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Both borrower and lender therefore are bound by a legal document that cannot be breached, unless for a very justified reason. Whatever form of private student loan you apply for, remember that a loan is a loan, no matter what it is called. Subsidized student loans do not have harsh credit or income requirements because they are mainly awarded according to the needs of the applicant while those student loans that are not subsidized require you to meet some basic credit and income requirements. There are however subsidized student loans that feature lower rates even though they are private loans. Those who are particularly in need or underprivileged have more chances of getting approved. The payment terms and schedule are usually outlined in the loan agreement. Since federal funding requires the family to contribute with a percentage of the college costs, federal student loans don't provide all the funds needed for financing college studies. There are few private student loan lenders that offer loans payable after graduation. Thus, if you need that kind of loans, you have to resort to government financing. However, if you've had a bankruptcy in the past or too many delinquencies on your credit history, you will need to apply with a co-signer with a good credit history. The interest rates could be slightly higher than say a federal Stafford loan or a Perkins loan, but if the student, or his parents, has a good relationship with a private lender, the rates and terms could be negotiated...and often in a friendly manner. Other people can also obtain financing through these loans but the government will only finance part of the college costs.

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