Q: What are personal student loans for college? Are personal student loans for college similar to federal student loans, and where can these loans be obtained?
A: Personal student loans for college are sometimes referred to as personal, private, or alternative student loans. Lending institutions (such as banks and credit unions) will offer different personal student loan products, under these different titles, however (in general) these are all credit based loans for college. Personal student loans are not the same as federal student loans for college. Federal student loans for college are need-based loans that should be obtained first, before applying for personal student loans. Federal student loans are not credit based, offer some of the best interest rates, and offer some of the best repayment terms (which is why students are urged to exhaust their federal student loan options before moving onto personal student loans). Federal student loans can be obtained at www.fafsa.gov.
Once a student has exhausted all of their federal financial aid (including federal student loans), scholarships and grants, a personal student loan can help bridge the gap from what money they have for college, to what money they need for college. A personal student loan (private student loan) can be obtained from a number of different lenders. Personal student loans are credit based, and every personal student loan is different. To find the best personal student loan, students should compare different loan products from different lenders.
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