What is the main benefit of privately issued student loans?
There are numerous advantages to borrowing privately-issued student loans as opposed to loans issued by the government.
The most notable benefit is the fact that private loans often are more affordable than loans from the government.
What are private student loans?
Privately-issued student loans are are not guaranteed with federal funds.
They are usually offered by credit unions, banks and various other private lenders.
What are the negatives of student loans that are privately issued?
There are some risks of loans for students that are issued by private companies that borrowers must take note of.
First, they often have more interest as compared to federal student loans. That could result in higher costs in the long run.
Furthermore private student loans are not eligible for repayment based on income and loan forgiveness programs.
This means that the borrower must repay the entire sum of the loan, even when they are in financial difficulty.