4 Things You Need to Know About Private Student Loans

Many students rely on loans to help pay for college or graduate school, but not all loans are created equal. Private student loans are one option that can help you fund your education, but they come with some risks and benefits that you should understand before borrowing.

Lower Interest Rates Than Government Loans

Private student loans often offer lower interest rates than government loans, which can save you money in the long run. However, they also typically have fewer repayment options and less flexibility than federal loans.

Fewer Repayment Options

When you take out a private student loan, you may not have access to income-based repayment plans or generous forgiveness options. If you're unable to make your payments, you may be at higher risk of defaulting or going into delinquency.

Credit Checks Are Required

Finally, it's important to note that private student loans often require credit checks before approval. If you have a low credit score or no credit history, you may struggle to qualify for a private loan or be subject to higher interest rates and fees.