Signature Student Loans vs. Federal Loans

Both signature student loans and federal loans can provide you with money when you need it for college. These loans have some similarities but they also have a few key differences. Here are the basics of signature student loans and federal loans.

Credit Requirements

One of the biggest differences between these two types of student loans is in the credit requirements. With a federal loan, you do not have to have any credit in order to get access to this type of loan. As long as you are a United States citizen and you do not have any outstanding federal debts, you should be able to get the loan. With a signature student loan, the lender is going to take a look at your credit report. You have to have a certain credit score in order to qualify. Because of this, many people end up having one of their parents cosign the loan.

Interest Rates

Another difference between these two types of loans is in the interest rates that come with them. Typically, federal loans are going to have lower interest rates attached to them than signature student loans. Because of this fact, most people use signature student loans as a supplement to their federal loans.

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