Types of private Students Loans
There are two types of private student loans
Private Student Loans
Private student loans are available to any student. A parent or another creditworthy individual often cosign student loan.
Parent Loans
Parent loans are another way to find the money for college. A parent or other creditworthy individual takes out the loan to help their student pay for college expenses.
When should I use a private student loan?
If you are planning for a college but know that getting a degree can become an expensive prospect due to the direct and indirect costs of attending college which makes educational costs out of your reach, then you can go for a private student loan. A private student loan is a credit-based loan offered by lending institutions, such as banks and credit unions to get money in financing your college education. Based on how much you borrow and for how long, you will have to pay interest on the loan and eventually pay the borrowed amount back.
What can a private student loan be used for?
A private student can be used to cover all school-certified expenses like tuition, academic fees, housing, meals, transportation, books, even computers and electronics and other education-related expenses.
When should I apply for a private student loan?
You can apply for a private student loan at any time throughout the year when you experience any unforeseen expenses partway through the semester. But, don’t apply for a private student loan with days or weeks before tuition is due. Keep in mind while some private student loans can be easily approved in minutes, some might take up to two months. With so many tasks and deadlines to meet college expenses, it is better to give yourself plenty of time to get the money and until the last minute to apply for any loan.
What are the eligibility requirements for private student loans? Do I need a cosigner?
Although specific criteria vary from lender to lender, these are the five most common requirements private lenders consider before approving you a loan. To get approved for a student loan, you have to be a student at eligible school, need to meet age, education and citizenship requirements, plan to use the loan to cover your educational expenses, meet credit and income criteria and apply with a creditworthy cosigner. Most private student loan borrowers will need to apply with a cosigner as they lack credit.
What should I consider when choosing a private student loan lender?
Picking the right student loan from the right private student loan lender can make a big difference when it comes time to repay your loan. If you are unsure what type of loan to choose, a good rule of thumb is to compare private loans from multiple lenders and choose one that offers a low-interest rate, multiple repayment options with terms and borrower protections.
How does the private student loan application process work?
Process 1: Research your student loan options and understand interest rates and repayment terms.
Process 2: Apply for a private student loan by filling out an application and provide information and all the documents your lender requires to sanction a loan.
Process 3: After submitting your loan application, the reviews process begins to evaluate your credit history among other criteria and to determine if you’re an eligible candidate for a loan or not. This decision can produce one of three results: approved, denied or eligible with a creditworthy cosigner.
Process 4: If you are approved for a loan, Congratulations! It’s time to accept and sign your loan terms with your lender.
Process 5: Once you’ve signed your loan documents, you’ve almost completed your responsibilities to avail loan. Your lender will send your loan application to your school to confirm several things, and all you can do is to wait for school certification.
Process 6: Once your loan is certified from your school, your lender will disburse funds to you.
Final Process: Based on your loan repayment terms, you’re required to repay your loan.
Which is the Best Private Loan?
Private loans for school or college are worth considering as they are for fulfilling your dreams, not emptying your bank account. As you compare private student loans from multiple lenders, you could consider these lenders- College Ave, Sallie Mae, Ascent, Earnest, Discover, CommonBond and Citizens Bank for offering competitive rates and additional benefits. You can go with one of these or find another lender that’s a better fit for you. Make sure to shop around to get the best deal available for your situation.
