If you’ve managed to navigate the FAFSA and secure every scholarship possible, but still find yourself short on tuition funds, you may be considering a private student loan. Your first instinct is probably to reach out to Sallie Mae or Wells Fargo, but they are not the only lenders out there. In fact, smaller lenders tend to offer much better rates, and shopping between them can mean a lot of savings for you. That’s especially true since interest rates can sometimes vary by more than 5% between lenders
Here’s an example of what different interest rates can look like:
Let’s say you want to borrow $10,000 to pay back in 10 years (120 months).
Loan #1: Interest Rate = 10.25%, after 120 months you will have spent $6,024.68 additional in interest, making the grand total of your loan $16,024.68.
Loan #2: Interest Rate = 5.25%, after 120 months you will have spent $2,875.00 additional in interest, making the grand total of your loan $12,875.00.
The 5% difference between loans 1 and 2 amounts to $3,149.68. That’s either an extra $3,000 that you saved, or an extra $3,000 that you owe. That 5% probably didn’t mean much to you before you saw the math, but that’s a pretty big difference.
Now you can see how important it is to do your research!
If you’re stumped on where to look for inexpensive loans, start with your local banks and credit unions.
Most likely, there are smaller banks in your hometown that have private student loan options that you didn’t even know about. That’s usually where you’ll find the best rates. These guys may not have the advertising budgets of the bigger banks, so you’ll have to find them.
Here’s a list of our suggested private student loan lenders:
| Lender | Co-Signer Release | Repayment Options | Term | Interest Rates |
|---|---|---|---|---|
 | Yes | - Flat Payment (In-School) - Full (principal & interest) - Deferred - Interest-only | 5, 8, 10, 15 years | 3.47% - 17.99% (Fixed) 4.99% - 17.99% (Variable) Check Rate |
 | Yes | - Deferred - $25 Minimum Amount - In-School Interest Only | 5, 7, 10, 12, 15 years | 3.69% - 14.41% (Fixed) 5.50% - 14.56% (Variable) Check Rate |
| Yes | In school payment options - Pay now or later: Make interest payments - Pay a fixed $25 payment - Defer payments until after school -Undergraduate loan rates displayed. Lower interest rates shown include the auto debit discount. | 10-15 years | 3.49% - 15.49% APR (Fixed) 4.92% - 15.08% APR (Variable) Check Rate |
 | Yes | - Immediate repayment - Interest-only - Fixed monthly payments in school - Fully deferred | 5, 7, 10, 15 years | 3.54% – 15.99% (Fixed) 5.54% – 15.99% (Variable) Check Rate |
 | Yes | - Full payments (Principal and Interest) | 5, 10, 15 years | As low as 3.99% (Fixed) As low as 5.34% (Variable) Check Rate |
 | - Deferred - $25 Minimum Amount - In-School Interest Only | 5, 7, 10, 12, 15 years | 8.77% - 14.26% (Fixed) 8.57% - 13.91% (Variable) Check Rate |
After you’ve shopped around for a few private student loan rates, we recommend you sign up for Juno to check that you’re getting the lowest rate possible. Juno is a platform that negotiates better student loan rates for groups of student loan borrowers.
If you find you need a private loan to close the gap when paying for school, do yourself a favor and compare your loan options. Because, as you can see, comparison shopping will save you thousands over the life of a loan.
To help parents and students make informed decisions about student loan costs, we developed the Road2College Student Loan Comparison Spreadsheet to download for free.
