What is a Private Student Loan?
It is extremely important to understand the different types of loans that you will be faced with when looking for how to pay for your college education. After understanding the different types of federal loans, you can choose from, it is now time to understand what private loans you can look into for your education.
What is a private student loan?
Unlike federal loans, private student loans can come from a variety of places. It is important to get a private loan based on which lender offers a loan agreement that works for you and your budget. Not all private loans are the same and vary based on the lender that you borrow from. However, it is good to keep in mind that a majority of private student loans require payments while you are in school yet there are some that allow you to wait until you are finished with school. Depending on where you want to get your private student loan from, you can have either variable or fixed interest rates. Usually private student loans are often unsubsidized which means that you will be responsible for all interest on your loan. Due to the fact that private student loans are usually borrowed from banks more times than not, you will usually require an established credit history with a good score or a cosigner. Similarly to federal student loans, interest may be tax deductible. Unfortunately, private student loans cannot be consolidated into a Direct Consolidation Loan but can be refinanced for better interest rates. However, each lender has options about postponing payments, lowering payments, and other repayment options that can affect how much you actually owe to the lender.
What are good private loan options?
There are different options that would be better suited for different schools. However, the list that was created is meant to be for the University of Delaware just as a generic base of a state university. You can use specific search tools online to compare different lenders for you student loan. This list will highlight three lending options that you should consider.
1- College Ave: This is a widely liked lender because of the flexible repayment options, no application fees, no prepayment penalty, discount options, easy application process, and an approval process that goes easy on your credit score.
2- Sallie Mae: This may be a more familiar name to some people because of how widely used this lending service is. This is a preferred choice for students because of its’ long history, excellent A+ BBB (Better Business Bureau) ranking, flexible repayment options, friendly customer service that is based in the U.S., different loan options, and easy application process.
3- Ascent: This one may not be as well known as the other two options on this list, but they should be! This is a favorite amongst students because of their forgiving eligibility, numerous repayment options, multiple interest rate options, no application fee, no repayment penalties, easy to navigate technology, cash back rewards, and prequalification visibility that doesn’t affect your credit score.
These are just three options that you may want to look into, you can find more information about the different types on lenders online. However, to repeat, it is important to keep in mind that not all lenders are the same and each lender offers a variety of options that will fit into your budget better than others. After creating a solid foundation of knowledge between federal student loans and private student loans it is now time to go about the process of getting a loan! Keep on the lookout for articles that talk about getting a student loan and keeping your payments manageable and affordable for your lifestyle and budget!