| The First thing that needs clarification is the concept: | | | | Not all student loans are paid after graduation. This is |
| Private implies that non governmental institution is | | | | a common mistake that most applicants make when |
| implied in the financial transaction. This excludes loans | | | | searching for finance. If you are seeking finance to |
| granted by private institutions where the government | | | | be paid off only after graduation you need to state |
| subsidizes the interest rate but it doesn't exclude | | | | so clearly when requesting loan quotes because there |
| loans granted by private institutions where a private | | | | are many different repayment programs and the |
| non-profit organization subsidizes the interest rate. | | | | lender won't offer you these options right away. |
| And most importantly, the word "student" in student | | | | Also, you should know that those loans which have |
| loans implies that the money will be used to pay for | | | | the first installment due right away tend to be more |
| college or other studying stage and nothing else. | | | | advantageous than those paid only after graduation. |
| Misconception: Subsidized-Unsubsidized | | | | Thus, if you can afford them with a part time job or |
| There is a misconception as regards to the | | | | with the financial aid of relatives, you should consider |
| characteristics of private student loans. Most people | | | | applying for this kind of loan. You'll save thousands of |
| think that all student loans (both federal and private) | | | | dollars on interests this way and will become |
| are subsidized. That is a mistaken belief, though | | | | debt-free sooner too. |
| federal loans for students carry subsidized interest | | | | Nature Of The Private Student Loan Agreement |
| rates, private student loans do not necessarily do. | | | | A private student loan agreement is nothing but a |
| And those private student loans that feature | | | | contract. Even federal student loans are contracts |
| subsidized rates are awarded either according to the | | | | but the regulations alter the negotiation phase. |
| needs or the merit of the applicant. | | | | However, with private student loans there are no |
| Thus, if you don't qualify for a federal student loan | | | | alterations. The loan terms are negotiated between |
| or you need additional funds and you don't meet the | | | | the lender and the borrower and the obligations that |
| requirements to qualify for private subsidized student | | | | emerge from the contract must be fulfilled or you |
| loans, you'll have to resort to regular private student | | | | may be liable. Thus, don't forget to always read |
| loans that carry higher interest rates and less | | | | thoroughly (and specially the fine print) any private |
| advantageous terms like the above mentioned | | | | student loan agreement that is presented to you |
| federal student loans and private subsidized student | | | | before signing. You'll save yourself a lot of money, |
| loans. | | | | time and hassles that way. |
| Misconception: Paid After Graduation Or Not | | | | |