# Private Education Loans

**Source**: https://college.harvard.edu/financial-aid/how-aid-works/types-aid/parent-loans/private-education-loans
**Parent**: https://college.harvard.edu/resources

## How To Choose a Private Loan Lender

All lenders are not alike. In addition to banks, some educational associations, state education agencies, and other organizations offer student and parent loans for school. Each of these lenders may offer special discounts or services to a student based on the state they live in, the credit rating of the applicant, or even their grade level.

It is important to research and choose the lender that is right for you. Don’t be afraid to ask questions and make sure you take the time to compare what each lender has to offer before making a decision.

As a general rule, students should only consider obtaining a private education loan if they have maxed out their Federal loan options. Parent borrowers should also compare costs with the Federal PLUS loan. The PLUS loan is a federal parent loan and usually has better repayment terms than most private loans.

The fees charged by some lenders can significantly increase the cost of the loan. A loan with a relatively low interest rate but high fees can ultimately cost more than a loan with a higher interest rate and no fees. A good rule of thumb is that 3% to 4% in fees is about the same as a 1% higher interest rate. Lenders rarely give complete details of the terms of the private student loan before the student submits an application, in part because this helps prevent comparisons based on cost.

## Thinking Ahead

- #### What Questions Should I Ask a Potential Lender?
- #### Where Can I Start?
- #### The Master Promissory Note
- #### Alternatives to Borrowing
- #### Questions/Contact Information

## Related Topics

[### Financial Literacy

Financial literacy: The more you know, and the more tools you have at your disposal, the better prepared you will be for life now and after Harvard.](https://college.harvard.edu/guides/financial-literacy)

[### Harvard Financial Aid Initiative

We are committed to ensuring all admitted students have the opportunity to attend Harvard, regardless of the economic obstacles they have encountered.](https://college.harvard.edu/admissions/explore-harvard/connect-students/harvard-financial-aid-initiative)

[### Guide to Debt Management

Loans are never required, but if you choose to take out loans, we want to help you "borrow smart". Here are some helpful tips on debt management.\](https://college.harvard.edu/guides/debt-management)