Private Student Loans
Private student loans — sometimes known as alternative loans — are options for students to pay for college when other sources of funding, like federal and state grants, scholarships, and Direct Stafford Loans are not available.
Borrowing for a student loan is a serious financial commitment. Be sure to exhaust all federal loan eligibility before borrowing a private student loan and consider the Federal PLUS Loan. Learn about the Federal PLUS Loan. Before taking out any student loan, federal or private, you need to understand loans, their benefits, and your responsibilities.
Once a student applies for the loan, the private lender’s approval is based on the borrower's ability to repay. Their interest rates vary based on the borrower’s application and credit profile and they may have different fees, repayment options, and borrower benefits.
If a private student loan is needed, student borrowers will secure better terms and pricing by adding a credit worthy co-signer to their application. Always check the interest rate, fees, interest capitalization policy, repayment period, prepayment penalties and other terms and conditions of the loan before you sign a promissory note.
Interest rates, loan limits, interest capitalization policy, repayment options and prepayment penalties can vary – sometimes considerably – depending on the financial institution underwriting the loan. When comparing loans, compare based on the total cost over the lifetime of the loan. Keep in mind that you may need to meet certain requirements to access lower interest rates, borrower benefits or promotions; such as signing up for automatic payments to get a reduced interest rate.
It's important to understand all the terms associated with a loan before you choose one.Learn more about smart borrowing.