Compare the Best Private Student Loans for July 2025 in Minutes

A private student loan is an education loan issued by a bank, credit union, or online lender — not the federal government. These 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 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.

Federal loans are government-backed and offer standardized rates and flexible repayment options. Private education loans offer more choice and may come with lower interest rates for creditworthy borrowers, but they typically provide fewer borrower protections. Be sure you've made use of all the federal student aid you can qualify for before exploring private loans for college.

1. Get prequalified rates

With Credible, you can compare rates from multiple private lenders at once, without hurting your credit. Simply enter your personal information, then receive an overview of your estimated rates and terms from different lenders you qualify with.

2. Compare private student loan lenders

Research each lender to compare key features and choose the right loan for you. Consider interest rates, repayment options, fees, member benefits, and customer reviews.

3. Select your loan

After narrowing down your list of private lenders, choose the loan option that best suits your needs. Also consider whether you'll add a cosigner to the loan. If so, you'll need to gather some information from your cosigner to complete the next step.

4. Submit an application

Gather the necessary documentation to apply. This may include a government-issued ID, pay stubs, tax records, and more. Fill out the private loan application, provide the requested documentation, sign, and submit.

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.

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 secure a lower interest rate.

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.

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.

Interest rates are the biggest factor determining the cost of student loans. Even small differences can translate into thousands of dollars over the life of a loan. While federal student loan rates are the same for all borrowers, private student loan rates vary widely depending on the borrower's credit profile.

For the 2025-26 school year, federal student loan rates are fixed at 6.39% for undergraduate Direct Loans, 7.94% for graduate Direct Unsubsidized Loans, and 8.94% for PLUS Loans. Private student loan lenders on the Credible platform offer fixed-rate loans with APRs ranging from 3.04% to 17.99%, and variable-rate loans with APRs from 4.13% to 17.99%.

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.

Here's a quick comparison of the advantages and drawbacks of private student loans:

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.

To determine the best student loan lenders, Credible collected more than 1,000 points of data on two dozen companies and evaluated them on several different categories: repayment options, eligibility, interest rates, loan terms, and customer support. We assigned a score out of five stars to each lender based on our findings. Below are the weightings assigned to the general categories for the best student loan companies — which comprise individual criteria that are also weighted.

• Repayment options: 30%
• Eligibility: 25%
• Interest rates: 20%
• Loan terms: 15%
• Customer support: 10%

While the best lender for you will depend on your unique needs and financial circumstances, these findings should help answer your questions and assist you in your search for the best student loan.

Learn more about our methodology.