Borrowers should understand the importance of always making on-time payments. Borrower benefits are theirs to use or lose. Another important service feature is the ability to offer a single monthly billing statement that can combine payments owed under both federal and private loan programs. The borrower gets one monthly statement and mails back only one check. Default prevention expertise is a critical factor for schools to consider in selecting private loan programs.
Private loans can vary in the length of deferment and forbearance periods.
This is important, because many young people simply don't have a strong enough credit record to qualify on their own. Some lenders allow cosigners to be dropped from the loan after a specified period of on-time payments, provided the borrower is deemed sufficiently credit worthy. The terms of the loan may be different depending on how a student meets the lender's credit criteria. Credit-ready borrowers do not have to meet these criteria. The expected acceptance rate is also a key issue.