How To Find The Best Student Loans And Rates In 2020

Paying for college is already challenging enough, but then you have to think about finding the best student loans and student loan rates, and it can just be daunting. How do you find a lender? What should you think about? How do you know you’re getting a good deal? It can all be overwhelming.

When I was in college, there weren’t a lot of options. If you got Federal loans, you filled out your FAFSA and waited for your email from the financial aid office. If you were looking for private loans, you went to a major bank.

That’s all changed today. There are lots of options, and comparing them all could be a challenge.

Let’s take a look at how to find the best student loans and rates and what you should consider before borrowing. If you're just "ready to go", jump to Credible and compare the best private student loan options right now in 2 minutes or less.

Federal vs. Private Student Loans

The first thing to understand is that you don’t get a choice in your student loan rates with Federal loans. Federal student loan rates are set by the government and change periodically.

However, for most people borrowing Federal student loans, that doesn’t matter because they are trying to take advantage of the special student loan repayment programs or loan forgiveness plans that come with Federal student loans.

Federal student loan interest rates vary, from as low as 4.53% to as high as 7.6%. They actually decreased by roughly 10% this year. Check out this chart to see where you student loan interest rate may fall:

2019 - 2020 Student Loan Interest Rates

These rates are for loans taken after July 1, 2019 but before July 1, 2020:

2018 - 2019 Student Loan Interest Rates

These rates are for loans taken after July 1, 2018 but before July 1, 2019:

Loan Type	Borrower Type	Interest Rate
Direct Subsidized Loan	Undergraduate	5.05%
Direct Unsubsidized Loan	Undergraduate	5.05%
Direct Unsubsidized Loan	Graduate or Professional	6.6%
Direct PLUS Loan	Parents, Graduates, and Professional	7.6%
Perkins Loan	Undergraduate	5%

For many borrowers, Federal loans with be the best student loans. However, if you have great credit (or a cosigner with great credit), a private loan could potentially save you a lot of money.

Loan Type	Borrower Type	Interest Rate
Direct Subsidized Loan	Undergraduate	4.53%
Direct Unsubsidized Loan	Undergraduate	4.53%
Direct Unsubsidized Loan	Graduate or Professional	6.08%
Direct PLUS Loan	Parents, Graduates, and Professional	7.08%
Perkins Loan	Undergraduate	5%

Finding The Best Student Loans

If you go the private student loan route, there are a lot of lenders with different programs and it’s important to compare.

We’ve reviewed most of the major student loan lenders and have a comparison tool here: Comparing Private Student Loan Lenders.

We also recommend really researching the different loan programs out there. There are a lot of lenders that offer different programs and incentives that can be helpful depending on the type of degree and what you believe your employment will look like after graduation.

If you already have student loans and are looking to refinance, it’s also essential to compare.
Some of the key features that you should look for to find the best student loans include:

• Interest Rate (the lower, the better)
• Loan Term (anywhere from 3 years to 25 years)
• Origination Fees (you want none)
• Repayment Plan Options 
• Forbearance Options
• Bonus Offers
• No Prepayment Penalties
• Cosigner Release (since it's almost impossible to get a student loan without a cosigner)

Comparing The Best Student Loan Rates

The best private student loan rates range from 2.99% APR to over 14.99% APR, depending on various factors - including your credit score, household income, cosigner, and more.
We recommend using a service like Credible to compare the best student loan rates. With Credible, you can compare multiple lenders in about 2 minutes. It’s quick and easy, and will give you a snapshot of what you might see for student loan rates.

Check it out here and see for yourself: Credible Private Student Loan Comparison.
Credible doesn't have every lender available, and it's important to shop around. When shopping for a student loan, remember that most banks and credit unions will do a "soft pull" of your credit on the initial application. That's okay. If you do all your loan shopping within a 2 week period of time, it shouldn't hurt your score overall.
When you do a formal application, the lender will do a hard pull. You should only move to this part once you're ready to go.
Finally, remember it can take about 30 days to complete the application from start to finish. If you're looking to start college in August, you should probably have your loans all ready to go no later than July. Start shopping now! You can find the best private loans here.

Our Picks For The Best Student Loans

If you're ready to shop around, here are our picks for the best private student loans. We recommend comparing all of them - it honestly only takes a few minutes. You can take a look at our full list of the best private student loan lenders.
Considering everything else you've done to apply for college at this point in time, spending an hour to compare the best student loans is a no brainer!

1. Credible

Credible is our #1 pick for the best private student loans because they are a comparison tool that shops all the major private loan providers to give you the best rates and terms possible. Instead of manually doing the work, Credible shops:

• Citizens Bank
• College Ave
• Connext
• Discover Student Loans
• IHelp
• EDVestIn
• Raise Private Student Loans
• Sallie Mae

These are pretty much all the major private student loan lenders available. The cool thing with Credible is that it takes about 2 minutes, and you can get a good sense of your loan options.