The Bottom Line

Earnest is our top pick for all-around best lender due to its unparalleled range of loan options and its low rates. However, if finding the absolute lowest rates is the most important thing for you and you’re not too picky about your lender, Juno is a good option.  For students without a co-signer, Funding U and Ascent offer unique student loans based on your own academic qualifications and career trajectory, sans credit, although they are expensive. If you need to refinance, a company like Splash Financial could serve you well. Finally, don’t rule out lender marketplaces like Credible, which can help you compare many lenders at once.

Compare the Best Student Loans

	Minimum Credit Score	Minimum Annual Income	State Availability	Distinguishing Feature
Earnest Best Overall	650	$35,000	All U.S. states, except Nevada, and Washington, D.C.	Highly customizable private student loans.
Juno Best for Negotiating Low Rates	Varies by lender; 650 for co-signers.	Varies by lender; $35,000 for co-signers.	All U.S. states except Nevada; some lenders not available in all states.	First-of-its-kind student loan negotiation company that works with multiple private lenders.
Credible Best Student Loan Marketplace	Varies by lender.	Varies by lender.	Varies by lender; not available in all states.	Student loan marketplace with a transparent partner network.
SoFi Best Parent Student Loan	650 (or higher) recommended.	Minimum not specified; must "be employed or have sufficient income from other sources (either borrower or cosigner)."	All U.S. states and Washington, D.C.	If a loan is taken out by a parent for their child, the loan can later be refinanced in the child's name.
ISL Lending Best for Graduate School	660	Minimum not specified; borrowers must have "Continuous employment over the last two years."	All U.S. states, except Maine, and Washington, D.C.; Illinois Partnership Loan only available in Illinois.	Exceptionally good interest rates for Iowa or Illinois students.
Ascent Best for International/DACA Students	Minimum not specified.	$24,000 for co-signers and borrowers with at least two years of credit history and no co-signer.	All U.S. states and Washington, D.C.	Borrowers receive 1% of their loan balance back in cash upon graduation.
ELFI Best Average Interest Rate	680	$35,000	All U.S. states and Puerto Rico	Assigns each borrower a dedicated customer support representative.
Splash Financial Best for Student Loan Refinance	640	Varies by lender.	All U.S. states; Washington, D.C.; Puerto Rico; and the U.S. Virgin Islands	Refinancing medical or dental school loans while in residency gives borrowers the option of making fixed monthly payments of $100.
Funding U Best for Students Without a Co-Signer	Minimum not specified.	Minimum not specified.	Ala., Ariz., Ark., Calif., Colo., Conn., Del., Fla., Ga., Hawaii, Ill., Ind., Iowa, Kan., La., Md., Mass., Mich., Minn., Mo., Neb., N.J., N.M., N.Y., N.C., Ohio, Okla., Ore., Pa., S.C., Tenn., Texas, Utah, Vt., Va., Wash., W.Va., and Wis.	Loan qualification is based on borrower's career plans and academic performance.

Guide to Choosing the Best Student Loans

Student loans are money borrowed from the government or a private lender to pay for college. The loan has to be paid back after graduation, along with the interest that has been accrued. The loan can usually be used to cover tuition, room and board, books, and other school-related expenses. Student loans are different from scholarships and grants, which don’t have to be paid back. You can apply for a student loan online and fill out your (and your parents', if applicable) financial information. Student loan qualifications are different depending on the type of loan you receive but can include FICO score and income. Typically, you will need multiple student loans to cover your entire tuition and all related expenses. A financial aid counselor from your high school or your future college should be able to help you better navigate the process.

Private vs. Federal Student Loans

There are effectively two types of student loans. The U.S. Department of Education is responsible for administering federal student loans, which have several benefits over their private counterparts. Interest rates on federal loans are fixed (compared to variable rate loans), in addition to typically being lower than interest rates on both private loans and credit cards.

Depending on the type of federal loan you're interested in, a credit check may not be required, the loan may be subsidized while you're in school, and payments may not be due until after graduation. Additionally, there are several repayment plans available for federal student loans. These include:

• Fixed payment repayment plans: These three plans base your monthly student debt payment on how much you owe, your interest rate, and a fixed repayment time period.
• Standard Repayment Plan: A fixed payment amount is set for this plan that ensures your debt will be paid off within 10 years, or up to 30 years for consolidated loans. After leaving school, you will automatically be enrolled in the Standard Repayment Plan unless you choose otherwise.
• Graduated Repayment Plan: Payments for this plan start lower and then increase over time (typically every two years). Like its Standard counterpart, the Graduated Repayment Plan's payment amounts are calculated to ensure your debt will be paid off within 10 years (up to 30 years for consolidated loans).
• Extended Repayment Plan: This plan's payments can either be fixed or start lower and then increase over time. In either case, these payments are designed to ensure your debt is paid off within 25 years.
  
