Private student loan FAQ

How do private student loans work?

Students can use private student loans as a type of financial assistance to cover the cost of their education. Banks, credit unions, and online lenders all give these loans. You’ll need to apply for a loan directly with a lender and meet certain eligibility requirements to be approved. If you can’t meet the eligibility requirements alone, you’ll need to add a creditworthy cosigner who can.

The majority of lenders let you take out loans up to the full cost of attendance, less any other financial assistance you may receive. Your school will receive the funds to pay for tuition and other costs once your loan sum has been determined. Any money that is left over will be sent straight to you for use as you see fit. Which in-school payback plan you choose will determine when you begin making loan payments. Making full, interest-only, fixed, or deferred installments is one of your choices. You will begin making installments while you are still in school if you select full, interest-only, or fixed payments. If you wait to start paying until after you graduate, repayment won't start until the end of your grace time. After your grace period, you’ll start making full payments for the duration of your loan term, typically from five to 20 years.

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