Are you a student loan borrower with an uncertified student loan? Are you thinking of refinancing but not sure which student loans are best for you? Check out this list of uncertified student loans and compare Credible’s rates with our competitors.
An uncertified or non-certified student loan is a loan you can obtain from a private lender that doesn’t limit you to borrowing only the school-certified cost of attendance for uncertified student loans.
Typically, once your private loan is approved, a lender such as College Ave will require your school to certify the cost of attendance and your financial need before disbursing the loan. While many lenders won’t give you more than this amount, uncertified student loans aren’t subject to that limit.
Unlike with certified student loans, you’ll receive funds from uncertified student loans directly, rather than receiving a refund from your school after your tuition is paid. You can use the money for any purpose, including expenses the school doesn’t consider in estimating your cost of attendance.
Uncertified student loans can be harder to find than typical student loans, and they often have higher interest rates and origination fees. But they may be the only way to borrow if you need more money after exhausting your federal and certified loan options.
How to Apply For Uncertified Student Loans?
To apply for uncertified student loans borrowers need to have good credit history. Private lenders always take into account the credit history of the borrowers before approving a loan. This is why students who desire to obtain these loans should build their credit score and make their payment timely prior to applying for these loans. They may also have to have a cosigner with a good credit score to apply for these student loans
Finding the Best Uncertified Student Loans
Students should research well and explore all their options to find the best loan program. They should find out different loan programs that are offered by private lenders.
Who should take out an uncertified student loan?
You should take out private student loans only if you have exhausted federal aid.
Always complete your Free Application for Federal Student Aid (FAFSA) and borrow what you need from the U.S. Department of Education first—then consider how federal student loans, grants, and scholarships would compare with a private loan.
Once you’ve exhausted federal student aid, private student loan lenders could fill in the gap if you still need more money. Not all private lenders offer uncertified loans, but finding one may become necessary if you must borrow more than the school-certified cost of attendance.
If you are going to apply for an uncertified student loan, compare rates from multiple lenders. This will help you find a loan with competitive rates on the best terms. Our guide, on how to get a student loan can help.
Getting federal student aid is the best way to kickstart the funding of your college education. Federal student loans, grants, and work-study jobs are all excellent ways to get the money you need to pay for tuition and all of the other expenses that come with college.
But with costs soaring for American students across the country, federal aid often isn’t enough to cover all your needs.
That’s where private student loans come in.
When you’ve exhausted all of your other options and still come up short, working with a private student lender can help you get the funds you need.
Here are the best private student loan lenders of 2021 to help your search get started:
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Credible is an online lending marketplace that connects borrowers to private lenders.
The company doesn’t do any of the lending itself. Instead, you’ll fill out an application, and the platform will match you with multiple lenders that are willing to work with you.
It can save you a lot of time comparing rates from various companies. And Credible does a soft pull on your credit, so you don’t have to worry about your credit history being impacted.
Overall, Credible is a great way for borrowers to gain access to a network of lenders by filling out a single application. It’s free for you to use, and the application process is simple. They also offer student loan refinancing options as well.
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SoFi doesn’t provide loans directly to students, but they do offer parent loans. Fixed rates and variable rates both start off low and can be viewed online.
You can also sign up for autopay, which gives a discount when you enroll. If you don’t, expect to pay slightly more on both types of rates.
According to SoFi, parents can actually save with their loan product compared to the Federal Direct Parent PLUS loan. Not only are their rates lower, but they also don’t charge an origination fee. However, SoFi doesn’t offer any type of income-contingent repayment plan as the federal PLUS loan does.
Unlike typical student loan companies, SoFi’s parent loans don’t include any type of deferment period, so you’ll begin making payments as soon as you get funded. The minimum borrowed amount is $5,000 and goes up to the total cost of attendance (COA).
If you ever need another kind of loan offered by SoFi, you will receive a member rate discount of 0.125%. Another member perk is that you receive access to wealth advisors and career coaches.
Full review of SoFi
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Offering a broad range of student loans, Sallie Mae can fit a lot of different needs. You can get loans for both undergraduate and graduate programs, as well as parent loans if they’d rather take on the financial burden instead of the student.
What kind of interest rates can you expect?
