directly through the school you’re attending.

The largest federal student loan program is the Direct Loan, which is sometimes called a Stafford Loan. It has four variations:

  • Direct subsidized loans, for undergraduate students with a demonstrated financial need.
  • Direct unsubsidized loans for other students.
  • Direct PLUS loans, for parents of undergraduates or students enrolled in graduate or professional programs.
  • Direct consolidation loans, which gives graduates an opportunity to consolidate multiple federal loans into a single loan. 

When applying for a federal student loan, the applicant needs to complete the Free Application for Federal Student Aid (FAFSA), which can be completed online. It’s the starting point document for the entire process. 

Private student loans are generally provided by banks and credit unions. The loan limits are much higher, often sufficient to cover the entire cost of your education. However, to qualify for a private student loan, you’ll need to do so based on credit and income. If you’re unable to qualify based on your own financial resources, you’ll need to add a cosigner.

When to get a student loan 

You’ll need to get a student loan when the cost to attend college exceeds financial resources available for you or your family.

Those resources can include savings, including dedicated college savings plans, such as a 529 plan, but a Roth IRA could be another option.

How to qualify for a student loan

With federal student loans, you don’t need to qualify based on your income and credit. Nor will they typically require a cosigner. They’re government financing programs specifically designed for those who lack the ability to afford higher education. 

With private student loans, you’ll need to qualify for both income and credit history. Income will need to be sufficient to cover the new loan payment, plus existing recurrent obligations, and your monthly house payment.

You can either qualify for the loan based on your own financial profile or on that have a qualified cosigner.

Student loan important features

Fixed vs. variable loans 

Student loans can be either fixed for the entire term of the loan, or variable, with the interest rate changing based on changes in the general interest rate picture.

Generally speaking, interest rates charged on variable rate loans will be lower. But over the long-term, fixed-rate loans will have lower rates should rates increase substantially in the future. 

Federal student loans come only with fixed rates. Private loans offer either fixed rates or variable.

Maximum loan amounts

For Federal student loans the maximum loan amounts are between $31,000 and $57,500 for undergraduates, and up to $138,500 for graduate students.

Private student loans can have maximum limits of anywhere from $150,000 to $500,000. But some private lenders will extend loan limits to whatever the cost of the student’s education is.

Because of the higher loan limits offered by private student loan lenders, students often have a mix of both federal and private loans. 

Terms

For Federal student loans, loan terms typically run between 10 years and 30 years.

For private loans, most are between five years and 20 years. 

Fees 

Federal student loans require origination fees, which currently range between 1.062% and 4.264% of the loan amount taken.

Private student loans normally don’t charge origination fees or other types of fee. 

APR

Annual Percentage Rate, or APR, is the effective rate on a loan, with both the base interest rate and any required fees added to the calculation.

For example, if you borrow $100,000 and pay a 2% origination fee, the net proceeds of the loan will be $98,000. When a 5% interest rate is calculated on the loan, the APR will be slightly higher, due to the reduced net loan proceeds.

APRs on Federal student loans currently range from 5.05% to 7.60%. 

APR’s on private loans generally match the base interest rate, since there are no fees. They can range between 2.47% and 11.50%.

Deferment 

With Federal student loans, no payments are required until six months after graduation. However, interest accumulates on the principal amount borrowed, which means your loan amount is increasing during the deferment period.

Private student loans come with a wide variety of deferment options. Some may offer a full deferral until you graduate from school. Others may charge a minimum payment, which can be as low as $25 per month while you are in school. And still others will charge interest only while you are in school.

Forbearance and loan forgiveness 

Federal student loans offer both forbearance and loan forgiveness. For example, under the Income Driven Repayment plan your monthly payment can be reduced to a small percentage – usually 10% – of your monthly income. 

Meanwhile, under a Public Service Loan Forgiveness plan your debt can be completely forgiven if you make 120 monthly payments while working full time for either a government agency or a qualifying nonprofit organization.

With private student loans, loan forgiveness is not an option. However, some will provide forbearance if you are experiencing economic hardship, such as unemployment. The specific provisions will vary from one lender to another.

Cosigner release 

Federal student loans don’t generally involve the use of a cosigner, so cosigner release doesn’t apply. However, cosigners are common with private student loans. But many lenders provide a cosigner release provision, that allows you to continue on the loan with your cosigner released from liability.

If a lender does provide a cosigner release, you must typically be able to qualify to carry the loan based on your own financial resources and have a history of making payments on time for between 24 and 48 months.   

Summary

Student loans are truly one of those uber complex things to figure out, and the market is overrun with lenders who have high rates and fees. But these four companies, in my experience, are the best student loan companies to work with. But like absolutely everything, make sure you read the fine print before applying.

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About the

Total Articles: 160
Kevin Mercadante is a freelance personal finance blogger and the owner of his own personal finance blog, OutOfYourRut.com. A recent transplant to New England, he has backgrounds in both accounting and the mortgage industry.

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