Private Student Loan Information

Private student loans are intended to help supplement federal student loans (link this to the federal student loans page). However, for many people, federal student loans are not enough to cover college expenses. If this is the case you're in, then private student loans might be a good option for you. Remember, always borrow federal student loans first before borrowing private student loans because federal loans generally have better rates and lower overall cost. Also, you should only borrow what you absolutely need and not a dollar more. Private loans are usually available to cover the cost of attendance at your school minus any financial aid you receive.

Things to keep in mind when borrowing private student loans:

  1. Private student loans often have higher borrowing limits than Stafford loans (but be careful not to over borrow!)
  2. Private student loans are usually in the student's name and it's best to borrow with a qualified co-signer like a parent or other relative.
  3. A credit check is required for private student loans.
  4. Usually private student loan payments can be deferred (postponed) while you are enrolled in school, but ask your lender to explain all their private loan options to you. Some lenders offer loans that you can begin to repay during school. If this option works for you it can save you a lot of money over the course of the loan.
  5. Private student loans usually have interest rates that are higher than Stafford Loans.

When you are ready to apply for a private student loans be sure to:

  1. Compare interest rates, fees and terms between the various private student loans.
  2. Look carefully at the Annual Percentage Rate (APR). The APR includes all the costs associated with the loan while interest rates usually don't.
  3. Compare the total cost of each private student loan you are considering.
  4. Applying with a cosigner with good credit can greatly increase your chances of being approved for a private student loan.

Once you apply the review and approval process varies by lender and by time of the year. If you wait until the last minute and apply right before the start of the Spring or Fall semester expect to wait longer for a decision since lenders will be swamped with applicants who also waited too long. So the best advice is to apply early.