Private Student Loan Overview

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Private Loan Benefits:

  • Borrow up to the true cost of your education
  • Fast eSignature process

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Private student loan programs are a great college financing option that can help cover additional costs not covered by federal financial aid. A private student loan can be used to pay for normal tuition expenses, but can also cover books, supplies, housing expenses, school fees, transportation, and more.

Private Student Loan Features

Private loans offer a great deal of flexibility for borrowers. Students can choose from a variety of lenders, incentives, and even repayment plans. Here is an overview of what private loans can offer:

  • Choice of interest rate type
  • Potential interest rate discounts for things like making on-time payments and graduating
  • Easy online application and account management
  • Funding to cover up to 100% of college costs
  • Available year-round

Learn more about the benefits of a private student loan.

Private Student Loans and Credit

All private student loans require a credit check for the primary borrower. Generally, a cosigner is required on the application. Adding a credit worthy cosigner will help increase the chances for approval, and could lower the interest rate on the loan. Private student loan interest rates are variable and based on the Prime or LIBOR index plus a margin for borrower credit.

Private vs. Federal Loans

The chart below illustrates the primary similarities and differences between federal and private student loans. We always recommend that borrowers exhaust their federal aid before taking out a private loan.

Private Student Loans Federal
FAFSA required In some cases Yes
Yearly Borrowing Amounts Up to the cost of education Capped by grade level and status of the student
Interest rate Prime or LIBOR plus or minus a margin, based on credit evaluation Stafford Loans - Fixed at 6.8% (3.4% for subsidized undergraduate borrowers)
PLUS Loans - Fixed at 7.9%
Disbursement Check sent directly to your school Check sent directly to your school
Deferment No payments until after graduation No payments until after graduation
Able to Consolidate Yes Yes
Apply for certified private student loans
apply for a stafford loan

Want to learn more? Compare private loans to Stafford or PLUS loans.

Private Student Loans Fill the Gap
Financial Aid Breakdown

We always recommend that borrowers maximize their federal aid first. However, in most cases there is a substantial amount of unmet financial need even after federal aid is exhausted. Private student loans are a smart way to help fill that gap and pay for the full cost of an education.

Private student loans have great benefits:

  • Up to 100% of your cost of attendance minus other aid
  • No payments until after graduation

For more information about private student loans, check out our private student loans frequently asked questions page, or get started and apply for a private student loan.

Learn more about the hidden costs of college and how to fill the gap in your financial aid package.