Private Student Loan

The cost of education continues to increase. After you first take advantage of Federal student loans, you may discover you still have significant unmet expenses you need to cover to pay for your education.

Private student loans may be a good option to help you fill the gap between what federal, state and school assistance provides and what you actually need in order to afford higher education. Private loans (sometimes called alternative student loans) are credit-based consumer loans to be used specifically for paying educational expenses.

Private loans, like auto or home loans, are based on your creditworthiness. Most students will need a creditworthy co-signer such as a parent or other relative in order to obtain a private loan. Terms and conditions applicable to these loans vary greatly.

Factors such as interest rate, Annual Percentage Rate (APR), length of repayment, loan minimum and maximum as well as fees should be carefully considered when researching and choosing a private loan.

One feature of many private loans is the ability to completely postpone (defer) repayment until you graduate from college. Also, private loans almost always offer lower interest rates than credit cards.

While we encourage students and families to pursue federal financial aid before considering private education loans, there are many student/family situations where a private loan is viewed as a preferred alternative. Sometimes parents want their student to be responsible for his/her education. In other cases, having the educational costs met means the student can focus on his or her studies instead of having to augment the costs with an off-campus job. Whatever your situation may be, know that a private loan is often an attractive and affordable option to help pay your education expenses. Just remember, borrow only what you need and compare your options before you borrow.