Private college loans often help pay for the school expenses that remain uncovered after using scholarships, grants or federal student loans. Such a loan might be an answer to your troubles when it comes to paying for more than just tuition and fees: rent (room and board), laptop, trips home and textbooks. Nevertheless, it is of paramount importance that you don't borrow too much. Calculating the amount that you need and sticking to it represents the wisest decision, even if you feel tempted to get more.
Here are some of the aspects to look into when it comes to choosing private college loans.
Are you eligible?
- US citizenship or permanent residence is required.
- You should be enrolled with a lender-eligible school.
- You should be creditworthy or have a creditworthy co-signer.
These eligibility criteria are pretty general, and they often vary for private college loans depending on the lender. The credit requirements pose many difficulties since numerous students don't have a credit history, nor any income or employment information. Then, you need to get a co-signer (a parent would be ideal) to have the loan approved.
What amount do you need to borrow?
This is another aspect to bear in mind and look into when searching for private college loans. The minimum and maximum loan amounts also vary by lender. The student needs to contact the school and get an official document stipulating the total cost of attendance. Based on the information provided by the school, lenders may then calculate their own cost-of-attendance figures.
Check the terms of repayment!
In order to realistically evaluate your options for private college loans, you need to be informed on the following:
- the time repayment is due to begin;
- whether there are any prepayment penalties;
- whether there are deferment or forbearance benefits.
You need to check deferment and forbearance benefits in particular because the majority of private college loans don't allow you to postpone loan payment when you experience financial hardships due to unemployment. Deferment and forbearance are available usually with federal loans, and only few private lending programs include such benefits.
Don't rush into contracting a private loan until you have exhausted all your other options of getting free money or federal loans for your education:
- scholarships and grants;
- low cost federal student loans;
- parent federal loans etc.
If all these don't help you cover the full cost of your education, then you can look into private college loans too.
Here are some of the aspects to look into when it comes to choosing private college loans.
Are you eligible?
- US citizenship or permanent residence is required.
- You should be enrolled with a lender-eligible school.
- You should be creditworthy or have a creditworthy co-signer.
These eligibility criteria are pretty general, and they often vary for private college loans depending on the lender. The credit requirements pose many difficulties since numerous students don't have a credit history, nor any income or employment information. Then, you need to get a co-signer (a parent would be ideal) to have the loan approved.
What amount do you need to borrow?
This is another aspect to bear in mind and look into when searching for private college loans. The minimum and maximum loan amounts also vary by lender. The student needs to contact the school and get an official document stipulating the total cost of attendance. Based on the information provided by the school, lenders may then calculate their own cost-of-attendance figures.
Check the terms of repayment!
In order to realistically evaluate your options for private college loans, you need to be informed on the following:
- the time repayment is due to begin;
- whether there are any prepayment penalties;
- whether there are deferment or forbearance benefits.
You need to check deferment and forbearance benefits in particular because the majority of private college loans don't allow you to postpone loan payment when you experience financial hardships due to unemployment. Deferment and forbearance are available usually with federal loans, and only few private lending programs include such benefits.
Don't rush into contracting a private loan until you have exhausted all your other options of getting free money or federal loans for your education:
- scholarships and grants;
- low cost federal student loans;
- parent federal loans etc.
If all these don't help you cover the full cost of your education, then you can look into private college loans too.
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