Majority of Federal student loan programs provide substantial amount of financial aid without credit checks. The most preferred loan program is the unsubsidized loan, which accrues interest while the student is in school and making satisfactory progress. However unsubsidized loan programs are need based that carries few other criteria and hence it may be tough to qualify for. In most of the cases, even after qualifying, unsubsidized loans cover part of the total cost involved for education. In such scenarios to make up for the entire expense involved borrowers may try to avail a private loan.

However, Private loans have their own set of advantages and disadvantages. Private loans are highly based on the credit score of the applicant. The credit history of parents are taken into consideration when deciding on the student's loans. Hence for those with bad credit, they may end up paying high rates of interest towards that loan. Not only do they have high interest premiums, they have additional charges as well. For instance, for a loan amount of $4000, about 4% would be charged towards fees before the loan is disbursed. The fees is normally deducted from the loan amount, which in simple term means, the borrower pays for $160 that he would not see. A rule of thumb to go by is that for every 3% of additional fee one must pay, it would average out to 1% more of the interest rate.

The major advantage of private loans is that they are easily available. Since they exist with an objective to make profit through fees and interests, they make the loans available to most of the applicants. On every loan application, they try their level best to get the loan approved. On the hand, the Federal lenders have stringent criteria to adhere to when they consider an application and once an application is turned down, it is rare for a federal loan to be given. Professionals are trained to resolve problems of customers quickly so as to give as much customer support as possible, for private loans. Whereas Federal loans usually have limited staffs where quality do not usually meet the service provided by private lenders.

In addition to availability and better customer service, Private loans are preferred for few other practical considerations. Unlike the Federal student loans, the applicant need not provide supplemental documentation or fill up the FAFSA (Free Application for Student Aid) forms. But bear in mind that the interest premiums and charges will be different and based on the different features of the scheme. Out of all the private loan programs available, the most desirable would be the one with no fees and that has interest rate equaling to 1% prime rate. The fees that banks charge one another for their prime customers is known as 'Prime rate'. It would be highly advantageous when the Interest rate is equal or lower to the prime rate. As mentioned earlier, it is also important to check for additional fees since that can substantially increase the cost of the loan.

To avail a private loan with such features depends on good credit score of the applicant or the co signer. You should make deeper inquiries by ascertaining the background and history of private lenders. Alternatively, you can shop online to see the different schemes catered to applicants and you can even see specific loan schemes at sites such as (www.finaid.org/loans/privatestudentloans.phtml). There are also loan calculators available online at (www.bankrate.com/brm/rate/calc_home.asp) that would help you check some sample scenarios. While checking the feasibility from those scores, it is important to consider the cost involved in terms of initial charges as well as the interest rates throughout the tenure has to be considered to derive at the exact figure.