Parent Loans vs Private Student Loans

In this head to head matchup, we compare Parent Loans offered through the federal government and private student loans offered through a private student loan company.

Parent PLUS LoanPrivate Student Loan
BorrowerParent of a dependent undergraduate studentStudent

(Private lenders also offer Parent Loans, which are a lower cost alternative to Parent PLUS Loans and are available for both undergraduate and graduate programs)

Co-Signer RequiredIf parent has adverse credit historyDependent on student’s credit history, ability to repay the student loan and financial responsibility
Credit UnderwritingNo adverse credit history; otherwise all borrowers receive the same fixed rateFavorable credit can mean a lower student loan interest rate; everyone gets their own individual student loan interest rate
LenderU.S. Federal Government (Department of Education)Private student loan company
Interest Rate OfferedFixedFixed or Variable
AutoPay DeductionYesYes
Origination / Loan Fees4.272% (2016-2016)Varies by lender (typically lower than Parent PLUS Loan)
Grace Period / Deferment OptionsYesYes, varies by lender
Forbearance options3-year limitVaries by lender
Repayment Term10 – 30 years5 – 25 years

New Student Loans and Parent Loans

Do you need an undergraduate student loan, graduate school student loan or Parent Loan?
If you are a current or incoming undergraduate or graduate student (or the parent of one), there are other options in addition to federal student loans to help you pay for school. Based on your credit profile and financial background (and, if applicable, that of a qualified co-signer), you could save significant money compared with a traditional, big bank.

Students Loans are available for both graduate students (business, medicine, dental, law, pharmacy, and other graduate programs) as well as undergraduate students.

Parent Loans are a good option for parents with strong credit who want to borrow the cost of their child’s graduate or undergraduate education.

We have identified our top new student loans and Parent Loans in 2018. You can learn more about student loans, parent loans, student loan interest rates, loan terms and more


Best Private Student Loans For 2018

Lender
Rates (APR)
Loan Type
4.53% - 9.69%
Graduate, Undergraduate

Overview

Variable Rates:4.53% - 9.61%
Fixed Rates:5.36% - 9.69%
Minimum Loan Amount:$5,000
Loan Terms:10
Origination Fees:No
Prepayment Fees:No
Co-signer Option:Yes

Details

  • Low rates from community lenders like credit unions and community banks
  • Get lower rates with a co-signer
  • Ability to pause payments for up to 18 months if you become unemployed
  • May consider your academic credentials to help you get a lower rate
  • If you repay 10% of your loan before your loan enters full repayment period, 1.0% APR is dropped from your current interest rate
3.89% - 12.00%
Cosigned Graduate, Undergraduate

Overview

Variable Rates:3.89% - 10.39%
Fixed Rates:5.70% - 12.00%
Minimum Loan Amount:$2,000
Loan Terms:5, 10, 15 years
Origination Fees:No
Prepayment Fees:No
Co-signer Option:Yes

Details

  • Ability to start repaying loan while in school
  • Co-signer release after 24 consecutive payments
  • Financial hardship forbearance option
  • Non-U.S. citizens are eligible if they have a creditworthy co-signer who is a U.S. citizen or permanent resident
  • 1% Cash Back Reward to students on their loan principle amount upon graduation
5.35% - 13.74%
Non-cosigned Graduate, Undergraduate

Overview

Variable Rates:5.35% - 12.69%
Fixed Rates:7.01% - 13.74%
Minimum Loan Amount:$2,000
Loan Terms:5, 10, 15 years
Origination Fees:No
Prepayment Fees:No
Co-signer Option:Yes

Details

  • Borrowers can qualify without a cosigner
  • A borrower’s major, graduation date and future earnings potential are considered
  • Borrowers who choose a fixed-rate option only can select a 10 year term
  • No minimum credit score or minimum income is required
  • Must have Satisfactory Academic Performance of 2.5 GPA, have Junior status or higher, and must be enrolled full-time
  • 1% Cash Back Reward to students on their loan principle amount upon graduation
3.54% - 12.07%
Graduate, Undergraduate

Overview

Variable Rates:3.54% - 10.81%
Fixed Rates:5.31% - 12.07%
Minimum Loan Amount:$2,000
Loan Terms:8, 10, 12, 15 years
Origination Fees:No
Prepayment Fees:No
Co-signer Option:No

Details

  • Student loans available to graduate, bachelors and associates degrees
  • Deferment and forbearance options may be available
  • Grace period for undergraduates: 6 months
  • Grace period for graduate students: 9 months
  • Flexible student loan repayment options

Overview

Variable Rates:5.38% - 5.62%
Fixed Rates:6.24% - 6.66%
Minimum Loan Amount:$5,000
Loan Terms:10, 15, 20 years
Origination Fees:No
Prepayment Fees:No
Co-signer Option:Yes

Details

  • Available at a select number of top business schools
  • Opportunity for 0.25% rate discount on fixed rate student loans upon proof of employment
  • Forbearance up to 1 year available
3.62% - 12.98%
Undergraduate, Graduate

Overview

Variable Rates:3.62% - 12.98%
Fixed Rates:5.74% - 12.87%
Minimum Loan Amount:None
Loan Terms:None
Origination Fees:No
Prepayment Fees:No
Co-signer Option:Yes

Details

  • Multiple repayment options
  • You may be able to increase your chance of approval if you apply with a credit worthy co-signer
  • Borrow up to 100% of the school-certified cost of attendance
  • Choose up to 120 tutoring minutes with Sallie Mae’s partner Chegg
  • Deferment and forbearance options available

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