Private Student Loans
Private Student Loans differ from Federal student loan programs in several ways. College students can benefit from both sources of financial aid, however, it is important to know the differences between the two loan types to avoid confusion after completion of your education. Good advice is to always read any student loan applications in full before signing and accepting funds. Your student loan agreements will specify any available benefits, repayment terms and conditions. Don’t just take someone’s word for it, read the student loan agreement papers yourself which are there for this reason.
Private Student Loans
- No FASFA or Free Application for Federal Student Aid form is required.
- Loan proceeds can be sent directly to the student, instead of to the college.
- Covers all college education related expenses included previous school fees.
- Acceptable alternative when federal student loans are not enough.
- Interest rates and fees vary by lender and are impacted by your credit rating.
- No co-signer is necessary, but can be added if the student does not qualify
alone. - Payments may be deferred up to six months after graduation - terms vary by student loan lender.
- Interest rate discounts and rebates may be available - terms vary by lender.
Private Student Loans are often necessary to cover the rising cost of higher education. College students who need financial assistance in excess of the annual federal loan limits can turn to Private Student Loans. You can apply for a Chase Private Student Loan online at competitive interest rates. Chase is a national leader for funding private student loans and has provided billions of dollars of both federal and private student loans to undergraduate and graduate students alike.
Federal Student Loans
- FASFA application or Free Application for Federal Student Aid is required.
- Student loan interest can be federally subsidized or unsubsidized.
- Offer standardized options to postpone payments after graduation.
- Longer repayment terms are available for high student loan balances.
- Credit requirements are easier to meet, no co-signer is needed.
- Loan application must be certified and verified by the school.
- Funds can be used to pay most education related expenses.
- Some interest rate discounts and rebate programs may exist.
- Deferment and Forbearance of loan payments available under certain circumstances.
Federal student loans are currently the largest source of financing for college students. Federal student loan interest rates and repayment terms are generally more attractive when compared to Private Student Loans. One general college funding strategy is to maximize the use of Federal funds, then seek other sources of financial aid to fill in any funding gap.
Remember that all education loans have to be repaid, whether a Federal or Private Student Loan. College students should remember to be conservative and to borrow wisely. Do not borrow more money then you will need, and understand the burden that future monthly payments will place on your household finances. If you do not finish college, are not happy with your college education results, or are unable to find a job in your chosen field, your student loans still have to be paid.