You got your acceptance letter into your first-choice graduate school. You’re excited to finally realize this long-term dream — that is, until you look at the cost of attendance.
Let’s face it: graduate school can cost a pretty penny. One funding source is private graduate student loans. In this guide, we’ll cover student loans for graduate school and the best private graduate student loans to consider.
Student loans for graduate school
If you’re in need of student loans for graduate school, there are financial aid options like federal student loans and private student loans.
The federal government offers up to $20,500 in Direct Unsubsidized Loans. You can also take on Direct Grad PLUS loans to cover the rest of the cost. PLUS loans, however, have the highest APR of all federal loans. You can even get student loan forgiveness under some programs.
Private loans may be able to offer lower interest rates. And when you’re borrowing thousands of dollars, that certainly helps lower the cost of graduate school. That’s why in some cases it might make sense to look into private loans as a cost-effective option. You want to look into all of your graduate school loan options and the eligibility criteria.
3 top lenders offering private graduate student loans
Before taking out any loan, you’ll want to shop around and do your research. That’s especially true when considering a private student loan. These loans have fewer protections with private lenders, so it’s worth knowing in advance what you’re getting into and whether a company fits your needs.
Here are three private graduate student loan lenders to consider.
You can get private graduate student loans from LendKey, an online marketplace. LendKey works with various credit unions and financial institutions to offer you the best rates.
To see if you qualify, you’ll need to submit a student loan application on its site. Unlike many federal student loans, private student loans all check your credit and in many cases may require a cosigner even if you don’t necessarily have an adverse credit history.
LendKey’s website states, “A creditworthy cosigner can make all the difference when it comes to a private student loan application’s chances for approval. Cosigners play a critical role in helping borrowers to secure the best private student loans and qualify for a lower loan rate.”
A cosigner is typically someone close to you, like a parent or other family member. These individuals are legally on the hook for your loans if you don’t end up making payments on time. Being a cosigner is a big responsibility, but having one can unlock a better rate or be the key to getting approved.
Because LendKey acts as a lending hub and middleman that partners with banks and other financial institutions, fees and rates vary. Also, the rate you’re approved for can vary based on your credit. Creditworthy borrowers will get the best rates.
Another option for private graduate student loans is Credible. Similar to LendKey, Credible aggregates private student loan options from different lenders. This gives you the ability to compare terms and find the best rates, based on your credit.
Credible is free to use, and none of its partners have origination fees. Origination fees are fees you pay upfront for the lender to process the loan. There’s also no prepayment penalty, so you can pay off debt faster at no cost to you.
You can check your rate within two minutes. Doing so won’t affect your credit score since only a soft pull on your credit is requested. A hard credit pull isn’t formally done until you submit your application.
3. Sallie Mae
Sallie Mae is a major player in the private student loan space and also offers private graduate student loans. You can borrow up to the cost of attendance (but should only borrow what you really need!) and choose from fixed rates or variable rates.
You can also score an automatic payment interest rate deduction of 0.25 percent. You can choose from a standard graduate school loan, MBA Loan, Medical School Loan, Dental School Loan and more.
Best private graduate student loans: federal or private?
If you’re headed to grad school, you want to compare federal student aid versus private loans. While federal loans come with more protections like deferment and flexible repayment options, private loans could offer more cost savings. Depending on the ranges of rates, you could potentially save hundreds or thousands of dollars. Just be aware of the repayment plan you’ll have and the monthly payments as well as the benefits you might not get.
Consider what you’re missing out on when choosing private student loans — namely, federal protections like income-driven repayment and loan forgiveness programs. But if you aren’t interested in pursuing those options, a private loan could save you money. The key to saving money is finding the lowest rate, and evaluating each lender’s terms to find the right loan for you.
in 2 minutes
1Sallie Mae disclosures. Lowest APRs shown for Sallie Mae Loans: The borrower or cosigner must enroll in auto debit through Sallie Mae to receive a 0.25 percentage point interest rate reduction benefit. This benefit applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment, if available for the loan.
2Earnest: All rates listed above represent APR range. Rate range above includes optional 0.25% Auto Pay discount. Earnest disclosures.