| A private student loan is an option for students who | | | | elements make a private student loan a legal |
| prefer not to borrow money from the government | | | | obligation, a valid contract, if you will. Both borrower |
| or from Sallie Mae, or who have not been fortunate | | | | and lender therefore are bound by a legal document |
| in obtaining grants and scholarships from both private | | | | that cannot be breached, unless for a very justified |
| and public foundations. The interest rates could be | | | | reason. |
| slightly higher than say a federal Stafford loan or a | | | | If you compare the interest rate of your private |
| Perkins loan, but if the student, or his parents, has a | | | | student loan with that of the interest rate of your |
| good relationship with a private lender, the rates and | | | | classmate's federal government student loan, you |
| terms could be negotiated...and often in a friendly | | | | may notice that his rate is lower. This should not |
| manner. | | | | come as a surprise. The US government has a |
| A private student loan is sometimes called an | | | | student loan program that gives all US citizens a right |
| alternative student loan and could be any type of | | | | to an education. And to make that right an |
| loan, provided it was not obtained from a | | | | affordable right and accessible to all, the rates on |
| government source. Given this distinguishing | | | | government student loans are usually much lower |
| characteristic therefore, a private student loan could | | | | than a commercial loan - a Wells Fargo loan as an |
| be a private loan for a student with bad credit, a no | | | | example. |
| credit check student loan ("that's okay, we have | | | | Some private lenders advertise their private student |
| your parents' signature card on file"), or a graduate | | | | loan programs in such a way that the student does |
| student loan - for students wanting to pursue a | | | | not have to feel cornered about applying for a |
| master's degree. | | | | private student loan - lenders say there are no |
| Whatever form of private student loan you apply | | | | application fees, no application deadlines, the loan |
| for, remember that a loan is a loan, no matter what | | | | amount can be paid after graduation, and that the |
| it is called. This presupposes a commitment on the | | | | funds are sent directly to the student's account and |
| part of the lender to make available a definite | | | | not to the school. The approval for a private student |
| amount of money to be placed at the lender's | | | | loan will be given in just a couple of hours or 24 |
| disposal; and by the same token, it presupposes a | | | | hours, according to some lenders. |
| commitment on the part of the borrower to pay the | | | | Before you sign on the dotted line for your private |
| loan back. The payment terms and schedule are | | | | student loan, make sure you scrutinize the loan |
| usually outlined in the loan agreement. These | | | | agreement. |