Best Student Loans
Private student loans can be a good option for students who have already exhausted their federal loan options. However, rates and fees can vary significantly from one lender to another. So it pays to compare lenders before choosing a private student loan. This guide will teach you how to compare student loans so you can find the best deal possible.
Common Questions
What are private student loans?
Private student loans are student loans issued by private lenders (rather than the federal government). To qualify, you’ll need to present a healthy credit score and steady income source — or, failing that, a creditworthy cosigner. When you take out a private student loan, the interest rates and terms you qualify for depend on your creditworthiness.
Why might you get a private student loan?
There are limits on how much you can borrow with federal student loans. If your tuition exceeds that limit, private student loans can make up the difference.
Also, federal student loans can be withdrawn if you fail to maintain a 2.0 cumulative GPA. Private student loans, on the other hand, are not reliant on academic success.
Alternatively, you might pursue a private student loan in order to consolidate several disparate pools of student debt. These “consolidation loans” can streamline a disorienting tangle of payments into a single easy monthly payment.
What are the eligibility requirements for private student loans?
The requirements of private student lenders vary widely. For example, you may need to be enrolled in an eligible school, or you may have to meet certain age, education, or citizenship requirements.
Also, unlike some federal loans, most private student loans require a credit check. So before you get excited about a lender, make sure that your credit meets their standards (or that you have a qualifying cosigner).
Do they charge application fees?
Application fees must be paid at the time the loan application is submitted. These fees are often non-refundable, even if your application is denied.
Not all lenders charge application fees, but many do. Be careful not to waste too much money paying for expensive application fees for loans you likely won’t qualify for. Instead, do your research and apply to lenders who accept applicants in your circumstances.