What's a Private Student Loan?

One reason a private student loan is different from a federal student loan is that federal student
loans are given through the government and private student loans are given through banks, credit
unions or other money lenders. The rates for a private student loan can vary and it depends on
your credit reputation, and the lender. Unlike a federal student loan where you can only use it for
school tuition, private student loans can be used for housing, textbooks etc. To get a private
student loan, you are not judged based on your financial status like other loans, but, you are
judged on your ability to pay, and your credit reputation.

Requirements for a Private Student Loan

If you are an employee or have a good credit status and are a US citizen or permanent resident
you do not need a co-signer to get your private student loan. To apply for one you must fill out
an application at any loan lender.

Repayment Time

The amount of time to pay the loan back depends on the amount borrowed. For most lenders the
maximum amount of payback time is 20 years.

Summary of Benefits Of a private student loan

One benefit of a private student loan is that it covers all of the education costs and not just the
school's tuition. The interest fees on a private student loan may be tax deductible. There aren't
any deadlines for the applications and there is no fee for the application. Also the money from a
loan is sent directly to you and not your school which allows you to control the spending of the
loan. Also, some lenders allow you to not have to make payments on the loan until after you
graduate from school.