Private Student Loan

What are Private Student Loans?

Private student loans are nonfederal loans made by lenders such as banks, credit unions, state agencies, or schools. They help fill the gap between the financial aid you receive and the actual cost of attending school.

With private student loans, you’re not required to complete the FAFSA but must apply directly with each lender. The private lenders set the conditions, terms, rates, and approval process. 

Types of private student loans

Student Loan (In-School)

If you’re currently enrolled, a private loan can help cover the cost of attending school.

These in-school private loans are available for students pursuing:

  • Undergraduate
  • Graduate
  • Law
  • MBA
  • Health Professions

Student Loan Refinance

Private lenders offer borrowers the opportunity to refinance a single student loan or multiple loans to simplify repayment and potentially get a lower interest rate and shorter term. Refinancing is available on both federal and private loans. However, federal student loans included in a student loan refinancing may remove the federal benefits associated with those loans. Learn more about student loan refinancing.

Want to know more? Read the Ultimate Guide to Private Student Loans

Private Student Loan FAQs

When do I pay back private student loans?

Paying back your private loans depends on the terms you’ve signed into. Make sure you read the agreement and clarify the starting date for repayments. Many private lenders allow you to defer payments while in school, but others require in-school repayments, too.

Do private loans offer a deferment period after graduating from school?

Some private lenders do offer a grace period similar to federal student loans. The specific terms and length may vary based on your loan agreement. Review and ask. I always find it helpful to highlight key areas of loan agreements.

It may be necessary to delay repaying private loans until after graduation, but if you can get a head start, I suggest tackling the debt sooner than later. You want to avoid as much accrued interest on your loans that will balloon your balance.

Do private student loans offer deferment?

Deferment is often associated with federal student loans but many lenders have begun offering borrowers that benefit as well. In order to qualify, you’ll need to meet the private lender’s criteria, and interest will often continue to accrue during this period.

What happens if I go back to school?

Some private lenders may offer an in-school deferment of loan payments while in school. Check with your lender.

Where can I apply to find the best private student loans easily?

Use a private student loan marketplace that helps you find, filter, and apply for student loans with multiple lenders with one application. These marketplaces typically allow you to check your rate without impacting your credit score and receive offers. You’ll only continue the process once you’ve been offered loan options. After selecting a lender, you finalize an application with that lender, get a hard inquiry on your credit, and submit your documents.