Ratings Methodology for
Student Loan Origination
Student Loan Origination
NerdWallet’s overall ratings for student loan origination are weighted averages of ratings in the following categories:
• Faster repayment
• Disclosures
• Availability
• Payment flexibility
• Customer support
• Faster repayment
• Disclosures
• Availability
• Payment flexibility
• Customer support
Data collection and review process
Our survey of more than 29 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.
We consider 40 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.
The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.
We consider 40 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.
The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.
Information updates
Student loan questionnaires are reassessed annually, and writers and editors make review updates throughout the year as necessary. We work to maintain contact with providers to keep information current.
The review team
The review team is made up of student loans writers and editors who cover student finance topics, including student loans, college debt and college alternatives. Each writer and editor follows NerdWallet’s strict guidelines for editorial integrity.
In addition to NerdWallet, the work of our team members has appeared in The New York Times, The Associated Press, Nasdaq, MSN, MarketWatch, Yahoo! Finance and other national and regional media outlets. The student loan team’s writers and editors combined have more than 30 years of experience in finance.
In addition to NerdWallet, the work of our team members has appeared in The New York Times, The Associated Press, Nasdaq, MSN, MarketWatch, Yahoo! Finance and other national and regional media outlets. The student loan team’s writers and editors combined have more than 30 years of experience in finance.
For faster repayment
We pay close attention to the following:
Offers a 10-year term or shorter.
Has three or more loan terms.
Allows greater-than-minimum payments through autopay.
Allows bi-weekly payments through autopay.
In-school repayment option.
The best lenders for faster repayment generally offer three or more in-school repayment options in addition to full in-school deferment and full in-school repayment.
The best lenders for faster repayment generally offer three or more in-school repayment options in addition to full in-school deferment and full in-school repayment.
For disclosures
We consider the following:
• Interest rates
• Soft credit check utilization
• Fees
• Underwriting requirement disclosures
Top lenders generally allow borrowers to get their interest rate and loan terms with a soft credit check and disclose their interest rate range, minimum income requirements and minimum credit score requirements.
• Interest rates
• Soft credit check utilization
• Fees
• Underwriting requirement disclosures
Top lenders generally allow borrowers to get their interest rate and loan terms with a soft credit check and disclose their interest rate range, minimum income requirements and minimum credit score requirements.
For availability
We look at the following eligibility requirements:
• Visa-holders
• State of residence
• School enrollment status
• Co-signer
Top lenders generally lend to students in all states, to visa-holders and to students enrolled less than full time. These lenders also don’t require co-signers and offer co-signer release after 24 months to students who do use one.
• Visa-holders
• State of residence
• School enrollment status
• Co-signer
Top lenders generally lend to students in all states, to visa-holders and to students enrolled less than full time. These lenders also don’t require co-signers and offer co-signer release after 24 months to students who do use one.
For payment flexibility
We evaluate the following:
• Forbearance options
• Income-based repayment.
• Death and disability discharge
• Grace period
• In-school deferment
Lenders with the highest marks for payment flexibility generally offer hardship forbearance of 12 months or longer, at least four other forbearance or repayment options to help struggling borrowers and a grace period of longer than six months.
• Forbearance options
• Income-based repayment.
• Death and disability discharge
• Grace period
• In-school deferment
Lenders with the highest marks for payment flexibility generally offer hardship forbearance of 12 months or longer, at least four other forbearance or repayment options to help struggling borrowers and a grace period of longer than six months.
For customer support
We analyze:
• Access to a dedicated advisor
• Use of an in-house customer service team
• Live chat availability
• Complaints process
• Website and transparency
Top lenders generally have a defined complaint process and separate complaint department or ombudsman, live chat and in-house customer service.
• Access to a dedicated advisor
• Use of an in-house customer service team
• Live chat availability
• Complaints process
• Website and transparency
Top lenders generally have a defined complaint process and separate complaint department or ombudsman, live chat and in-house customer service.
Note on 5-star must-haves
In some cases, a lender may score high enough to receive a five-star rating but doesn’t meet one or more of the must-have criteria. They include:
• A soft credit check
• Current rates displayed on the lender’s website
• At least 12 months of forbearance
• No origination/loan fee
• Top lenders generally have a defined complaint process and separate complaint department or ombudsman, live chat and in-house customer service.
Half a star is deducted from lenders who meet the point requirement for five stars but don’t meet the must-have criteria.
• A soft credit check
• Current rates displayed on the lender’s website
• At least 12 months of forbearance
• No origination/loan fee
• Top lenders generally have a defined complaint process and separate complaint department or ombudsman, live chat and in-house customer service.
Half a star is deducted from lenders who meet the point requirement for five stars but don’t meet the must-have criteria.
