These are loans that are not guaranteed by a government agency and are made to students by banks or finance companies. Private loans cost more, sometimes much more, have much less favorable terms than federal loans, and are generally only used when students have exhausted the borrowing limit under federal student loans. They are not eligible for Income Based Repayment plans, and frequently have less flexible payment terms, higher fees, and more penalties, than federal student loans. They cannot be discharged through bankruptcy.