Private student loans are loans which aren’t guaranteed and approved by any government entity. Unlike federal student loans, private student loans are made by banks and other financial institutions using their own terms and qualifications. Like federal student loans, these loans are offered to undergraduate students, graduate students, and parents of students.
Private loans also feature the benefit of a 6-12 month grace period and often offer higher loan limits than federal loans, so a student has a better chance of all their expenses being covered. However, these benefits come at the cost of higher interest rate and loan fees as well as less forgiving terms than those of federal loans. These factors can very well make private loans a more costly option in the end.
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