Key takeaways
- The best banks for student loans are ones that offer attractive terms, discounts and local availability.
- If you have trouble qualifying on your own, many banks allow cosigners.
- Access these loans by applying directly through the bank.
While some private lenders offer less than favorable terms, many national banks offer student loans with low interest rates and customizable terms. That may make them a good place to start when looking for private loans for education.
Best banks for student loans
It’s always a good idea to shop around and compare loan offers from multiple lenders before you submit an application. This list below can help you narrow your options.
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Citizens Bank offers private student loans nationwide for undergraduate and graduate students, as well as for parents who are hoping to help their child get through school. Loan terms range from 5 to 15 years for students and 5 to 20 years for parents.
Unlike most lenders, Citizens Bank offers multiyear approval. You undergo a hard credit inquiry once for multiple years’ worth of student loan needs. When you request future disbursements, you’ll undergo a soft credit check, saving the hassle of applying every year.
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Education Loan Finance, or ELFI, is the online student loan division of Tennessee-based SouthEast Bank. The lender offers loans to undergraduate students, graduate students and parents. Repayment terms range from 5 to 15 years for students and 5 to 15 years for parents. But borrowers need to have at least a 680 credit score, which could be inaccessible for borrowers without a cosigner.
What sets ELFI apart from other lenders is that you’ll get assigned a student loan advisor who will help you throughout the process. However, ELFI doesn’t offer an autopay discount like other banks, saying that it doesn’t require you to do anything extra to get its best rates.
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PNC Bank, based in Pennsylvania, offers private student loans to undergraduate and graduate students. It also offers specialized loans for health and medical professions, health professions residency and bar study. Repayment terms range from 5 to 15 years.
Uniquely, PNC offers a $10,000 scholarship twice a year, and you don’t even need to have a PNC student loan to qualify. Once you enter and meet the eligibility requirements, you’ll be eligible for two drawings over the following 12 months.
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Sallie Mae is an online bank that doesn’t have any brick-and-mortar branches. The bank offers undergraduate loans, graduate loans and career training loans. Loan amounts start at $1,000 and Sallie Mae pays up to 100 percent of school-certified costs.
Do banks offer student loans without a cosigner?
It can be challenging for college students to get approved for a private student loan without a cosigner, especially if you have little to no income and credit history.
Even the best banks for student loans are no different than other lenders in this regard. If you plan to apply for a private student loan, consider asking a parent to cosign the loan application to improve your odds of getting approved and qualifying for a reasonable interest rate.
With that said, if you do have some credit history to your name, you can likely find a bank that will accept your loan application without a cosigner. This is particularly true for graduate school loans.
How to apply for a student loan with a bank
The application process for private student loans with a bank doesn’t differ much from that of other lenders. Here’s what to expect:
- Shop around: Even if your bank offers a loyalty discount, compare rate quotes from multiple banks, credit unions and online lenders to determine which one can give you the best deal. In addition to rates, you may also want to compare repayment plans, cosigner release options, forbearance and deferment plans and other important features.
- Apply directly with the lender: Once you’ve decided which bank to apply with, you can typically apply directly through the bank’s website. Some may also allow you to apply by phone or in person, but an online application is the quickest option. You’ll typically need to provide information about yourself, your school, how much you want to borrow and other relevant details.
- Provide documentation: The bank may ask for documentation for your income, a government-issued ID and other relevant information about your application. The faster you share your documents, the more quickly the underwriting process will go.
- Agree to the final offer: Once the lender has done a complete review of your credit history and other aspects of your application, you’ll receive a final offer, which may or may not be the same offer you received when you first requested a quote. If you agree to the terms, read the loan agreement and other documents the lender provides and sign them electronically.
- Wait for disbursement: Private student loans are typically disbursed first to your school to cover tuition, fees and other relevant expenses. If there’s money left over, you should receive it directly. At that point, you can use our loan funds to cover other eligible educational expenses.
Also, make sure you know when payments start. If you’re a student, you can typically wait until after you leave school to begin your payments. But if you’re a parent taking out loans to help your child through school, payments may begin immediately. Contact your lender if you have any questions.
Bottom line
If you need private loans to help cover the cost of college, consider shopping around national banks and other large lenders to see what private student loan rates they offer. Many offer reasonable repayment terms and can cover small or large portions of your education costs. Find the lender that works best for your needs.
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