Compare Private Student Loans - May 2026

What is a private student loan?

A private student loan is an education loan issued by a bank, credit union, or online lender — not the federal government — and is one of the main private student loan options you can compare based on interest rates, APRs, and repayment terms when federal aid isn’t enough. These private student loans can help you pay for tuition, housing, textbooks, and other school-related costs when federal aid isn't enough.

If you apply for a private student loan, your eligibility and typical student loan interest rate will depend on the lender as well as your credit score, income, debt-to-income ratio, and other factors. You do have the option to apply with a student loan cosigner, which could make it easier to get approved and qualify for a low interest rate.

Private student loans vs. federal loans: What’s the difference?

Federal loans are government-backed and offer standardized federal student loan rates and flexible repayment options. Private education loans offer more choice and may come with lower private student loan rates for creditworthy borrowers, but they typically provide fewer borrower protections. When deciding between the two, it’s important to compare private student loan rates against current federal student loan rates and evaluate repayment flexibility.

What to know about the grad PLUS loan elimination in 2026

Federal borrowing options for graduate students are set to change. Beginning July 1, 2026, new borrowers will no longer be able to take out grad PLUS loans under updated federal student loan rules.

Under the new structure, graduate students will be limited to Direct Unsubsidized Loans, which are capped at $20,500 per year, with a $138,500 lifetime limit (including undergraduate borrowing). Unlike grad PLUS loans, which previously allowed students to borrow up to their school’s full cost of attendance, these fixed limits may leave some borrowers short of covering tuition, fees, and living expenses.

As a result, students pursuing advanced degrees may need to plan for additional funding sources beyond federal loans. Options could include scholarships, fellowships, assistantships, employer tuition assistance, personal savings, or private student loans to help bridge any remaining gap.

Who qualifies for federal and private student loans?

Eligibility for private student loans depends on several factors, including your credit score, income, and enrollment status. Most lenders require a minimum credit score (often around 670) and may also assess your income, debt-to-income ratio, and the school or program you're attending. If you have little or no credit history, applying with a cosigner can improve your chances of approval and help you secure lower school loan interest rates.

To qualify for federal student loans, basic eligibility requirements include U.S. citizenship, a valid Social Security number, enrolling at least half-time in an eligible degree or certificate program, and maintaining satisfactory academic progress. Federal loans don't require a credit check, except for PLUS loans. Financial need is considered for subsidized federal student loans, while unsubsidized loans are available to most students regardless of income.

How much can you borrow with a private student loan?

Private student loan limits vary among lenders. They usually do not exceed your school's total cost of attendance, minus any other financial aid you receive.

Federal student loan borrowing limits vary based on how far along you are in your education and whether your parents support you financially. For many students, the maximum federal student loan amounts aren't enough to cover all their education costs.

Compare the best private student loan lenders

Review the lenders below to compare student loan rates, repayment options, and loan terms. This can help you determine the best lender for your needs.

How student loan interest works

Student loan interest is the cost of borrowing money and is typically calculated as a percentage of your outstanding loan balance, expressed as an annual percentage rate (APR).

For most federal and private student loans, interest accrues daily based on simple interest — meaning it's calculated on the original loan amount, not on previously accrued interest. Each monthly payment first covers any accrued interest, with the remainder going toward the principal. Over time, as you pay down your loan, the daily interest charges decrease. However, if you miss payments, the unpaid interest may be capitalized, or added to your principal, increasing the total loan balance and future interest charges.

Federal loans have fixed interest rates set by the government, which makes them predictable over time. Private loans may have either fixed interest rates or variable interest rates that can change based on market conditions and potentially increase your costs. Most student loans charge simple interest. In rare cases, private loans may use compound interest, which can further increase what you owe. Because interest can significantly raise your repayment costs, it's important to understand how it's calculated and explore ways to reduce it.

To minimize interest charges, consider making interest-only payments while in school, paying extra toward the principal when possible, refinancing for a lower education loan interest rate, or choosing a shorter repayment term. These strategies can help reduce the overall cost of your loan. On the flip side, ignoring interest payments — especially during school or deferment — can lead to capitalization and inflate your debt. Continued nonpayment after your loan enters repayment can lead to delinquency, default, and serious financial consequences like damaged credit and wage garnishment.

Editor insight: “To qualify for the best student loan rate, I suggest choosing one that you can pay off as quickly as you can comfortably manage. Lenders typically offer lower private student loan interest rates on shorter loan terms because there's less risk of default. You'll also repay your loan faster and reduce the total interest cost.”

— Renee Fleck, Student Loans Editor, Credible

Interest rate trends: Federal and private student loans

Monitoring the average interest rate on student loans allows you to better evaluate your offers and capitalize on market dips to secure more affordable funding. Because even a fractional difference in your rate can save you thousands of dollars over the life of the loan, it is vital to understand how these figures fluctuate. While federal rates remain fixed for all borrowers, private lenders use these market averages as a baseline before adjusting their final offers based on your individual credit profile.

For the 2025-26 school year, current student loan interest rates for federal undergraduate Direct Loans are fixed at 6.39%, 7.94% for graduate Direct Unsubsidized Loans, and 8.94% for PLUS Loans. Private student loan rates on the Credible platform range from 2.59% to 17.99% APR for fixed-rate loans, and from 3.65% to 17.99% APR for variable-rate loans.

Choosing between fixed and variable rates, or adjusting your repayment term, can help align borrowing costs with your long-term goals. If you're looking to minimize your total repayment amount, a lower rate can make a substantial difference — even by just 1%.

If you're considering private loans, take time to understand how interest is calculated and how your rate might change over time. Keeping track of average student loan rate trends, like those published by Credible, can help you understand the market and compare loan offers with confidence.

Private student loans can be a valuable tool for covering college costs, especially after you've maxed out scholarships, grants, and federal aid. They offer quick access to funds and may come with competitive interest rates if you or your cosigner has strong credit. However, unlike federal loans, private student loans typically lack flexible repayment options, income-based plans, and forgiveness opportunities, making it crucial to understand the pros and cons before borrowing.

Before taking out a private loan, use a student loan calculator to estimate your potential monthly payments and compare them to expected earnings after graduation. Borrow only what you need, and consider making interest-only payments while in school to help manage long-term costs.

When to apply for a private student loan

The timing of your student loan applications is crucial, especially when balancing both federal and private options. Federal student loans should be your starting point, and the application process begins with completing the Free Application for Federal Student, or FAFSA. Submitting the FAFSA early improves your chances of receiving grants and other aid awarded on a first-come, first-served basis. While the FAFSA has set federal deadlines, many states and schools have their own earlier cutoff dates. Check with your state and school financial aid office to stay on track.

Private loans offer more flexibility with timing. You can apply for private student loans anytime, including during the semester. However, you should always do so as early as possible to avoid delays in processing and disbursement. Private lenders often require school certification before releasing funds. This can take several weeks. While many private lenders provide fast approval, unexpected documentation requests or school-related delays can slow the timeline, so it's best to apply well in advance of your tuition due date.

There are many student loan options available, from federal loans to private lenders. Each has different rates, repayment terms, and borrower benefits. Using Credible, you can easily compare these options side by side to find the best fit for your needs.

Methodology

Credible’s rating criteria incorporates 700 data points spanning interest rates, fees, loan terms, repayment options, customer service, eligibility, efficiency, options for poor credit and no credit, cosigner options, discounts, and more.

Learn more about our methodology.