Best Student Loan Rates In September 2020

The private loans are used to cater for the costs of higher education; however, they originate from entities like online lenders, credit unions, and different banks instead of the Federal government. Best student loan rates are issued with a certain monthly repayment plan having a variable or fixed interest rate. Also, repayment can be delayed until after graduation from school.

What Is Student Loan?

A student loan is a type of loan that assists students to settle their higher-education fees such as tuition, housing, and textbooks. Here, students have the option of choosing a variable or fixed interest rate with the Federal student loan plan allowing students to delay payment for a six-month grace period after leaving college.

Unlike financial aid, grants, or scholarships, private and federal student loans do not only offer financial assistance but there is a need for repayment with the necessary interest.

Best Student loan rates

Best Student loan rates

How Does Student Loan Operates?

The following factors should be considered before filing in an application for a student loan;

Rates – Variable or fixed rates

Limits – Might be up to the total cost of attendance in some cases

Repayment plans – Range from between 5 to 20 years

Fees – This may include origination fees, application fees, late repayment fees, and some other types of fees.

Private And Federal Student Loans

The private student loan is different from the Federal student loan because of its stems from private institutions like online lenders, credit unions, and banks rather than from the Federal government.

Merits Of Private Student Loans

  • The interest rate for a private student loan is based on credit score, so, a good credit score would mean a lower interest rate when compared to the Federal loan.
  • It comes with high loan limits and zero fees; these can fill the gap even if the maximum student loan has been borrowed from the Federal government.

Demerits Of Private Student Loans

  • It comes with some hard plans and different payment options, so, the loan terms and repayment plans are usually not customer-friendly.

Merits Of Federal Student Loans

  • There is no need for credit history to qualify for this type of loan because they don’t require any credit checks.
  • It comes with a flexible repayment plan such as a customized payment option according to student’s income and any loan forgiveness.
  • Federal loans are designed with extensive borrower protections which include hardship and deferment options.

Demerits Of Federal Student Loans

  • It has lower loan limits than private student loans with an origination fee that reduces the loan received. Besides, any default in the repayment will make the government garnish your tax and wages refund.

Current Student Loan Interest Rates

Type Of Loan Variable APR Fixed APR
Federal Student Loan Rates N/A 2.75% – 5.3%
Private Student Loan Rates 1.24% – 11.98% 3.95% – 12.99%
Refinance Student Loan Rates 1.99% – 8.99% 2.98% – 8.99%

 

However, 2.75% is the Federal student loan interest rate for undergraduates (direct subsidized loans and direct unsubsidized loans) while the Federal interest rates for professional and graduate students (direct unsubsidized loans) are set at 4.30% and 5.30% for direct PLUS loans.

The interest rate for a private student loan is much broader. The variable-rate loans may range from 1.5% to 12% APR while for fixed-rate loans, it’s set at 4% to 13%. The rate for a private student loan is based on the repayment period, amount of loan, and your credit score.

Types Of Private Student Loans

The following are examples of various types of student loans;

Graduate school loans: This is a good option for many types of advanced degrees, though this depends on the lender. So, if you desire a graduate school outside business, medicine, or law, this would assist you with the necessary finances.

International student loans: Since the Federal student loans are typically available to eligible students and the United States citizens; a private loan is the best option for international students attending higher institutions in the US.

Medical school Student loans: This would assist students to continue their rewarding and long education.

Law school student loans: It can assist students to cover for housing, textbooks, tuition fees, and some other fees.

MBA student loans Are you in the process of obtaining a master’s degree in business administration but concerned about payments, try getting an MBA loan.

Eligibility For A Private Student Loan

Even though federal student loans come with adequate borrower protections and flexible repayment plans, private student loans are a good alternative in some cases. Due to its low borrowing limits, private loans can fill in the gap if there is still more money after putting in for federal financial aids, scholarships, and other grants.

However, private loans have lower APRs when compared to Federal loan interest rates. So, having a variable-rate loan would increase your APR (monthly cost inclusive) over the duration of the loan.

Application For A Private Student Loan

Private student loans are a good alternative especially when you do not qualify for the Federal-aid or you have gotten to your Federal limit. You can apply for private student loans in banks, credit unions, and online lenders.

Here are the things to consider when applying for a private student loan;

Research with various lenders – This would enable you to compare rates, repayment options, and fees. Also, you might want to consider reviews from customers who have worked with lenders.

