Before you even consider private student loans, you should take advantage of all federal student loans, grants and scholarships.  To be certain that you have, you must submit your Application for Federal Student Aid (FAFSA), and the school will inform you on what you might qualify for.

If after taking advantage of the above mentioned financial aid, you still find yourself short the money you need for college, then a private student loan is you next best option.

The private student loans, while being more flexible, and somewhat easier to get than the federal student loans, they also charge higher interest rates. Unlike some federal student loans, with private loans your acceptance is not based on your financial needs as much as it is your credit scores. Because of the good credit requirements a student often needs a co-signer to qualify for a personal student loan.

Because these loans are from banks and credit unions and not guaranteed by the government, you will find the interest rates and fees charged will vary between lenders. Sadly like all loans the lenders play games with the numbers, like offering lower rates but with higher fees that make the loan payback higher overall.

You also need to take into consideration the term of the loan when figuring out the best loan for you, while a longer term has the lowest monthly payment, you will be paying much more interest over the life of the loan.

When shopping for private student loans, don’t be fooled by the advertised interest rates, that would be as good as the Federal Plus loans, these rates are only available to students with high credit scores.  Odds are most students in this phase of their life probably have little credit history and therefore will not qualify for these loans.

The sad part is these misleading published interest rates might stop the student from applying for the Federal loans until it’s too late and they miss a deadline.  That is why I can’t stress enough the point that the FAFSA should be the first application any student fills out for financial aid.

Because of the ever rising cost of college and the cutting of state and federal financial aid packages, it is likely that you will need to subsidize your loan package with some personal student loans.

The good thing is you can apply for these loans anytime of the year and only apply for the actual amount you need to make up any short fallings from other means of financing your education.

My suggestion is don’t borrow more than you actually need to get through the next semester or at most the next year.  In my opinion if you barrow more than what you really need to get through the next semester or year, you will spend it on something that is not 100% necessary.

You should always look for other cheaper ways of financing, before turning to a private loan.  Also there is no limit on the number of personal student loans you can have, and if payments are deferred until after graduation, you can always consolidate the loans, so that you are only making one payment.