They change regularly, but like other lenders, variable rate loans have a lower APR. Oftentimes, Sallie Mae’s interest rates for high credit borrowers are less than what you’d get with a direct federal student loan.
While you’re still in school, you can defer payments until after a six-month grace period upon graduation, but interest still accrues. Alternatively, you can make interest-only payments during your school years to help lower the financial burden.
Another option is to make a fixed payment during school and your grace period, which can save you money over time compared to the deferred payment option. It’s easy to apply for any student loan online with Sallie Mae, and you can receive a decision in about 15 minutes.
Full review of Sallie Mae
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Not only does Discover offers loans for undergraduate, graduate students, and parents. It also rewards students for academic achievement.
You can earn a 1% cashback reward on each new loan when you earn a 3.0 GPA or higher. Discover student loans also have no fees, including no late fees. Plus, you can get a 0.25% interest rate reduction while enrolled in automatic payments.
So what are the specifics for Discover student loans?
Despite being slightly higher fixed-rate loans, you do get a flexible repayment term, including forbearance for financial hardship and the ability to temporarily reduce your payments.
Another unique benefit is that Discover gives you ongoing access to loan specialists who can assist you at any time, day or night. So if you think you’ll have questions or feel insecure in the student loan process, this could be a worthwhile option for you.
Full review of Discover
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For flexible private student loan options, consider Ascent. You can get either a tuition loan that requires a co-signer, or an independent loan that’s just for undergraduate or graduate students.
Rates start off quite low for private loans, with both fixed and variable rates available. Quotes are available on their website.
You can also receive a 0.25% – 2.00% interest rate reduction if you choose automatic payments on your monthly bill. Loan amounts range from $1,000 up to your cost of attendance, although your total loan amount can’t exceed $200,000.
This is actually a pretty low minimum, so if you need a smaller loan to bridge the gap in your financing, Ascent student loans may be a good fit.
Terms last either 5, 7, 10, 12, or 15 years but choose carefully because you can’t change the timeline once you receive the funds. While you’re still in school, you can choose to defer payments (with interest accruing, of course) or the interest-only repayment option.
Want to cut back on the amount of interest you pay over time?
Ascent also offers the ability to do a $25 minimum payment plan while you’re in school. It’s not a huge financial burden but can save you more compared to deferred payments.
They also just launched a 1% Cash Back at Graduation program.
Worried about your future job prospects? After graduation, you can apply for forbearance if needed — something many private lenders don’t offer.
Full review of Ascent
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Common Bond offers student loans designed specifically for students, not their parents. You can find loans for both undergraduate and graduate programs, catering to a larger amount of borrowers.
Since the loans aren’t for parents with a more established credit history and higher income levels, CommonBond’s rates are slightly higher. How much higher depends on whether you choose a fixed or variable interest rate loan. Check out their rates online.
Still, compared to the current federal student loan rates for graduate students, you might actually get a good deal.
Another factor to consider when applying for a CommonBond student loan is the fact that you’ll need a co-signer. Once you make two years of payments, however, you can apply for a release so that you’re the only borrower on the loan.
You’ll receive a six-month grace period after graduation, but your loan still gains interest during this time.
If you ever experience economic hardship, you may also apply for forbearance. While you never want to have to use that type of protection, it’s good to have the option in your back pocket.
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Whether you’re headed to undergrad for the first time or tackling a career change by going back to grad school later on in life, College Ave can help you create a student loan that’s custom made for your needs. Their straightforward loan application takes all of three minutes and you’ll instantly if you’ve been approved.
Loans are available both directly to students and to parents and can pay up to 100% of the cost of college attendance, including those necessary “extras” like books and housing.
Loans are available with variable and fixed interest rates, ranging from 4.07% to 12.78% APR depending on your needs and creditworthiness. You can also qualify for an interest rate reduction if you set up automatic payments.
Deferred and interest-only repayment options are available while you’re enrolled in classes, and there are no fees to apply. The company can also help you refinance existing loans so you can take advantage of their low rates and easy-to-use interface.
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One of the most frustrating and stressful parts of the student loan process is having to re-up your application year after year, and not knowing for sure that you’ll have the funding you need in the future.
Citizens Bank offers a one-time, multi-year approval process that means you’ll be able to relax and focus on the important stuff: your schoolwork.
Citizens Bank’s loans carry no application, disbursement, or origination fees, and offer repayment timelines between 5 and 15 years to best suit your individual financial needs and circumstances.
Undergraduates can borrow up to $100,000 (with higher loan tiers available to those pursuing post-graduate and specialized education), and it’s easy to add a co-signer if you’re a brand-new borrower.
Depending on your repayment strategy, loan total, and other factors, current rates shown on their site range from 2.90% to 12.04%.
Apply for Private Student Loans
Once you’ve exhausted all of these options and still come up short for your college funds, then it’s time to consider a private student loan.
It seems like a lot of work to apply for each type of student aid, but it’s an extremely important process.
Borrowing tens of thousands of dollars may not seem like a big deal right now, but those monthly bills are going to stick with you for a long time. Give yourself the time and space to maximize your aid so that you can minimize your financial load in the future.
How to Find the Best Private Student Loans
Determine Your Direct Needs
Once you determine that you do in fact need a private student loan to meet your college costs, start by figuring out if the loan will go under your name or your parents.
For direct student loans, decide if you’ll have access to a co-signer (like a parent) or if you’ll take on the burden entirely on your own. Those decisions alone can narrow down your lender.
Next, think about what your income will be like when you’re attending school. Will you have a part-time job or ample savings on hand to take care of any payments due? If not, you may need to find a lender who offers deferred payment, even if it means accruing more interest.
Gauge Your Future Needs
You may also be interested in future forbearance options. No one wants to imagine themselves as going through financial hardship once they’ve earned their degree, but it’s a very real possibility for anyone.
If you don’t have a strong financial safety net, you may benefit from choosing an online lender that has some type of repayment flexibility.
Predicting your future needs for student loan repayment is like gazing into a crystal ball, which we simply can’t do. So the wisest way to tackle the issue is to hope for the best but prepare for the worst.
You likely don’t know what your job situation or income will be like by the time you graduate, so try to buffer in as much flexibility as possible. Also, be careful with your spending and refrain from racking up unnecessary credit card debt. Your future self will thank you!
Choosing the Best Student Loan Lender
Not all lenders are created equally so be sure to shop around so that you can find the best student loans for you. The things you’ll want to compare are fees, rates, and loan terms. Some lenders may charge an origination fee, which can decrease the funds you actually get from your loan amount.
The interest rate can be either fixed or variable. If you choose a fixed interest rate, you’ll never have to worry about your payments changing if you keep on top of your payments. With a variable interest rate, your interest (and consequently, your monthly payments) can change regularly.
The loan term determines how long you’ll repay your private student loan. A shorter term saves you in interest over time but also results in higher monthly payments. You can always refinance student loans if your financial situation is different than you expected after you graduate.
Other Eligibility Factors for Private Student Loans
Another factor to consider when researching student lenders is what enrollment and academic standards they require. You may need to maintain a certain enrollment status such as half-time or full-time to be eligible, for example. Alternatively, you may have to achieve certain academic standards in order to keep receiving student loans each year.
Also, find out how the student lender treats repayment while you’re still in school. Sometimes you can defer payments altogether, but interest keeps accruing. That means you’ll graduate with a bigger loan balance than what you started with.
How to Apply for Private Student Loans
Applying for a private student loan is quite simple. Once you’ve narrowed down your list of lenders you’d like to work with, you can generally start the application process online. Expect to submit some basic personal information as well as details regarding your upcoming education costs.
You’ll most likely need the following information:
- Contact information
- Social security number
- School and program information, including your expected graduation date
- Requested loan amount and other financial aid you’ve received
- Current financial information, such as income
- Personal contacts
- Co-signer information
Applying with a Co-signer
If you have a co-signer, most lenders ask for their contact information and then reach out to the co-signer directly in order to get more details from them.
Once you submit your application, the lender will review your credit history and, if applicable, your co-signer’s. You’ll then receive a decision on your application. If you’re approved, you’ll see one or more offers.
You can compare how the interest rate and payment amount change with different term and repayment options. Pick one, sign the loan agreement, and your lender will disburse the funds directly to your school.
Frequently Asked Questions
What is a private student loan?
A private student loan is a loan made by either a bank, credit union, or state-based organization. It’s not made by the U.S. government and does not require a FAFSA application.
What is the difference between federal and private student loans?
Federal Student Loans
Federal loans are made by the U.S. government. Payments aren’t due until after you graduate, and interest rates are fixed. No credit check is ever required (except for PLUS loans).
During the student loan repayment period, borrowers can change their payment plan if needed. Loan forgiveness is also possible after a certain amount of years has passed if the borrower works in public service.
Private Student Loans
Private student loans are made by banks, credit unions, or state-based organizations. Terms and rates are set by the lender. Payments are often required while the borrower is still in school, and although payments can be deferred, interest often still accrues. This increases the principal balance. As for interest rates, they can either be fixed or variable.
Private loans often require a co-signer, which often lowers the interest rate. Refinancing is always possible with a private student loan, and doing so can also possibly lower the interest rate as well as the monthly payments.
How do private student loans work?
Getting a private loan doesn’t require the student to submit a FAFSA application prior to applying. If approved, the funds can be used for any education-related expense.
Payments begin after graduation or when enrollment drops below part-time. For most lenders, the grace period for either option is 6 months. After the six month grace period has elapsed, students are expected to make payments in full.
Usually, you have the option of deferment or forbearance until you have graduated, make interest-only payments, or make full payments while you’re still enrolled. Many borrowers choose the interest-only repayment plan so their loan principal is smaller when they graduate.
What is the difference between certified and non-certified student loans?
A certified loan is distributed by a lender who talks directly with the borrower’s chosen college about his or her loan. Funds are sent directly the college, and any remaining amount is then sent to the borrower by the college. Certified loans usually have lower interest rates than non-certified private loans and are often tax-deductible.
Uncertified student loans are distributed by lenders who are not in any contact with the borrower’s school. All money goes directly to the borrower to be used at his or her discretion. These types of loans usually have higher interest rates than certified student loans and are often not tax-deductible.
How do I find a private lender that works with my school?
Call your school’s financial services department and ask. Some schools have links to certified lenders on their websites, but they don’t always. If they don’t, call or email the financial services department for a list of certified private student loan lenders.
What are the advantages of applying for a private student loan with a creditworthy co-signer?
There are two advantages. The first advantage is that a co-signer can help you qualify for loans for which you would normally be denied. The second advantage is that a co-signer can help you get a better interest rate, which will save you money over time.
If you don’t like that your co-signer’s credit is at stake, most lenders allow for a co-signer release after a certain amount of on-time payments are made during the repayment period.
How long is a co-signer responsible for my loan?
It varies from lender to lender. Some lenders allow for co-signer release after 24 months of on-time payments, whereas others want 36 months. Some lenders also require that your gross annual income reach a minimum amount when compared to your loan principal. This is not as common as the requirement for 24 months of making your payments on time.
Can I get a private student loan without a co-signer?
You can if you have a strong credit score. If you’ve been in the workforce and have made payments on credit cards or car loans, it’s very possible you won’t need a co-signer. However, students who are fresh out of high school and have a zero payment history will more than likely need a co-signer to take out a private student loan.
How long does it take to get a student loan?
That depends on whether the loan is a certified or non-certified student loan. A certified loan first needs to be distributed to your school, and it can take 1-2 weeks before the remaining funds will be sent to you.
Non-certified loans can be obtained much faster, sometimes in as little as a few business days. Regardless of how quick your loan will be processed, always start loan shopping as early as you can.
How much can you get in private student loans?
It depends on the student loan lender. Some of the larger lenders can guarantee the total cost of attendance, no matter what it is. Smaller lenders usually have a cap, which is usually around $100,000 to $150,000. Verify with your school what the total COA will be, and then use that number when lender shopping.
How is the interest calculated on my student loans?
Student loan interest is compounded daily. So each day a little bit of interest is added to your loan principal. With every payment you make, interest is the first thing to get paid before any amount goes towards your loan principal.
To figure out your daily interest rate, first, take your rate and divide it by 365. If your rate is 4.5%, your daily interest rate would be .012%. That amount on a $20,000 loan equals out to $2.40. So for the next day, your loan principal is then $20,002.40, which is then taken into account when calculating interest accrual.
How do I consolidate my student loans?
You must apply with a lender who offers loans large enough to pay off your existing student loan debt. If your credit profile is strong, you may qualify on your own, but another option is to use a co-signer for a better rate and term. Many lenders offer refinancing options.
Other types of loans you can use include personal loans, home equity loans, and consolidation loans. Before you start applying to lenders, call your current lenders and ask what the payoff amount is. Add them all up. The total is what you need to borrow from a new lender.
The benefits to consolidating your student loans include:
- One low monthly payment
- Possible lower interest
- Possible better loan terms
Can I consolidate my private and federal student loans together?
Yes, you can, but it may not be to your advantage to do so. If you consolidate the two, you may miss out on potential student loan forgiveness programs, lower interest rates, and federal student loans’ unique payment options.
If your credit score is strong, it may very well be in your interest to do so, however, since private student loans revolve around credit scores. It’s very possible to get a better rate than what you originally received on your student loan — if you don’t mind giving up the benefits that come with federal loans.
Can I refinance student loans?
Refinancing is similar to consolidating. To refinance, you’ll want to have a strong credit score and report. If your credit score is weak, it’s unlikely refinancing will be to your advantage.
However, if you do have a good credit score, search for a lender who offers student loan refinancing. Compare their rates to what you currently have, and make sure your remaining principal doesn’t exceed their loan limits.
When should I apply for a private loan?
It’s always wise to apply as soon as possible so you don’t miss any deadlines your school has, regardless of whether you’re working with a certified or non-certified lender.
Sometimes approval can take only minutes, while in other cases it can take as long as a few weeks. If you plan to apply with a co-signer, make sure you give yourself and the banks a bare minimum of at least a month. This gives them enough time to request additional paperwork they may need and gives you enough time to find and collect it.
Even if you don’t have a co-signer, give yourself over a month for any potential back and forth with the lender. It’s also wise to wait to see the potential financial aid results from your FAFSA application.
How do private student loans get disbursed?
It depends on whether your lender is certified or non-certified with your school. If it’s certified, your lender will pay the school directly, and your school will send you any remaining balance once tuition and fees have been taken out.
If you’re working with a non-certified lender, the check will be sent directly to you, either through direct deposit or mail.
What are my repayment options?
Repayment options depend on the lender you choose. Overall, there are four repayment plans that most lenders tend to use:
- Deferment: With a deferment, the borrower pays nothing while he or she is enrolled in school. Interest still accrues, and the loan balance grows a little bit every day.
- Partial Interest: Some lenders offer a flat-rate monthly payment that covers part of the monthly interest. This keeps the balance growth to a minimum.
- Interest Only: The borrower pays only interest each month. This keeps the balance the same until the borrower is able to make full principal and interest payments.
- Principal and interest: This is a full monthly payment, which is the same payment the borrower would make after he or she graduates or drops below part-time enrollment.
How can I pay off my student loans faster?
There are a variety of ways to do this.
- Make interest or principal and interest payments while you are still enrolled. This prevents your principal from growing while you are in school.
- Make an extra student loan payment whenever you can. To do this, always pay your minimum payment. After that, try to set aside as many extra payments as you can. Many people like to make an extra payment every three months, which accounts for a total of four extra payments each year. Before you make the extra payment, be sure to write your lender and explain what you are doing with the extra money. If they don’t get the letter, they may just assume the money is to be put towards your next month’s payment rather than going wholly towards your principal.
- Make a large lump sum payment. Many people do this by putting their tax returns towards their student loans.
- Pay more than the minimum each month. Pay more than the minimum each month and your principal will go down more quickly. Interest accrues daily and is based on your principal. The sooner your principal goes down the sooner you’ll start paying less in interest.
- Refinance. By refinancing, you may get a lower interest rate and better loan term.
Student Loan Forgiveness
Unfortunately, student loan forgiveness does not exist for private student loans. Yes, some employers may pay off your student loan for working with them for a set period of time, but these jobs are in hard-to-fill areas. Other options that exist may hurt your credit score and are not recommended.
What happens if you default on private student loans?
Your credit score is negatively impacted, first and foremost. From there the lender may seek repayment from your co-signer if you have one. More than likely, you’ll start receiving calls from a collection agency. It’s even possible the lender could demand you repay the full amount, take you to court, garnish your wages, or seize any assets you may have.