Private Student Loans for College

The federal student loan volume has been consistently high since its inception. People have become very aware of the FAFSA and its purpose in helping determine the amount of student aid that a student can receive through government funded programs. This, of course does not pertain to student credit cards.

VIEW the best college credit card offers here.

For the first time, however, private student loans are being given out more and more, almost to the point of surpassing the amount of federal student loans given. While that has not yet happened, those who watch those trends in financing and education predict that it will happen within another ten years. 

Therefore, you need to take steps to learn as much as possible about the differences in the various private student loans that are available. It is still a good idea however, to get all the federal aid possible each year before turning to private loans. Grant, scholarships, and other forms of student aid such as work-study programs should be the first line of defense against the rising costs of a college education. 

You need to check the actual details of the loan before you apply for a private student loan. Various lenders have differing programs and you need to be aware of these programs as you begin your search. Sometimes lenders offer a low interest rate but charge a lot in fees. Some other lenders may charge no fees but have a higher interest rate. While the lower interest rate may sound like the better deal, in reality, the lower or zero fees may be better for your financial picture in the long run.

There are various charts and calculators available online to help you evaluate the actual cost of the loans that you are considering. Be sure to look these up so that you can tell if the loan deal you are getting is in keeping with what you can do financially. You will need to learn a little bit about what is known as the LIBOR rate and the Prime Lending Rate to be able accurately compare the loans. The best loans are tied to the LIBOR rate so you might check into what your loan money is based on.

College is important enough to plan for – so begin to plan wisely. Research your options and don’t come up short at the last minute which may cause you to rush into a loan that will later cause you difficulties. With the same earnest care as you researched colleges, be sure to research any loans you may need.

Options with Student Loans

There are basically three major options when it comes to student loans, and they are as follows: student loans, parent loans, and private student loans. Each comes with their own features, advantages and disadvantages, and to be discussed here are the private student loans that are available. The main purpose of the private student loans is for students to use them when they have reached the maximum limit offered by standard student loans. 

In other words, if the cost of your college education is more than you received in your standard student loan, you are able to go ahead and apply for a private student loan to get additional funding.

Private student loans are a fast and easy way to fund your education-related expenses, and they are credit-based consumer loans that can be used for any education-related purpose. Whether you want to use it to help cover tuition, books, dorm room costs, food, or any other similar expense, you are able to.

In general, these loans can be used to pay for the estimated annual cost of attendance. Keep in mind however, that one of the biggest differences between private loans and other loans is that with private loans your credit history will generally be checked. Therefore, if you have poor credit, you are less likely to be accepted for the loan, whereas with other student loans your credit history usually does not play a role in whether or not you are accepted for the loan.

There are many advantages offered by private student loans, including that there are fast decisions, as you will usually have preliminary approval within as little as minutes. It is also a very simple application process, whereas the application process with other loans often takes quite a bit of time. 

There are no in-school payments required which is very nice because this is one less thing that you will have to worry about while you are in school trying to study and graduate. There is also usually a grace period – as there is with other types of student loans – which allows you several months after your graduation date before you have to start making payments on the loan. This is especially advantageous because it means that you will have enough time after you graduate to get a new job in your career field so you will be making significantly more income and find it easier to pay off the loan.