• Income-driven repayment (IDR) plans: These four plans base your monthly student debt payment on a percentage of your discretionary income and your family size. Following a certain number of months of qualifying payments (which varies by plan), any remaining student loan debt is forgiven.
• Saving on a Valuable Education (SAVE) Plan: Originally known as the REPAYE Plan, payments on a SAVE Plan are equal to 10% of your discretionary income. The repayment period will be either 20 years (undergraduate loans only) or 25 years (any graduate/professional loans).
• Pay As You Earn (PAYE) Repayment Plan: Payments on the PAYE Plan are equal to 10% of your discretionary income, up to the amount you would have paid under the Standard Repayment Plan. This plan is only available to new borrowers, and it has a repayment period is 20 years.
• Income-Based Repayment (IBR) Plan: Depending on when you borrowed, an IBR plan will be set at either 10% (first borrowed after July 1, 2014) or 15% (borrowed before July 1, 2014) of your discretionary income, with repayment periods of 20 or 25 years, respectively. Like the PAYE Plan, your monthly loan payment is capped at what you would have paid under the Standard Repayment Plan.
• Income-Contingent Repayment (ICR) Plan: Payments on an ICR Plan are equal to 20% of your discretionary income or what you would pay on a fixed repayment plan over 12 years (adjusted according to your income), whichever is lower. An ICR plan has a repayment period of 25 years.
  

Private student loans, meanwhile, aren't solely restricted to one source. You can get a private student loan from a bank, credit union, or other financial institution. Private lenders typically won't consider a borrower's financial needs when determining who to lend to. As such, a loan applicant will likely need to pass a credit check, which can be difficult for students with hardly any credit history.

Private student loans lack many of the other benefits afforded to their federal government counterparts. Interest rates on private student loans are usually higher and can be either fixed or variable, and they typically aren't subsidized.

Some benefits unique to private loans are that they typically have higher borrowing limits and are usually quicker to fund than federal loans. However, these may not be necessary for some borrowers. It's generally best to exhaust all of your federal aid options before turning to private student loans, and you shouldn't take more than what you need to cover the cost of attendance, since more loan funds means more debt to repay later.

How to Get a Student Loan

Getting a student loan is a relatively straightforward process. There are two types of student loans: federal and private. Rather than choosing between the two, it may be best to start with federal loans first and then fill in any remaining gaps with private loans.

1. Fill out and turn in the FAFSA: If you want federal student loans, the FAFSA must be filled out first, and you can do so on the . You'll need to provide information regarding your and/or your parents' Social Security number (SSN); tax returns; total cash, savings, and checking account balances; investments; etc., so having any relevant files on hand before you start may be a good idea. You'll also need to list at least one college on the FAFSA, so you should already have an idea of what schools you want to apply to.
2. Review and accept your loan offer: For each university that sends you an admission offer letter, you should eventually receive a financial aid package that includes any federal loans you're eligible for. You may have to contact a school's financial aid office to determine how to apply for its aid beforehand, depending on the college.
3. Apply for private loans (if necessary): If your chosen college's financial aid package is insufficient to cover your college costs, then you should consider taking out a private student loan from a bank, credit union, etc. The exact process of getting a private loan will vary by institution, but you can typically apply on a lender's website and will have to provide much of the same information as you would for a federal loan, in addition to your or your parents' credit score.

Student Loan Pros & Cons

Pros

• Makes higher education affordable: College can be incredibly expensive. Between tuition, fees, books, housing, and more, many people won't be able to afford to pay for a higher education out of pocket. Student loans can cover some or all of the costs of college, and because they tend to have lower interest rates than other types of loans, they're often one of the most cost-effective options available to young borrowers.
• Increased earning potential: While student loan repayments can cost you a lot in the long run, this may be outweighed by how much you could earn thanks to having a college degree. Many high-paying jobs are impossible to qualify for without at least a bachelor's degree. There are certainly still jobs available to workers who are unable or choose not to attend college, but student loans can unlock additional (and potentially more lucrative) career paths.
• Little to no credit history required: Unlike several other borrower options, most types of federal student loans (as well as some kinds of private student loans) don't require a credit check. Given that most students are unlikely to have much of a credit history, making on-time payments on student debt is an excellent way for young adults to build credit.

Cons

• Loan amount may be insufficient: Most types of federal student loans (and some private loans) have set limits for how much can be borrowed. Depending on a university's cost of attendance, this may leave funding gaps that will force prospective students to take out additional loans or seek other sources of funding.
• Repayment delays financial goals: While taking out student debt can increase your earning potential, this does come at the cost of delaying your more immediate financial goals. In the best-case scenario, making monthly loan payments can restrict some borrowers' ability to save for retirement, a house, or a wedding. Conversely, student loan repayment may make it impossible for other borrowers to afford basic expenses, such as rent or child care.
• Can't be discharged in bankruptcy: As with other types of debt, defaulting on your student debt can have a serious detrimental impact on your credit score. However, unlike most kinds of debt, student loans are typically very tricky to discharge in bankruptcy. In addition to a standard bankruptcy procedure, borrowers wishing to have their student debt discharged will have to file an adversary proceeding and then prove to a bankruptcy court that repaying their student loans would cause undue hardship.

What Are Some Alternatives to Student Loans?

If you decide that a student loan isn’t for you or want to know what other options you have, there are some alternatives:

• Parents pay for college
• Merit-based scholarship
• Athletic scholarship
• Work-study aid
• Savings or an inheritance
• Grants
• Military service

Why You Should Trust Us

Investopedia collected and analyzed thousands of key data points from over 30 companies to identify the most important factors for readers choosing a student loan company. We used this data to review each company for interest rates, fees, and repayment terms, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999, and has been helping readers find the best student loan companies since 2019.

How We Pick the Best Student Loans

Investopedia has been dedicated to providing consumers with unbiased, comprehensive reviews of student loan lenders for over four years. We've collected thousands of data points across 30 lenders—spending hundreds of hours researching and verifying loan types, interest rates, fees, loan amounts, and repayment terms—to ensure that we help readers make the right borrowing decision for their education needs.