What is a private student loan?
‣ Private student loans are loans that are made by private institutions or banks that work outside of what the government may offer as a subsidiary. These loans tend to be offered by big banks, credit unions, and other financial institutions. They come in many different sizes, some you probably have heard of, and others who may be quite small.
How much can I take out with a private student loan?
‣ With private student loans, you have the opportunity to take out generally as little as $1000 on the low-end of the spectrum and on the high-end well north of $200,000. It really comes down to how much you need for school. In most cases, when you qualify the sky is really the limit. Be sure to check with your lender to see lender amounts, terms, and conditions.
What can I use my private student loan to pay for?
‣ Private student loans allow you to pay for many things within the education wheelhouse. Some of the common things that you can purchase with a private student loan include; Tuition, College Fees, Textbooks, Housing expenses, Transportation, Computers, Miscellaneous supplies, and much more. However, one thing to keep in mind is that you do have to repay ALL of your student loan debt. Be smart with what you choose to pay for with your private student loan and you should come out just fine.
Does everyone happen to get approved for a private student loan?
‣ Unfortunately, this is not the case. Not everyone will qualify for a private student loan. As with credit cards or mortgages, many financial factors are taken in order to see the likeliness of you paying off your debt. If you have applied for a private loan but got denied, don’t stress, you may want to look into using a co-signer and try applying again. This may help your chances quite a bit depending on the co-signers credit history and other financial factors.
Are there any advantages to taking out private student loans?
‣ In some cases, private loans are the only route some students will have in order to be able to go to college. This is not super common but is one of the advantages for those students who would have no other options to attend school if it were not for private student loans.
How about the disadvantages when it comes to private student loans?
‣ As with any positive, there are bound to be some negative counterparts. With private student loans, one of the biggest downsides is that they tend to be very expensive. This is generally due to the fact that most of the private student loans are at the variable-rate for interest. Another huge factor when it comes to taking out private student loans is that unless you have a solid income and established credit history you will more than likely need a co-signer. This may not be a huge problem for some people, but this can be a big factor when looking at your options to pay for school.