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For students who already have an outstanding federal student loan with the U.S. government but still unable to make ends meet, they might consider another alternative - the Private Student Loans.

Advocates of private loans claim that this student lending scheme combine the best elements of government student loans in one: the amount limit, in general, are relatively higher than federal loans, while there still is a grace period of mostly six months during which the student does not have to start paying back his loan right after graduation.

Such a grace period is not included in a federal parent's loan, which has a higher limit than a federal student loan. Critics of private student loans, on the other hand point out that its high interest rates, multiple fees, and lack of borrower protection is not very likable.

There are different kinds of private student loans:
1. School-channel loans - have significantly lower interest rates but they also tend to be processed longer. This type of private loan is certified by the school. Thus, the school signs off the borrowed amount and the funds are disbursed directly to the school.
2. Direct-to-consumer private loans - is not certified by the schools. The schools and the lending agency do not interact. The loaned amount is disbursed directly to the student. Although the interest rate of such loans normally is higher, it gives the student and his family access to the funds very quickly. Sometimes, it only takes a couple of days to process.

Compared to federal loans, which has lower and fixed interest rates, private student loans have variable interest rates. Consumers should keep in mind that the total sum of a loan involves additional fees. While these fees would increase the total cost of money borrowed, it would also reduce the money available for education purposes.

Roger Mitchell has been freelancing as a writer for several years now. His articles on popular health topics include allergies, weight loss and various product reviews can be found on many news sites. His latest contribution published at http://www.jreneeshoes.net where he reviewed the top 5 picks of J Renee shoes!

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