Private Student Loans as College Financing Solutions
Private student loans, also referred to as alternative student loans, are great solutions to help you pay for college or graduate school. These private college student loans make dreams come true for many students and are available through banks, credit unions, online lenders and other financial institutions. Learn what you need to know right here at Student Finance Domain.
- Borrow up to the cost of education.
- Funds sent directly to you. No upfront fees
- Defer all payments until after you graduate.
- Up to 0.25% interest rate reduction.
Private student loans are not one-size-fits-all financial solutions. In fact there are hundreds, maybe thousands, of these loans available in the U.S. And because these loans are more flexible than other loans and tend to have higher limits, you should be able to find one that works for you.
Good credit will help you considerably when applying for a private student loan. In fact you must have reasonably good credit to qualify for one as a single borrower in the first place. If your credit isn't great, or if you haven't yet built it, a cosigner with good credit can help you. When someone cosigns a loan for you, in essence they extend their good credit to you. This is because when they cosign a loan they agree to pay for it in the event you don't. Private lenders consider this an added security measure that the loan won't go unpaid or into default.
Cosigner benefits go beyond just loan acquisition. Cosigners can also help you get a better deal on your loan. Because private college student loans are credit-based, a cosigner with excellent credit can help you get better interest rates and loan terms. So if a trusted adult with good credit, such as a parent, is willing to cosign a loan for you, you'd be wise to accept the offer. But remember what you do with your loan will affect your cosigner's credit too. So be smart and responsible when paying it back.
As you begin to look for alternative student loans, you should understand how each lender calculates interest. This will help you properly compare rate and fee offers. Some lenders will base their rates on the current LIBOR rate. This is 'The London Interbank Offered Rate' and it's the interest rate international banks charge each other to borrow U.S. dollars. The second rate you should know about is Prime. Prime is an interest rate that lenders give to their best customers, and it's usually the same rate at most large banks. In either case you can expect to pay at least a couple percentage point above the going rate for a private student loan.
Don't let money stand in the way of your education. Find the answer with student loans.
Credit based private consolidation loans offer many options
Financial aid - get to know the process that can save you thousands
When you start comparing the different private college student loan products available, you should ask lenders a number of questions to help you evaluate their different loan products. The following should help you get started:
- What are the loan's limits? Can I take out more than my Cost of Attendance (an estimate of how much one year at the school will cost including tuition, room and board, living expenses, books and supplies, and transportation)? Will other aid sources I received be subtracted from the loan amount I am eligible for?
- What are the loan's terms? Will I have at least 10 years to repay the loan?
- Can I defer the loan while I am in school? What are the terms of deferment?
- How will interest be calculated?
- What interest rates are offered with my credit rating? Are interest rates fixed for the life of the loan, or will they change as banking interest rates in general go up and down?
- Will a cosigner help drive my rates down?
- What types fees will I be responsible for?
- What will my monthly payments be? For how long?
- Do you offer a graduated payment system where I can pay more on my loan as I begin to earn more?
- How much interest will I pay over the life of the loan?
Once a private student loan check is in your hands, be sure you're wise with your money. A loan check is not free money. In fact you'll be paying off your student loans for many years when you graduate. So be sure to set yourself up for financial success by only spending what you need and spending it wisely. When used appropriately these private college student loans can make higher education possible for anyone.