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Private Loans: The Alternative Education Loan for Students Who Need Extra Financial Help

One of Uncle Sam’s greatest gifts to the American student is the federal student loan program that makes it possible for millions of American youth to pursue a higher education. But federal student loans don’t always cover tuition and fees 100%. That’s why so many parents and students are turning to private student loans to fill the gap.

Private student loans, not just for tuition!

All the talk these days is about the higher costs of college tuition. But what’s often overlooked are all the other college expenses that can make going to college more financially overwhelming.

However, that may not be a problem for you, since most private loans can cover virtually all college expenses, including: Room and board Accommodation off-campus Registration fees Textbooks Laptop/Internet access Internet Travel expenses to get there and classes

How can you qualify for a private loan?

Because private loans are made by private institutions, such as a bank or other private lending institution, your ability to obtain a loan will be based on merit, specifically good credit, essentially, a high enough credit score. The availability of a co-signer with good credit is even better from a lender’s perspective because, given a co-signer’s good credit, their combined probability of repaying the loan is higher. Therefore, the lender is more likely to approve you for a private loan.

If you think about it, most consumer loans require collateral, like a house or a car. If a borrower defaults on the loan, then the lender can repossess the property from him, so he can sell it to get back the money he lent.

In the case of education loans, there really is no collateral; I mean, how can a lender get his education back? You can’t. That’s why lenders rely on a good credit history, as it’s a strong indicator that you and/or your co-signer have a proven history of paying your credit cards or other loans in a timely and responsible manner.

Co-signers with good credit can help you qualify for a private loan, lower your borrowing costs, and improve your credit score!

Because private loans are based on merit, the rate you receive is based on your credit history and income. If you don’t have one or the other or both, having a creditworthy co-signer can be invaluable. In fact, a co-signer with good credit can help you get a private loan at a lower interest rate, saving you a ton of money over the life of the loan.

Another added benefit of a creditworthy co-signer is “guilt by association, but in a good way.” This means that responsible and timely payment of your private loan under a co-signer agreement will be a positive way to build your own credit history.

Take advantage of the benefits of private loans

Of course, the main purpose of getting a student loan is to help you get a solid education so you can pursue your career aspirations. And using credit wisely is important. That’s why we encourage you to seek as much federal student aid, grants, and scholarships as possible before applying for a private loan.

Private Loan Application Process – Get Pre-Approved in Minutes if You Qualify!

However, once you determine that a private student loan may be a viable alternative source of financing to fill the financial gap in your education, you could be pre-approved for a private loan within minutes of applying! Often times, the application process is very simple, and with most lenders, it can even be handled over the phone or online.

Longer prepayment terms and no prepayment penalties can help you better manage your post-college cash flow

When it comes to paying off your private loans, many lenders give you up to 20 or 25 years to do so. The absence of prepayment penalties means that as long as you make your minimum monthly payment, you can pay off your loans as quickly or as slowly as you like within your payment term.

Interest rate discounts can help lower the cost of private borrowing even further!

Many private loan lenders would like to have your business. So be sure to shop around and ask each lender about these and other “borrower benefits” of private loans, such as:

o An interest rate discount for automatic payment from a checking or savings account

o An interest rate discount simply for making payments on time.

o No or minimal origination fees, if you or your co-signer have good credit

Who is eligible for a private loan?

Please note that each private loan lender has certain eligibility requirements. For most private student loans, you must meet the following criteria:

– Must be a creditworthy applicant or have a creditworthy co-borrower

– Must be a US citizen, US permanent resident, or international student with a qualified US citizen or US permanent resident co-signer.

– You must be within the age of majority according to your state of residence (generally 18 years of age)

– May be a full-time, part-time, or less than part-time student (including continuing education)

Types of private loans

The good thing about private loans is that many lenders have a variety of loans to suit your specific course of study. The name of the loan, the minimum and maximum loan amounts, and the loan repayment terms are tailored to the typical needs of the course of study you have chosen to pursue.

private undergraduate loans – Just as the name suggests, apply for a private college student loan if you’re a college student or attending a career, technical, and trade school in the US, at least part-time. Private Continuing Education Loans – This private loan is right for you if you are completing a degree, certification program, or taking classes to advance your career or for personal development. A private continuing education loan is available to you if you attend an eligible school at least half time (less than half time). Graduate/Professional Private Loan – If you have decided to pursue an advanced degree at participating colleges and universities, and plan to attend at least part time, then this private loan can provide you with the funds you need to achieve your educational goals. K-12 Education Private Loan – If you are a parent or other adult sponsor (relative or friend) of children attending participating non-public elementary schools, many lenders provide these loans to help cover expenses. Most lenders offer private K-12 education loans for students attending private, religious, high school, and military or special education schools.

Do you need more money to pay for college? Private loans are here for you!

Now that you’ve learned about an alternative way to pay for your college-related expenses, don’t let anything stop you from pursuing your dreams of success. A great education is a wonderful thing and nothing should stand in the way of you reaching your goals.

As you begin or continue your education, the availability of private loans gives you an option to finance your education when you don’t know where else to turn to get the money you need.

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