Choosing a private student loan lender can be difficult, especially if you’re not sure what to look for. If you’re trying to choose between private student loan lenders, you may be considering Sallie Mae and/or College Ave. These popular lenders have been in the business for a while now, but which one is the best for your particular situation?
Our comparison of Sallie Mae and College Ave begins with discussing what type of student loans they offer. Private and federal student loans are very different in many ways, so it’s good to know what other options you have. At the same time, you should know that private student loans are a great resource if you’re looking for ways to pay for college.
By the time you’re finished reading this article, you’ll know whether or not College Ave or Sallie Mae is right for you.
Choosing your student loan lender can be a big deal, especially considering how much money you’ll be borrowing to fund your education. It pays to choose wisely to set yourself up for success in the future.
Ready to get started? Let’s take a look at what types of student loans are available to you.
Types of Student Loans
There are two main types of student loans: federal and private. Let’s take a closer look at the main characteristics of each one:
Federal Student Loans
Funded by the government, federal loans are available for both students and their parents. These loans can be subsidized or unsubsidized. These loans come with a fixed interest rate and a variety of repayment plans. Payment is not due until you graduate, but certain balances may even qualify for loan forgiveness. You can consolidate federal loans to take advantage of a single fixed interest rate.
Private Student Loans
Private: These loans originate from a private lender, such as a bank, credit union, state agency, or school. They often require a credit check but specifics will vary from one lender to the next. Private student loans do not offer income-driven repayment plans or loan forgiveness.
Private student loans may be up for repayment while you’re still in school. While you can sometimes choose between variable and fixed interest rates, these loans are typically unsubsidized.
This means you will be responsible for any interest on the loan. You can’t consolidate private student loans, but you can refinance them to take advantage of competitive interest rates.
Best Private Student Loans
Some of the best private student loan options offer low interest rates that you can take advantage of:
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APR starting at 3.47%
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APR starting at 3.99%
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APR starting at 3.69%
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- Apply in less than 3 minutes
- No application or origination fees
- Cover 100% of school costs
- Verifying rates will have no impact on your credit score
- No origination fees or prepayment penalty
- Multiple payment options
- Checking rates will not impact your credit score
- Lowest rates if you have a cosigner
- Access to outcomes-based loans for eligible persons
- Covers up to 100% of school-certified costs
Refinancing Student Loans
Alternatively, you may have heard of refinanced loans. These loans, whether they’re federal or private, have been refinanced after a college student has graduated. The benefits of refinancing student loans vary from one person to the next, but they’re often sought after as a way to pay less overall with a lower interest rate than the one attached to it when the loan was first originated.
Sallie Mae versus College Ave Student Loans
Check out the specifics on College Ave and Sallie Mae to find out which of these two popular private student loan companies earns your business.
College Ave Student Loans
- Rates: 0.94%-12.99% for variable loans and 3.39%-13.95% for fixed loans with autopay
- Ideal for: flexible loan terms, a quick application process, additional time before repayment comes into effect
You won’t pay an origination fee with College Ave, though you will have access to some of the lowest starting interest rates in the industry.
College Ave offers a wide variety of repayment options for undergraduates, graduates, parents, and those paying for career training. Plus, if you set up automatic payments, you can instantly reduce your interest rate by 0.25%.
College Ave doesn’t penalize you for early repayment. However, you will need a credit score of at least 660 in order to qualify.
Unlike Sallie Mae, College Ave is not as revealing of its eligibility requirements, but it does offer loans of $1,000 or more to students. At the same time, loans are capped at $150,000 for some degrees, which can drive away students in fields like medicine and law.
There are several customer support options available to get into contact with College Ave. You can choose from repayment terms lasting 5-20 years. If you are completing a fellowship or residency, you’ll also have the opportunity to extend your deferment.
Repayment terms come in one of four forms so you can customize your loan to fit your needs. The initial loan application is quick and easy, as the software knows which costs are associated with your school of choice.
However, you should know that, if you need a cosigner for your loan, they cannot be released from the loan terms until half of your repayment period has gone by.
College Ave offers private student loans with multiple repayment options. Apply online in 3 minutes and get an instant credit decision. No application, origination, or disbursement fees.
Pros
Variable and fixed loan terms
Loan refinancing available
Four repayment options to choose from
5-20-year repayment plans
Several ways to reach customer support
Cons
- Eligibility requirements aren’t as clear as they could be
- $150,000 loan limit affects certain graduate school programs
- No perks for signing up
- Cosigner released only after half the repayment period has gone by
College Ave also provides refinancing terms. You may be eligible for refinancing interest rates from 3.44% to 7.99% for variable rate loans and/or fixed rate loans at 3.49% to 7.99%.
College Ave offers private student loans with multiple repayment options. Apply online in 3 minutes and get an instant credit decision. No application, origination, or disbursement fees.
Sallie Mae
- Rates: 3.25%-13.59% for variable loans and 3.75%-13.72% for fixed loans enrolled in autopay
- Ideal for: inclusive terms, available deferment, early cosigner release, additional educational resources
Sallie Mae is a popular private student loan service that offers students several features. Loans range from $1,000 to the full cost of attendance and can be repaid over 10-20 years after graduation. Plus, half-time students can apply for loans from Sallie Mae as well. There are no early repayment penalties either, so you can take advantage of paying less over time without paying for it.
