Private Student Loan Terms

In contrast with federal loans, whose terms are public and standardized, the terms for private loans vary from lender to lender. However, it is not easy to compare them, as some conditions may not be revealed until the student is presented with a contract (promissory note) to sign. A common suggestion is to shop around on all terms, not just respond to "rates as low as..." tactics that are sometimes little more than bait-and-switch. However, shopping around could damage your credit score. Examples of other borrower terms and benefits that vary by lender are deferments (amount of time after leaving school before payments start) and forbearances (a period when payments are temporarily stopped due to financial or other hardship). These policies are solely based on the contract between lender and borrower and not set by Department of Education policies.