Best Undergraduate Student Loans of 2025

With the rising cost of college, many undergraduate students rely on student loans to pay for college. In 2024-25, the average budget at public four-year colleges — including tuition, fees, room and board, and other education-related expenses — is $29,910 for in-state students and $49,080 for out-of-state students, according to the College Board. The cost is even higher for students attending private four-year schools.

While student loans can help you afford college, choosing the right undergraduate loan can make a big difference. College Ave and Sallie Mae offer some of the best private undergraduate loans, thanks to their competitive interest rates and flexible repayment options. But selecting a lender isn't a one-size-fits-all decision.

In this guide, explore the best undergraduate loans for 2025, along with tips for borrowing wisely.

Current private student loan interest rates

Best private student loans for undergraduates

Why you can trust our Credible experts

The Credible editorial team is independent and unbiased. Partners do not influence our editorial content. To help you find the best student loan for your situation, we conduct thorough research and analyze thousands of lender data points. Using data-driven methodologies, we score criteria that are important to you. This allows us to objectively rank student loan lenders and products. To learn more, read our methodology below.

Methodology

To determine the best student loan lenders for undergraduates, 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.

Credit score needed for private undergraduate loans

Many undergraduate students don't have an established credit history, which means they'll likely need a cosigner to qualify for a private student loan. In fact, 84% of borrowers who applied for a private student loan in 2024 did so with a cosigner, according to Credible marketplace data.

To qualify, you or your cosigner will typically need a good credit score, which is a FICO score of 670 or higher. Here's a look at the average interest rates by credit score among borrowers who secured a loan through the Credible marketplace:

What are the best student loan options for undergraduates?

In most cases, federal undergraduate loan options offer the most value.

“Federal loans should always take precedence because they provide so much more flexibility and protection,” says Chris Heerlein, chief executive officer at REAP Financial, a financial planning firm based in Texas.

Federal benefits include flexible repayment plans, lower interest rates, and access to loan forgiveness through Public Service Loan Forgiveness (PSLF) and income-driven repayment plans.

“Private loans provide no such safety net, typically carry higher interest rates, and can be less forgiving if a borrower struggles after graduation,” adds Heerlein. “Federal loans offer students a more forgiving start and a clearer road to repayment as the course of their lives shifts.”

However, federal loans have annual borrowing limits that don't usually cover the full cost of attendance at a four-year school. If you've hit the federal limit, private student loans can help fill the gap.

Best federal undergraduate student loans

Undergraduate students have three different federal student loan options, and you may be eligible for more than one type of loan:

• Direct Subsidized Loans: Undergraduates with demonstrated financial need qualify for Direct Subsidized Loans. The Department of Education covers the interest on these loans until six months after you graduate, leave school, or drop below half-time enrollment.
• Direct Unsubsidized Loans: All undergraduates can take on Direct Unsubsidized Loans. Payments aren't required until six months after leaving school, but you're responsible for paying all the interest that the loan accumulates during school.
• Parent PLUS loans: Parents of undergraduate students can take out a parent PLUS loan to help pay for their child's education.

How to compare undergraduate student loans

When comparing the best student loans for college, keep the following in mind:

• Interest rates: Depending on the lender, you might be able to choose between a fixed or variable interest rate. A fixed rate is usually the safer bet, especially if you'll be repaying the loan over time. But a variable rate could make sense if you plan to pay off the loan quickly. Either way, compare undergraduate loan rates across lenders before committing.
• Cosigner requirements: Many private lenders require undergraduate students without a credit history to apply with a cosigner. If you want to release your cosigner from the loan later, look for lenders that offer a clear cosigner release policy.
• Repayment terms: Lenders vary in their repayment options. Most let you either make payments while in school or defer until six months after graduation. Once repayment begins, terms typically range from 5 to 15 years — though some lenders offer up to 20 years. Think about what fits best with your budget and financial goals.
• Borrower protections: Unlike federal loans, private student loans come with fewer borrower protections. For example, private lenders don't offer loan forgiveness options. If you're worried about running into financial struggles, you may want to look for a lender that offers generous forbearance options, which allow you to pause payments temporarily (though interest will still accrue).

Borrowing tips for undergraduate students

As you navigate paying for your education, start by maximizing free financial aid options before leaning on loans. Scholarships and grants can help minimize the amount you need to borrow.

“Students should be in touch with their financial aid offices to confirm all financing options and scholarship opportunities for additional grants or 'free money' to help reduce loan burden,” says Hillary Saylor Schulz, director of student financial services counseling at Alvernia University.

“Often, the local communities with which the students reside have community foundations that may assist students,” she adds.

Make it a point to only borrow what you need to cover your costs. This might mean living on a lean budget while in school to avoid overborrowing. You can also explore creative ways to cover your expenses, such as employer tuition assistance programs, part-time work, or attending a more affordable school.

Lastly, consider researching your expected earnings after graduation before taking out a loan. The Bureau of Labor Statistics' Occupational Outlook Handbook is a helpful resource to estimate your future salary and determine whether your degree is worth the investment.