FAQS About Private Student Loans

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There are a lot of questions that come with student loans, and we aim to answer quite a few of them!

What are private student loans?

Private student loans are loans offered by banks and other private lending institutions to college students to help cover all or part of their college education costs.

Sallie Mae logo.

3 Repayment Options

Variable rates from 1.87% - 11.97% APR with auto-debit

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How are private student loans different from federal student loans?

Private student loans are funded by private financial institutions, while federal student loans are funded by the federal government. That’s not the only difference though. Both of these loan types differ widely in terms of interest rates, eligibility criteria, and repayment terms and conditions.

Which is a better option for students—federal loans or private loans?

Federal loans are hands down the better option for students. They offer much lower rates of interest along with several other benefits, including more flexible repayment plans and forgiveness options. You should only consider taking a private student loan after exhausting all other resources such as scholarships, grants, and federal student loans.

Do I have to file the FAFSA to apply for a private student loan?

No, the FAFSA is a pre-requisite only for federal student loans. However, students and families should file the FAFSA and accept federal aid before turning to private loans.

How do I apply for a private student loan?

A private student loan works like any other loan. You have to make inquiries with different lenders and compare their quotes. When you find one that offers the best rates and terms that work for you, complete the application form and submit it. The lender will then review your application and approve of it if you meet all the requirements.

What are the qualifying criteria for private student loans?

Criteria varies from one lender to another. In general, good credit history will boost your chances of getting a loan with most private lenders. It will also help you get a lower rate of interest.

What can I do to get a loan if I have a thin or non-existent credit history?

Most college students would not yet have had the opportunity to build their credit history. In this case, you will only get approved if you have a cosigner. Having a cosigner can also help you get a higher loan limit and a lower rate of interest.

Can anyone be a cosigner for my private student loan?

A cosigner can be a parent, relative, guardian, spouse, or even a friend. Only someone who has a good credit history will be approved as a cosigner.

What are a cosigner’s responsibilities?

A cosigner is responsible for paying your outstanding dues should you default on your loan. Their responsibility ends only when the loan is fully paid up.

Can I apply for private student loans any time of the year?

Yes, private lenders accept and process applications for student loans throughout the year. However, most people apply to loans during the summer.

How long will it take for me to receive the funds?

The exact amount of time it takes to process a private loan and disburse the funds depends on the lender and also the time of the year. The start of the academic year is peak time for processing loans so you can expect it to take more time. In general, you can expect to receive the funds anywhere between 2 weeks to 2 months from the date you submit your application.

What is the typical interest rate on private student loans?

There is no typical interest rate for all private student loans across the board. You will have to get in touch with each lender to find out their rate of interest and other policies regarding the loan amount, administration fees and repayment terms. College Raptor can help with that! With our free Student Loan Finder, you can compare lenders and interest rates side by side.

When does the interest start accruing on my private student loans?

Interest on private student loans starts accruing from the date that you receive the funds.

When do I have start paying back my private student loan?

Most private lenders give students a six month grace period after they graduate. This means you will have to start making your monthly payments six months after your graduation date. The repayment term on private student loans depends on the amount borrowed and the lender’s policies. It could be anywhere between 5 to 25 years.

What happens if I do not make the payments on time?

Late or missed payments on your private student loans can damage your credit score as well as that of your cosigner.

Can I use my private student loans to improve my credit score?

The only way to improve your credit score with your private student loans is by making all of your payments on time.

Are there any forgiveness options for private student loans?

No, loan forgiveness programs are only associated with federal student loans.

Where can I find the details of my private student loans and how much I owe?

Your credit report will have all of your private student loan details, including how much you owe.

Have any other student loan questions? Ask below and we’ll find you the answer!

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Lender Rates (APR) Eligibility
Sallie Mae logo.
1.87% - 11.97% Variable
3.75% - 12.85% Fixed
Undergraduate and Graduate
VISIT SALLIE MAE
Credibe company logo.
1.19% - 11.98% Variable
3.20% - 12.99% Fixed
Undergraduate and Graduate
VISIT CREDIBLE
Lendkey company logo.
Undergraduate and Graduate
VISIT LENDKEY
Ascent company logo.
1.78% - 9.37% Variable
5.17% - 13.21% Fixed
Undergraduate and Graduate
VISIT ASCENT
College Ave company logo.
0.94% - 12.99% Variable
3.22% - 13.95% Fixed
Undergraduate and Graduate
VISIT COLLEGE AVE
2.93% - 5.67% Variable
4.35% - 7.15% Fixed
Undergraduate and Graduate
VISIT ISL
Earnest company logo.
0.99% - 11.44% Variable
2.94% - 12.78% Fixed
Undergraduate and Graduate
VISIT EARNEST
1.30% - 11.52% Variable
3.20% - 11.99% Fixed
Undergraduate and Graduate
VISIT ELFi
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.

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