If you’ve been to college or have recently graduated, chances are you have a student loan. About 43.3 million people have student loans, and 90% of borrowers take out a Federal student loan, according to the US Department of Education. But federal loans don’t always cover all of your college costs, and more borrowers are turning to private loans; according to a new study by LendEDU, 1.4 million people currently have a private loan to pay for college costs.

Experts recommend using Federal loans, financial aid, and scholarships before taking out a private student loan. Understanding the main differences between your loan options will help you determine the best way to fund your education.

Difference 1: How they’re funded

Federal loans are funded by the US Department of Education or private institutions that the government guarantee to pay back in case of default. Federal loans come with more protections, such as flexible payment schedules, lower interest rates and income-based pay-back programs.

Private loans are funded by banks and other lenders, such as credit unions, which means the lenders set the terms and interest rates. Interest rates are typically higher, and there is less flexibility for the borrower.

Difference #2: Interest Rates

The interest rate for federal loans is set by the Federal Reserve. They have fixed interest rates, which means the rate won’t change for the entirety of your loan. In 2017, the Federal Reserve raised the interest rate on undergraduate loans to 4.45%, and 6-7% for graduate student loans.

Private loans can have fixed or variable rates. Variable interest rates can fluctuate depending on the economy, potentially adding large amounts of interest to your loan. According to LendEDU, the average fixed-rate student loan is 9.66%, while the average variable rate is 7.81%, but rates can vary depending on your lender and loan terms.

Difference #3: Getting the loan

You will need to fill out the Free Application for Student Aid (FAFSA) in order to apply for a federal student loan, and you’ll also find out if you qualify for federal grants or other student aid. Your credit will not affect your ability to get a government loan.

There are three different types of federal student loans. A Direct Subsidized loan is given to students with financial need, and the loan interest will be paid by the federal government if you go to school part time, during the six months after you graduate or if you defer your loan payments. You can also receive a Direct Unsubsidized loan, which you are eligible for regardless of financial need, and you are responsible for all interest payments. Finally, you can receive a Direct PLUS loan, for graduate or professional school students.