| Private
Student Loans - sometimes referred to as “alternative
student loans” – can be used to bridge the gap
between the financial aid offered by your school and any outstanding
need you may have. Private student loans are an alternative
source of financial aid funding provided through Studentloans.com,
and can be used for any education-related expense –
such as tuition, books, housing, utilities, computers, food,
and lab fees. Since private student loans are credit-based,
you should apply with a credit-worthy co-borrower if possible,
to obtain the best financing rate and terms.
- Private Education Loan Funding: If you
are unable to meet your education costs through federal
financial aid programs, there are alternative loans
available to supplement your education financing. Alternative
loans – also known as private student
loans – are credit-based financial aid offered
by lenders, and are not guaranteed by the federal government.
- Eligibility for Private Student Loans:
Your private loan eligibility may be affected by your government
student loans, whether your school participates in the
FFELP or the FDLP student loan program, and other factors.
- Terms for Private Education Loans: For
most private student loans, approval is based on the credit
history of the student and/or co-signer. (A co-signer, aka
co-borrower, is a person who signs the loan promissory note
in addition to the borrower, and the co-signer is responsible
for the obligation if the borrower does not pay.) Private
student loans are based on credit history, and each lender
has sole discretion on loan approvals. Most private loans
require that a student be attending school at least half-time.
- Private Student Loan Interest Rates:
Many private education loan programs provide either a variable
interest rate or a fixed interest rate option. Private loan
interest rates are usually tied to the credit score of the
borrower. Depending on the applicant’s credit, an
origination fee may apply. You should carefully review the
interest rates and fees to find a loan that best suits your
needs.
- Repayment of Private Education Loans:
The private student loan repayment terms vary from 15 to
25 years, depending on the program. Typically, you will
not be required to make payments on private student loans
and alternative financial aid programs while you're enrolled
at least half-time. You also may be allowed a grace period
after you graduate, drop below less than half-time enrollment,
or withdraw. Private loans generally do not have deferments
or forbearances. Many private loan lenders offer interest-rate
reductions for timely payments or borrowers who choose to
have their payments deducted directly from their bank account.
Payments deducted from a bank account is referred to as
ACH.
Click here for more information about
Private Student Loans & Alternative Financial Aid Services.
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