LOCK IN YOUR LOW RATE!

Consolidate your student loans with industry leading borrower benefits.

Rates as low as 1.5%

Loan terms up to 30 years depending on balance.

No pre-payment penalties for early payment.

Apply today and stop giving your money away.

The Role Of The Private Student Loan

Many people choose to take out a private student loan to pay for college, especially when they have exhausted all of their options for Federal Stafford Loans. Private lenders offer these student loans, which are unsecured, with a variety of repayment options. A private loan might have forbearance and deferral options, for example, or it may have different options for monthly payment amounts and repayment periods. Unlike Stafford student loans, the interest rate for these student loans is determined by the financial institution, and not the government.

Private student loan interest rates will be determined by the perceived risk of the specific borrower, based on their credit history. Lenders do not want to encourage delinquency or default of the loans, after all, so they charge higher interest rates to borrowers that they perceive to be at a higher risk of doing so. A student may not take out private student loan accounts in excess of the cost of attending college, less any scholarships, fellowships, federal loans and other student loans.

Lenders may also accrue different interest rates while in school than after graduation, and there are private student loans that are payable immediately, interest-only while the student is enrolled, and no-payment until graduation. The total cost of a private student loan, however, should always be listed in the Truth in Lending statement that is issued when the loan is originated. These loans can be very helpful for people who can't pay for college otherwise, as long as borrowers are responsible with their financial decisions.

Back To Articles