“Cheapest” Student Loans – How to Find Student Loans that Save You Money

Student loans can be a necessary evil when it comes to financing the cost of a college education. Most students graduate with some level of student loan debt.

But, loans don’t have to be debilitating if you understand your options and choose loans that offer you fair terms and rates.

A stack of bills with a graduation cap sitting on top.

Where to look for the “cheapest” student loans

While there are many places to look for student loans, there are two main places that you should be looking.

Consider these options for student loans, in this order:

1. U.S. Department of Education (Federal student loans)

The U.S. Dept of Education is the single biggest lender for student loans. They offer students thousands of dollars in loans each year.

In almost all cases, these loans are considered favorable to private lenders. They offer borrower protections like deferment and forbearance in the event that they are having trouble repaying their loans. It’s generally advisable that students maximize their federal loans before considering a private lender to finance the cost of college.

Loans offered by the U.S. Dept of Ed include:

  • Federal Direct Subsidized Loans
  • Federal Direct Unsubsidized Loans
  • Federal Perkins Loans
  • Federal Direct PLUS (Parent) Loans

2. Private lenders

Although private student loan lenders have often been characterized poorly in the past, this is an industry that is rapidly evolving. And many students rely on private lenders to help finance their education.

Many private lenders will require either a co-signer or some other form of collateral to secure your loan–and they may only accept you if you have a strong credit history. But, they also can offer more flexible interest rates and consolidation/refinance options that are not available through the U.S. Department of Ed’s federal loan programs.

See the tips below for help with deciding which private lenders are best for you and will also help you save the most money on your loans.

Things to look for in the “cheapest” student loan

Although the term “cheapest” in terms of student loans may seem like an oxymoron–you will always be forced to pay interest–there are still some things that you can look for when considering your loan options. These factors can help you save big money.

1. Low-interest rate

What is generally considered the most important factor in choosing a loan is what interest rate you’ll receive.

Simply put, the interest rate that you pay is what percentage of that money you’ll pay extra–each year on the remaining balance–for financing the loan. Small changes in interest–say 1 or 2%–can add up to thousands of dollars over the life of a loan, depending on how much is being borrowed.

So, be very careful when considering student loan providers, to make sure that you’re getting a good deal on the rate you’re being offered.

2. Reasonable repayment period

Although a longer repayment period can seem like a good idea because it will lower your monthly loan payment, extending the terms of your loan can end up costing you thousands in interest.

For each additional month added on to your loan, you are paying more to finance that money. So, it’s in your best interest to choose a repayment period that pays off your loans as fast as possible while maintaining a manageable monthly payment.

3. No added fees or charges

Under no circumstances should a borrower ever have to pay extras fees or penalties for their loan (except for maybe late-payment fees).

Some lenders will charge things like origination fees on student loans or charge a pre-payment penalty if you try to pay your loan off earlier than the original term of the loan.

Do NOT pay these fees–they should be immediate red flags that the lender is not trustworthy.


Lender Rates (APR) Eligibility
Citizens logo.
6.98%-15.04%* Variable
5.99%-14.00%* Fixed
Undergraduate and Graduate
Sallie Mae logo.
6.37% - 16.70% Variable
4.50% - 15.49% Fixed
Undergraduate and Graduate
Credibe company logo.
4.98% - 16.85% Variable
4.07% - 16.49% Fixed
Undergraduate and Graduate
Lendkey company logo.
6.07% - 11.31% Variable
4.39% - 10.39% Fixed
Undergraduate and Graduate
Ascent company logo.
6.24% - 15.85% Variable
4.29% - 15.76% Fixed
Undergraduate and Graduate
6.54% - 11.08% Variable
3.95% - 8.01% Fixed
Undergraduate and Graduate
Earnest company logo.
5.62% - 16.85% Variable
4.39% - 16.49% Fixed
Undergraduate and Graduate
4.98% - 12.79% Variable
8.42% - 13.01% Fixed
Undergraduate and Graduate
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.

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