Read through the application qualifications – This should be done after narrowing down to few lenders before checking for income and credit requirements.  See if the lender offers prequalification to check for eligibility.

Go ahead with the application process – After narrowing down to few lenders, give details of social security number, income, and citizenship details. Upon submission, it could take some weeks to ascertain if your student loan has been approved.

The Best Student Loan Rates In 2020

In getting a private student loan, the first thing to look out for is the lender’s reputation, are there positive reviews? Ensure to compare offers from different lenders to determine the cheapest because different lenders offer different interest rates, terms of repayment, and fees.

So, consider the following student loan rates in September 2020

Ascent – Best student loan that requires no cosigner

Overview: This student loan is offered in all 50 states and to be eligible, you must be a full-time junior, senior, or graduate student with at least a 2.9 GPA

Ascent Details
APR Variable: 2.72% to 13% (with autopay), Fixed: 3.53% to 14.50% (with autopay)
Amount $1,000 to $200,000 depending on attendance cost and availability of a co-signer
Loan Terms 5 years o 20 years
Fees Not available

 

Citizens Bank – Best student loan approved for multi year

Overview: Available to undergraduate, graduate, and their parents. Students can be approved for multiple years of student loans. However, it is not available in all 50 states, and students running two-year career or college programs are not qualified.

Citizens Bank Details
APR Variable: 1.24% to 11% (with autopay), Fixed: 4.25% to 11.53% (with autopay)
Amount $1,000 to $350,000 depending on the program of study
Loan Terms 5 years o 15 years
Fees Not available

 

College Ave – Best student loan for rapid processing

Overview: Offer loan to undergraduate, graduate students, parents, and students running a career or college program, however, there is no defined forbearance program

College Ave Details
APR Variable: 2.72% to 13% (with autopay), Fixed: 3.53% to 14.50% (with autopay)
Amount $1,000 to $200,000 depending on attendance cost and availability of a co-signer
Loan Terms 5 years o 20 years
Fees Not available

 

CommonBond – Best loan for personalized mentoring

Overview: This is an online lender that offers loans to undergraduate and graduate students. Therefore, you would need a co-signer to apply.

CommonBond Details
APR Variable: 3.46% to 9.42% (with autopay), Fixed: 5.56% to 10.74% (with autopay)
Amount $2,000 up to the total cost of attendance and lifetime maximum of $500,000
Loan Terms Not stated
Fees $5 for returned check fee and $10 late fee

 

Earnest – Best student loan for a flexible term of repayment

Overview: It offers loans to undergraduate and graduate students with a unique repayment plan. It is not available in New Hampshire, Texas, and Nevada

Earnest Details
APR Variable: from 1.24% (with autopay), Fixed: from 3.95% (with autopay)
Amount $1,000 to the overall cost of attendance
Loan Terms Not stated
Fees Not available

 

Sallie Mae – Best student loan for a student on part-time

Overview: It gives loans to undergraduate, graduate, parents, and students running a career-training program. It does not require borrowers to attend school full or part-time, this makes it stand out.

Sallie Mae Details
APR Variable: 1.25% to 11.76% (with autopay), Fixed: 4.25% to 12.35% (with autopay)
Amount $1,000 to the overall cost of attendance
Loan Terms 5 years to 20 years
Fees $25 for late fees and returned check fee of up to $20

 

SoFi – Best student loan without fee

Overview: Here, you do not pay any fee and this reduces the total cost of borrowing. It does not give a co-signer release. SoFi offers a minimum loan size that is higher than that of most lenders.

CommonBond Details
APR Variable: 1.78% to 11.73% (with autopay), Fixed: 4.11% to 11.83% (with autopay)
Amount $5,000 up to the overall cost of attendance
Loan Terms 5 years to 15 years
Fees Not available

 

Wells Fargo – Best student loan trade and community college schools

Overview: This is a bank that gives loans to undergraduate, graduate, parents, and those running career-training programs. It gives hardship programs; however, not every of its private loan is qualified for forbearance.

CommonBond Details
APR Variable: 2.68% to 9.46% (with autopay), Fixed: 4.53% to 10.76% (with autopay)
Amount $1,000 up to the overall cost of attendance, and a maximum of $180,000 depending on the nature of course offered
Loan Terms Not stated
Fees None

 

 

 

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