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Welcome to Knowledge for College brought to you by Chase, and thanks for joining us. This series of videos provides valuable information on the many important steps of going to college and financing an education.

Hi, I’m Chelsea Richardson. Did you know that private student loans may help you supplement your college funds? Here’s Ken Butler to tell us how.

Sometimes, there just doesn’t seem to be enough money for college. Even with federal student loans, savings, scholarships and grants—there’s often a balance that still must be paid to the school.

But "‘How?" you might be wondering.

This is where private student loans can help.

But just what are private student loans?

Private student loans (or alternative loans as they’re sometimes called) are basically consumer loans that are used for education. And like other consumer loans, they’re based on credit eligibility.

Let’s look at both federal and private student loans to see the differences

Many students are familiar with federal student loans. You fill out financial aid forms to have your eligibility determined. If you’re eligible for a federal student loan, the school will determine how much you may receive.

The funds for your federal student loan are then sent to the school. When it’s time to repay your loan, the standard repayment term is up to 10 years. Federal student loans usually have a lower interest rate than private loans.

With private student loans, a credit check will be run on the student and the cosigner, if applicable.

Students who have no credit history or poor credit history will probably need a qualified cosigner in order to receive a loan.

Generally, the interest rate is higher for private student loans than for federal student loans. For private student loans, the interest rate is usually determined by the student’s and/or cosigner’s credit score.

So having good credit may help you qualify for a better rate.

If your financial aid, savings and federal student loans don’t fully cover the costs of your college, a private student loan may be your answer.

For more information about Chase private student loans, visit ChaseStudentLoans.com.

The Knowledge for College informational video series is brought to you by Chase to help you better understand college financing and other important topics regarding higher education. If you have any questions about your specific situation, you should consult your own financial advisor or the financial aid office of your school.

Important Information: As students determine the best way to finance their education, they should consider the full range of student financial aid options available. Private loans can be used when federal loans, grants and other forms of financial aid are not sufficient to cover the full cost of education.

Generally, Stafford and PLUS borrowers have up to 10 years to repay their loans. New Stafford borrowers after October 7, 1998, whose total outstanding principal and interest exceed $30,000, may repay on a level or graduated repayment plan that may not exceed 25 years.

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