What is the difference between a Stafford student loan and a Private student loan?

Which is better?

What is the difference between a Stafford student loan and a Private student loan?

Stafford students loans are federal loans while private student loans are not.

There are two types of Stafford loans: Direct and FFELP. Direct loans are when the money comes directly from the US Department of Education. FFELP loans on the other hand come from private lenders, but are federally guaranteed by the government (meaning that if you default on the loan, the lender is still guaranteed to be repaid by the federal government, therefore transferring your debt to the US Department of Education Debt Collections).

The hugest difference in federal Stafford loans and private loans is the interest rate and repayment terms. Stafford loans have an interest rate of 6.8% fixed over the life of the loan. Furthermore, if you have financial need and qualify for a subsidized loan, that interest will not accrue until you actually enter repayment (6 months after graduating or dropping to less than halftime enrollment). Also, because the loans are federally guaranteed to the lender, there is no credit check involved (therefore no co-signer required either). For many students wishing to take out private loans, a co-signer will be required because students either have limited credit/employment history and/or bad credit.

On private loans the interest rate is going to vary depending on the credit worthiness of the borrower/co-signer. Most applicants are highly likely to get an interest rate way above the 6.8% on federal Stafford loans (I've even seen them as high as 20%). Because of this, private loans should only be utilized if ABSOLUTELY NECESSARY! They are very costly and, if not paid according to the terms chosen by the lender, can ruin your credit.

Always use all the federal and state aid you can before resorting to private sources. The terms and conditions on federal loans are much more merciful than you are going to get from any private lender.

What is the difference between a Stafford student loan and a Private student loan?

There are two sources for student loans -- the federal government and private lenders. In order to obtain most federal student loans, you will first need to file the Free Application for Federal Student Aid (FAFSA). In most%26lt;!--instances the FAFSA is required for all federal financial aid including federal student loans. Deferment options are available while you are still attending school at least half-time. There are four main federal loan programs.

http://best-loans.awardspace.com/student...

Federal loan consolidation is for students who are in repayment status or parents who wish to extend the repayment period on their current PLUS and obtain a fixed interest rate for the life of the loan--%26gt;you can combine all of your eligible federal student loans into one loan with a Federal Consolidation Loan. Consolidating also locks the interest rate you pay on your loan.

What is the difference between a Stafford student loan and a Private student loan?

To me the basic most important info is Stafford is WAYYYYY cheaper in interest

What is the difference between a Stafford student loan and a Private student loan?

That really depends on what they private party is offering you.

Here is a blog that might help answer you question better than I can.

Good Luck!

Alicia