With the high cost of education, some parents and students find it necessary to apply for loans to fund a college education. Federal student loans and private student loans are two options available.

Private student loans can help cover expenses not covered by other financial aid. Some students use private loans to pay for summer courses when their school does not apply Federal aid to summer programs. Additionally, students use private loans to pay for extra living expenses while in college.

Private student loans can be a bit more difficult to get than federal student loans because they require a credit check and usually a cosigner.

How To Compare Private Student LoansBanks use your credit score to determine your ability to handle money. Borrowers with an established credit history and a higher credit score will get higher loans at better rates than those with a lower credit score.

Most undergraduates will need a cosigner because they do not yet have an established credit history. However, many loans do offer the option to release your cosigner at a certain point during repayment.

When comparing student loans, there are a few things to keep in mind.

  • Interest rates– Does the bank offer a fixed or variable interest rate? How does the interest rate compare to other lenders?
    • A fixed interest rate will remain the same over the life of the loan.
    • A variable interest rate changes to reflect current market conditions. Depending on the rate, your payments could decrease or increase throughout the period of the loan. Variable interest rates are risky because they could shoot up at any time. Ask if there is a limit on how high the interest rate can go.
  • Application or origination fees– Some banks require one or both while other banks have no extra fees.
    • An application fee is usually a set amount for a loan.
    • An origination fee typically varies from 0.5% to 2% of the loan amount.
  • Repayment options
    • Some lenders do not require payments while you are still in school.
    • Deferments or forbearance – During economic hardships, does the lender allow you to defer or lower payments temporarily?
    • Cosigner release – Many banks will give the option of signing a cosigner release during repayment. Minimum requirements are typically at least 12 months of consecutive on-time payments.
    • Length of repayment – How long will you be repaying the loan? Are there any penalties for paying the loan off early?

To get started, check out student loan options with these popular banks and more online.

Wells Fargo

Variable or fixed interest rates

No payments while in school

Sallie Mae

No origination fees early pay off penalties

Low interest rates


Choice of fixed or variable interest rates

Six-month grace period after graduation before repayment begins

Citi Bank

No payments while in school

No origination fees


No payments while in school

6-month grace period after graduation before repayment begins

Citizens Bank

Flexible repayment options

Cosigner release after 36 consecutive on-time payments

Charter One

Zero fees

Offers variable or fixed interest rate options