There are plenty of online resources available from Sallie Mae, for both current and future college students. Sallie Mae’s website features scholarship directories, calculators, and financial planning advice aplenty. There’s no origination fee for your loan, but you will get a 0.25% reduction in your interest rate if you sign up for automatic payments.
Sallie Mae also offers 4 months of free access to Chegg study packs. You can pause your loan for up to 12 months at a time using forbearance, which is useful for getting ahead of your payments. If you ever have any questions, simply call the U.S.-based customer service hotline. You can also visit Sallie Mae on their mobile app.
Pros
- Fixed and variable loan terms
- Cosigners are released once the borrower graduates and demonstrates they can take over the loan
- Free Chegg study pack access for 4 months
- Loans for half-time students
- 10-20 year repayment plans
- No early repayment penalty
Cons
- Late payments can cost you a lot
- Additional fees associated with the account
- Graduates are limited to a single repayment plan term, depending on their field of interest
- No refinancing options are available
- Some customers have reported a negative experience
- Customer service is not available on weekends
Sallie Mae offers several resources for undergraduates and graduates alike. You can also apply for bar study loans, K-12 loans, or funding to support career training as well.
How to Choose a Lender For Your Private Student Loan
No matter if you plan to attend community college or want to save money on college textbooks, private student loans can help you pay for college attendance. Choosing your lender, on the other hand, may not be so easy a task to accomplish.
If you’re not sure where to start when comparing lenders, check out the following features you’ll commonly find in your search. They may be able to help you decide between lenders such as Sallie Mae and College Ave.
Eligibility Requirements
Private student loans are useless if you can’t qualify for them. Find out what specific eligibility requirements are for the private student loans you want by speaking with the lender directly. You’ll find more information about Sallie Mae and College Ave in our next section, but don’t underestimate the power of picking up the phone when it comes to checking eligibility requirements.
Application Requirements
Once you’ve determined you’re eligible for a private student loan, you’ll need to gather the appropriate documents. Most applications will specify what the lender needs from you to determine what loan package they can offer you.
Interest Rates
Finding the lowest interest rate possible can be a great goal for college students looking for a private student loan. However, you want to balance this number with the rest of the loan package. Sometimes it’s good to take a higher interest rate from one lender if they offer better options for other key areas such as repayment terms.
Repayment Options
Speaking of, you should investigate what repayment options are available to you. Consider both worst-case circumstances as well as positive outcomes. Economic situations can easily change, so knowing what you’re up against can help you figure out the best plan of action.
Lender Reputation
The best private student loan lenders work with you as you learn and earn. At the same time, having to deal with the nightmare of bad customer service can quickly devalue any low interest rate and otherwise spectacular loan terms. Find lenders that support your learning journey, rather than hinder it.
Additional Benefits
Private student loan companies are vying for your business, maybe even as much as you’re competing for a position in your chosen industry. To stand out from the other guy, they may offer certain exclusive perks. Look into what these might be to see how your private student loan lender can do more.
Besides these particulars, you may also want to think about what your priorities are when obtaining a private student loan. For example, do you want a loan that forces you to repay it quickly so you don’t pay more over a longer period of time? Would you prefer a loan that offers a flexible payment plan since you’re not sure what you’re going to do after college?
The answers to these questions can help you not only find a private student loan lender with favorable qualities but also help you to set up budgeting and savings goals to graduate with less debt. It’s all about planning for the future, and not just in terms of your career.
FAQs
Private and federal student loans vary based on how much you can qualify for, who funds those loans, eligibility requirements, and repayment plan options. Unlike free college in Germany, many American students have to pay for their education.
You’ll need to find out the eligibility requirements for a private lender before you apply. Simply navigate to the lender’s website and inquire about what their terms are. As long as you are eligible, you can complete an application. Those students with the highest credit scores can take advantage of lower interest rates.
You don’t necessarily have to have a cosigner, though some lenders do require it for certain types of loans. With that said, a cosigner can help your chances of getting approved if they have a high credit score.
The lower an interest rate is, the less you’re paying overall for taking out the loan. Your eligibility for a lower interest rate depends on your credit score, as well as other financial aspects. The best way to find a low interest rate is to get a few quotes from different lenders and compare them.
Many students take advantage of side hustles to pay off student loans. You can also create a savings account and install one of the many budgeting apps for college students to stash away a lump sum for paying off student loans after graduation. There are also many employer programs out there, such as the Starbucks tuition reimbursement program, which can help you pay for college as you serve customers.
Pay it Forward to Your Future Self
Taking out private student loans can help you achieve the career and lifestyle you’ve always wanted. Knowing which private student loan service to choose, however, can be a difficult task.
We hope this article has helped you to see what loan terms you can take advantage of from Sallie Mae and College Ave. Set yourself up right with a quality private student loan company that will boost your potential and put you on the path to a bright future.
College Ave offers private student loans with multiple repayment options. Apply online in 3 minutes and get an instant credit decision. No application, origination, or disbursement fees.
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1) Rates shown include auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary Information advertised valid as of 09/03/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
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