In addition to scholarships and grants, there is another valuable resource to help you pay for your child’s education, particularly when grants and scholarships don’t cover all the costs. In the past fifteen years, the emergence of private k-12 education loans has made all types of private school education more accessible. Private student loans are an excellent option that will help you avoid dipping into savings or using high-interest products like credit cards. These loan products, many of which are credit-based, can help you spread out tuition payments and make financing tuition more manageable.

Should you decide to finance your child’s education with a private k-12 education loan, there are a number of things to consider before making your final decision. For starters, it is critical that you research and understand the terms of the loan. Terms of a loan include the interest rate, repayment schedule, and Annual Percentage Rate (APR).

Interest rates and fees vary based on the type of loan you receive. Some lenders have products that offer different interest rates based on the borrower’s credit history and score. Other lenders offer the same rate for every approved borrower. Many loan programs may also include an origination fee. This fee may be an out-of-pocket fee or it may be included in the principal of the loan.

Repayment terms and deferment options (when available) also differ between private loan programs. Some loans begin repayment immediately following the school’s cashing of the loan check. Others might provide a deferment period during which no payments are required. Some private loan programs allow a borrower to pre-pay the loan without penalty, while others charge a fee if you decide to pay off your loan before the end of the repayment period.

The most important metric when comparing and choosing the right private loan is the APR. The APR, or Annual Percentage Rate, represents the annual cost of your loan and is affected by the loan’s interest rate, origination fee (if any), and repayment and deferment terms. Be sure to review all aspects of the assumptions and loan terms used in an APR calculation to ensure a true “apples to apples” comparison among loan options.