Private student loan rates for 10-year fixed-rate loans are down for the third week in a row to 5.61% for the week ending June 6, from 5.78% the previous week, according to the latest rates. from the personal finance company Credible of those who have prequalified in their student loan marketplace with credit scores of 720 and above. Meanwhile, 5-year variable rate loans are up slightly to 3.67% from 3.45% the previous week. You can see the lowest rates you could qualify for here.
Private student loans are issued by private financial institutions such as banks and credit unions, unlike federal student loans, which are issued by the government. “I always recommend that students borrow federally first before looking to private student loans,” Mark Kantrowitz, student loan expert and founder of PrivateStudentsLoans.guru, told MarketWatch Picks recently. Indeed, for their part, federal loans have more favorable repayment terms, loan forgiveness options and other advantages, compared to private loans.
That said, if you’ve maxed out your federal student loans and still have debt, private student loans can help fill in the gaps in your funding. Plus, if you have great credit or have a co-signer with great credit, you’ll likely be able to take advantage of competitive interest rates, which can make them more affordable than government loans. So if you need a private loan, here are the key things to know.
Rates vary on private student loans, and lenders consider things like credit score and income to determine whether or not a borrower qualifies for a loan and at what rate. You can see the lowest rates you could qualify for here. Private student loans are generally more difficult to obtain than federal student loans. Here are four things to know before taking out a private student loan.
It is not uncommon for private student lenders to require payments to be made while the borrower is still in school, whereas federal student loans are generally not due until the borrower has graduated. Additionally, private student loans are sometimes subject to prepayment penalties, so check with your lender to make sure you know what to expect if you plan to make payments sooner than expected.
Prices correct at time of publication.
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