• Career
  • Financial Aid
    • Sponsorship
  • Scholarships
    • By Continent
      • Scholarships in Africa
      • Scholarships in Asia
      • Scholarships in Europe
      • Scholarships in North America
      • Scholarships in Oceania
      • Scholarships in South America
    • By Country
      • United Kingdom
      • Australia
      • Belgium
      • Canada
      • France
      • United States
      • Spain
      • Switzerland
      • Nigeria
      • Netherlands
      • Germany
      • Italy
    • By Level
      • Masters Scholarships
      • Bachelor’s Scholarships
      • Undergraduate Scholarships
      • PhD Scholarships
  • Study Abroad
  • Find A Job
  • Contact Us for Adverts
Facebook Twitter Instagram
AstrolakejobAstrolakejob
  • Career
  • Financial Aid
    • Sponsorship
  • Scholarships
    • By Continent
      • Scholarships in Africa
      • Scholarships in Asia
      • Scholarships in Europe
      • Scholarships in North America
      • Scholarships in Oceania
      • Scholarships in South America
    • By Country
      • United Kingdom
      • Australia
      • Belgium
      • Canada
      • France
      • United States
      • Spain
      • Switzerland
      • Nigeria
      • Netherlands
      • Germany
      • Italy
    • By Level
      • Masters Scholarships
      • Bachelor’s Scholarships
      • Undergraduate Scholarships
      • PhD Scholarships
  • Study Abroad
  • Find A Job
  • Contact Us for Adverts
AstrolakejobAstrolakejob
Financial Aid

Federal Student Loan Vs Private Student Loan

4 Mins Read
Advertisement

Every student studying home or Abroad needs enough financial support to complete there studies or courses.

As an international student looking to study in countries like Canada, Germany, the UK, the US, etc. you are expected to show evidence that proves you are capable of taking care of yourself financially throughout your program or at least for the first year. But what happens when you can no longer pay for your education?

Advertisement

Governments of so many countries who value education and the contribution it brings, provide loans for undergraduates, graduates and professional students.

Some private organizations such as banks and other approved financial institutions also provide loans for students with each having their rules guiding them.

Loans provided by the government is called Federal Student Loans and those provided by a private organization is called a Private Student Loan.

Advertisement

Difference between Federal Student Loan and Private Student Loan

Like we stated earlier, private loans are provided by private organizations and lenders, and Federal Loans are made available to students by the state, provincial or federal government.

See also  list of the 8 easiest nations to immigrate to
Difference between Federal Student Loan and Private Student Loan
Difference between Federal Student Loan and Private Student Loan

They both aim to help provide students with financial aids for educational purposes. However, there are lots of differences between them, based on the interest rate, repayment plan, loan limit, tax benefits, flexibility and more.

To better understand each loan option, see more on Private Student Loan here, or Federal Student Loan Here.

Advertisement

Difference Table

Difference Federal Student Loan Private Student Loan
Interest Rate The Interest Rate for a Federal student loan is considerably low, and the interest rate is also fixed. The Interest rate of private loans is not fixed and they are higher than the federal loans. The interest rate is also dependent on the private lender.
Loan Limits The amount available for loan is usually lower than that of the private loans Some private lenders permit students to borrow as much as $100,000 if your credit level qualifies you.
Subsidized Loan Federal loans are subsidized, which means while you are in school, the government cover for the interest on the loan you collect. The loans are not subsidized, and students are to pay the full interest rate, depending on the amount received.
Repayment Plan Students are allowed to complete their studies and finish school before repaying the debt. You are also allowed to pay from your monthly salary. Some of the private lenders may allow students to push back their payment date until after graduation, but many don’t allow it.
Credit Check A credit check is not required to obtain a federal student loan This is one of the important requirements for private loans. You must have a certain credit level or a co-signer.
Financial Need Made available for students who show financial need. Students do not need to show financial needs
FAFSA requirement You are required to apply by completing the Free Application for Federal Student Aid (FAFSA). No FAFSA required
See also  Top 10 On-Campus Jobs That Should Set You up

 

Loan Amount For Each

The Private Student Loan has a bigger loan limit that lets you take any amount you need; provide you have a co-signer or a good credit record.

Federal and Private Student Loans

Undergraduates (subsidized) Subsidized ($) Overall Limit ($)
First Year 3,500 9,500
Second Year 4,500 10,500
Third Year and Above 5,500 12,500
Total 23,000 57,500
See also  The American Association of University Women (AAUW)

Graduate and Professional students can borrow up to $40,500 yearly. Private Loans can permit you to borrow as much $300,000 if your credit record matches that amount or you have a co-signer.

Advertisement

How To Repay A Federal Student Loan or A Private Student Loan?

Advertisement

The simplest way of repaying your loans is getting a job after or before graduation, and then pay some percentage every month. This is known as the Income-based repayment plan which can take as long as 10 to 15 years for the loans to be completely cleared. Find out the best ways to repay your student loans here.

Join Our Telegram Discussion Channel

Sign Up for Free! To Get Notification When We Post New Opprtunities

* indicates required

Federal Student Loan Private Student Loan Student Loan study Abroad Subsidized Loan
Previous Article3 Best Ways To Finance Your Graduate Education
Next Article How to Get Federal Student Loan Studying Abroad

Related Posts

USA Charity Work Visa for Immigrants | Learn How to Apply

6 Mins Read

Canada Charity Work Visa | How to Apply| You Can Move With Your Family 

5 Mins Read

How to Find a Sponsor in the U.K. 

6 Mins Read
0 0 votes
Article Rating
2 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
trackback
How to Fund Your Education in the United States of America - Gettoguide
2 years ago

[…] However, private loans do not limit the amount of money you can take as opposed to federal loans. You can find out more similarities and differences between a Federal Student Loan and A Private Student Loan. […]

0
trackback
Study Abroad: 7 Ways To Get Financial Aid To Fund Your Study Abroad - CANADA
1 year ago

[…] a government loan is quite different from a private loan in so many ways. See the difference, and find out how to apply for […]

0

Type above and press Enter to search. Press Esc to cancel.

sponsored
wpDiscuz