A loan is most commonly known as a type of debt.  Monetary loans are the most common types of loans.  A loan consists of a series of monthly transactions between a lender and a borrower.  The life of the loan depends on the amount of money borrowed and the time span of the loan itself to payback.  Sometimes if the loan is not successfully paid in a timely manner, the lender holds the authority to charge interest and enforce other restrictions.    

What is a Private Loan?

A private loan is generally directed towards student loans pertaining to financially aiding an individual for postsecondary education and higher.  They either act as supplementary to and/or completely replace loans like the Stafford, Perkins, and suite of PLUS Loans.  These loans are unsecured and may entail features such as deferment and forbearance options. 

Types of Private Loans

·        Stafford Loans

·        Perkins Loans

·        Parent/Graduate PLUS Loans

Private Loan Buying Aspects

• Interest Rates- During the life of the loan, lenders tend to collect interest at a fixed rate, while the individual is attending to their education, and up to and including six months after their graduation.
• Payment Plans- Payable instantly, interest-only loans while the individual is attending their program of study (pay per month), and non-interest loans where a student only pays after graduation.
• Incentives- Based on a student’s payback timeliness, a lender may enforce most eased terms and/or administer penalties.
• Start-Up Fees- A lender generally requires an immediate payable instilment upon opening up the loan, which in turn is put towards the principal of the loan.