Private Student Loans
Private student loans are loans you can get from banks, credit unions, or online lenders not from the federal government. Students and parents can use private loans to help cover the cost of college or career school when other financial aid isn’t enough.
Private loans usually have higher interest rates than federal loans, and repayment rules can vary depending on the lender.
How to Apply
To apply for a private student loan:
First, compare different lenders to find the best deal.
You usually need a good credit score or a cosigner (like a parent) to qualify.
Fill out the lender’s online application, which asks for personal, financial, and school information.
Once approved, you’ll need to sign an agreement promising to repay the loan.
Helpful Comparison Sites:
Credible: Compare Student Loans
NerdWallet: Best Private Student Loans
Types of Private Student Loan Programs
Private loans can vary a lot depending on the lender, but here are the common types:
Undergraduate Loans
For students working toward a college degree.
May offer options for fixed or variable interest rates.Graduate Loans
For students pursuing master’s, law, or medical degrees.
Usually higher loan amounts available than for undergraduates.Parent Loans
For parents who want to borrow money to help their child pay for school.Career Training Loans
For students attending non-traditional programs like trade schools or certificate programs.
Interest Rates
Fixed Rates: Stay the same for the life of the loan.
Variable Rates: Can change (go up or down) over time based on the market.
Note: As of 2025, private student loan rates usually range from about 5% to 17%, depending on your credit, your cosigner’s credit, and the lender. (Always double-check with the lender before applying!)
Repayment Options
Each lender sets its own repayment rules. Here are common choices:
Immediate Repayment
Start paying back the loan right away (while still in school).Interest-Only Payments
Pay just the interest while you’re in school, and full payments after you graduate.Deferred Repayment
Wait until after graduation (usually 6 months) to start making payments.
Warning: Interest still builds up even if you aren’t making payments during school.
Refinance Options
After you graduate, you might be able to combine and lower the interest rate on your private loans through refinancing.
Learn More About Refinancing:Student Loan Refinancing Guide - SoFi
Helpful Resources
Quick Tips
Start Early: Begin learning about colleges, careers, and financial aid by 9th or 10th grade.
Apply for Financial Aid Every Year: Fill out the FAFSA® form as soon as it opens (usually in October).
Borrow Only What You Need: Try to only borrow what’s necessary. Remember, you have to pay back loans with interest.
Look for Free Money: Apply for scholarships and grants first. These don’t have to be repaid!
Ask for Help: Talk to your school counselor, teachers, or financial aid office if you have questions.