4 Banks That Offer Student Loans

A few types of lenders offer private student loans, including online lenders, traditional banks, and credit unions.

Depending on your needs, getting a student loan from a bank might be the right choice for you — especially if you already have a bank account and can qualify for loyalty discounts on a student loan.

Citizens

Citizens offers student loans from $1,000 to $350,000 with repayment terms from five to 15 years.

If you already have an account with Citizens, you could get a 0.25% loyalty rate reduction — plus another 0.25% off your rate if you sign up for autopay.

Sallie Mae

With Sallie Mae, you can borrow $1,000 up to 100% of the school-certified cost of attendance with repayment terms ranging from 10 to 20 years.

Additionally, if you apply with a cosigner, you can apply for cosigner release after just 12 months of consecutive, on-time payments.

Banks vs. other student loan lenders

While banks tend to be similar to other types of student loan lenders, here are a few differences to consider:

• Fewer options for bad credit: You’ll generally need good to excellent credit to get approved for a private student loan. But some banks may have more stringent credit qualifications. This might make it hard to qualify if you have poor or fair credit.
• Might perform a hard credit pull: Some banks, such as Sallie Mae, perform a hard credit check before you can see your personalized rates. This hard credit pull can have a slightly negative impact on your credit score. Online lenders, on the other hand, tend to use only a soft credit pull before showing you the rates you might qualify for, and will save the hard credit pull for when you apply for a loan.
• Longer application process: Depending on the bank, it might take longer to get a student loan in comparison to an online lender.

Tip: If your private student loan is taking a while to process and you need money quickly, you could consider applying for an emergency personal loan to help cover expenses in the meantime. Once you get your student loan funds, you can use them to pay off the personal loan.

Just keep in mind that you typically can’t use a personal loan to pay for education costs like tuition and fees. But you can typically use personal loan funds to pay for housing, groceries, and other living expenses.

If you decide to take out a private student loan to pay for college, remember to compare as many lenders as you can — including banks and other types of lenders — to find the right loan for you.

How to pick the best student loan for you

To find the best student loan for you, you’ll need to shop around and compare your options from as many lenders as you can. You’ll need to consider several important factors as you do your research, including:

• Interest rate: The interest rate on a loan plays a major role in determining how much you’ll pay for it over time. You’ll also need to decide whether you’d prefer a fixed or variable rate. A fixed rate will remain the same over the life of your loan, which means your payment won’t ever change. A variable rate might be lower in comparison — however, it can also fluctuate over time.
• Repayment term: The shorter the term, the less you’ll pay in interest. Because of this, it’s usually a good idea to choose the shortest term you can afford.
• Cosigner release: Some lenders allow cosigners to be released from the loan once you’ve made on-time payments for a certain amount of time. If you’d like to remove your cosigner from the loan in the future, be sure to check whether the lender offers cosigner release.
• Discounts: Depending on the lender, you might be able to take advantage of discounts. For example, many lenders provide rate discounts if you sign up for automatic payments. Others offer loyalty discounts if you already have an account with them.

How do student loan interest rates work?

Student loan interest rates vary depending on the type of student loan you borrow and your circumstances.

• Federal student loan interest rates are fixed rates set by Congress. Your interest rate is determined by the federal loan you borrow, your dependency status, and your year in school.
• Private student loan interest rates can be either fixed or variable, and are determined by your credit score and the repayment term you opt for. Depending on your credit score, your interest rate for a private student loan could be lower than what you’d get with a federal loan.

Here’s a look at how current federal student loan interest rates compare to private student loan interest rates for borrowers who received a private loan through Credible in June 2023: