November 29, 2022

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What Kind of Banks Give Out Student Loans?

Asking which banks offer student loans may seem easy, but different banks and lenders offer different options. That includes private and federal loans, so it’s important to know your options before signing on with anyone or any company.

First, you’ll need to apply for a loan with your bank or credit union. You can do so online or in person. Once approved, you will receive an offer letter detailing rates and terms (for example, monthly payments and the total amount due). If you accept those terms, your loan processing begins through the lender. Suppose any errors on your application or other requirements are not met (such as minimum credit score). In that case, a representative may contact you directly to resolve any issues before approving your loan.

Most banks allow you to refinance student loans at the current interest rates. So instead of paying off your original loans at their set rate, you pay off all of them at today’s rate. According to Lantern Credit at SoFi, “Student loan refinance loans are private loans and do not have the federal loan program’s debt forgiveness or repayment options.” 

Top Banks That Offer Student Loans

Many students turn to banks for loans because of their preferential interest rates and repayment plans. Because not all banks offer student loans, borrowers will likely signup with one of the following institutions.

 

Sallie Mae

Best for borrowers who need flexibility and payment options; offers standard student loans, PLUS loans, graduate student loans, and consolidation. Sallie Mae serves both undergraduate and graduate students.

  • Fixed Rates: 3.50% (APR)
  • Variable Rates: 1.13% (APR)
  • Loan terms: 5 to 15 years

 

Citizens Bank

One of Citizens Bank’s student loan services is Citizens Bank Direct which provides federal, private, and Parent PLUS loans. In addition, the bank offers a 15-month interest rate discount to students who pay on time.

  • Fixed Rates: 3.23% (APR)
  • Variable Rates: 1.03% (APR)
  • Loan terms: 5 to 15 years

 

Discover Bank

Discover has been giving out student loans since 2004. It also offers personal and business loans, credit cards, and checking accounts. In addition, you must be at least 18 years old, have a high school diploma or GED, and be enrolled in an accredited college or university to apply for a loan.

  • Fixed Rates: 4.84% (APR)
  • Variable Rates: 1.59% (APR)
  • Loan terms: 15 to 20 years

 

PNC Bank

PNC offers student loans to undergraduates and graduate students for undergraduate and graduate degrees. These loans are available for studies leading to careers in diverse fields, including healthcare, teaching, information technology, engineering, and law.

  • Fixed Rates: N/A
  • Variable Rates: N/A
  • Loan terms: 5 to 15 years

Remember, each bank has its own set of requirements for loan eligibility. Some require you to have an existing account with them, while others don’t allow you to take out more than one loan at a time. It’s also noteworthy that most lenders require you to be at least 18 years old to apply for a student loan.

 

The Process

You will need to complete and submit a Free Application for Federal Student Aid (FAFSA) form before you can apply for and obtain a student loan. Once that’s completed, you can then shop for a student loan from various lenders.

Many banks offer student loans in one form or another. Each has its interest rate and payment schedule. Therefore, it’s important to research which type of loan will work best for you, your family, and your budget.