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.
Be sure to exhaust all federal loan eligibility before borrowing a private student loan and consider the Federal PLUS Loan. Before taking out any student loan, federal or private, you need to understand loans, their benefits, and your responsibilities.
The private lender’s approval is based on the borrower's ability to repay.
Interest rates vary based on the borrower’s application and credit profile.
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.
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 the terms associated with a loan before you choose one.
