Okay, I am sooo confused.. stafford vs. private loans?

Question

I was told I'm approved for the full amount of the stafford loans, but now I am having to choose a lender (between, Bank of America, Citi, Wells Fargo, Sallie Mae etc.) I don't understand, don't those banking institutions provide private loans???... I am so confused!!! Help!

Answer 1

i would stay away from private loans.. they can raise their rates when ever.  plus if you ever had to file bankruptcy, those loans don't go away

Answer 2

Yes, you will still have to choose a lender for your Stafford loan.  Just close your eyes and pick one.... and stick with that one for the remainder of your federal loans.  Stafford loans are federally regulated and one is exactly the same as the other.. same interest, same terms, same everything.  Your loans will be sold upon your graduation anyway (to Sallie Mae) so you'll never actually deal with that bank anyway.

Answer 3

I think the main difference between a stafford loan and a private loan is the interest rate - stafford loans have a fixed rate that can never go up, private loans' interest rates can fluxuate, so pay attention to the paperwork you're signing.  And go talk to a fin.aid officer at any college.  They can walk you through the entire loan process and answer any quesions you have.  Good Luck!

Answer 4

Most of the lenders you have listed provide both private and stafford loans.  As a student who has had the loans, the major difference between these is the time period in which you have to repay the loans and the requirements for the loans.  Private loans look at credit, collateral, etc and expect you to begin paying asap.  Usually with the stafford loans the interest rate is lower, payback is delayed until after graduation (or later), and they are really not concerned with whether you have any credit established.

All my loans were through Sallie Mae and the company works well with me and repayment options (as far as amounts, time frames, etc).