Applying for a Private Student Loan

Private student loans allow individuals to borrow money to fund their educations from private lenders rather than the federal government. In many cases, students opt to apply for private student loans after already borrowing the maximum amount allowed under the federal student loan program. These loans can help supplement federal loans to aid students in paying for college and education-related expenses.

Private Loans Require a Credit Check

Unlike the federal government, private student loan lenders require applicants to undergo a credit check before determining a student’s eligibility for funds. The credit check also helps the lender evaluate the interest rate an applicant qualifies for. A young college student may have difficulty qualifying for a private student loan on his own due to having a limited credit history. In this case, the individual may opt to add a cosigner to his loan to help him qualify.

Private Student Loans May Have Limited Benefits

Students applying for private student loans should remember that these loan programs don’t always offer the same features and benefits that federal student loans do. Should a student have difficulty repaying his loan, requesting a deferment or forbearance may not be an option with a private lender. In addition, a private student loan lender can request that a borrower begin repaying his student loan immediately rather than after graduation.


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