What is the difference between federal and private loans?

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Federal student loans are provided by the federal government, while private student loans come from private financial institutions, like banks and credit unions.

A key difference is that federal student loans are more accessible. You can receive a federal student loan without a cosigner or credit history. Furthermore, there are generally beneficial repayment options with federal loans that may not be available with certain private student loans. However, there are borrowing limits on federal student loans, and students may have to supplement them with other funding options.

A private student loan serves as a way for you to fill the funding gap between the cost of attending school and the amount in federal loans, grants, and scholarships available to you. Private student loans are credit-based loans, so you may need to demonstrate an established credit history or have a cosigner with an established credit history in order to qualify. To learn more about the differences between private student loans and federal student loans, visit our blog.



Please note that the information provided on this website is provided on a general basis and may not apply to your own specific individual needs, goals, financial position, experience, etc. LendKey does not guarantee that the information provided on any third-party website that LendKey offers a hyperlink to is up-to-date and accurate at the time you access it, and LendKey does not guarantee that information provided on such external websites (and this website) is best-suited for your particular circumstances. Therefore, you may want to consult with an expert (financial adviser, school financial aid office, etc.) before making financial decisions that may be discussed on this website.