What is a private student loan?
Unlike federal student loans, private loans come from multiple sources, and have multiple options for repayment length, repayment type (fixed, variable), deferment, and interest rates. Use our student loan comparison tool to compare your options.
Who is eligible for a private student loan?
Often private loans require you to have an established and decent credit score to be eligible. Most students straight out of high school have yet to establish credit and therefore will require a co-signer. A co-signer is someone with good credit standing who agrees to be your guarantor or be financially liable for you during the life of your loan.
How does the money get disbursed?
Generally speaking, loans are disbursed directly to the school and used to pay education-related expenses. This means that the loan will cover your tuition and fees and then, if there is any money left over, it will be disbursed to you to cover any other outstanding educational expenses.
Why take a private student loans?
Private student loans typically let you borrow more money than federal loans, and offer a variety of interest rates, fees and other borrower terms. Some are variable-rate loans linked to market conditions, while other are fixed-rate.
What happens once I'm approved?
Once you have been approved, the lender will send you a letter detailing the terms and conditions of your loan. The money is not disbursed until you accept these terms and sign a promissory note that details your rights and responsibilities as a borrower.
What do student loans cover?
Typically student loans can cover the cost of attendance: tuition, fees, books, supplies, room, and board. Student loans are not designed to pay for things that aren’t essential to the school experience. But private loans might be used to cover expenses such as computer supplies, internet services, parking fees, etc.