If you are going through difficult times for not paying college fees, private student loan is a good option for you. If Stafford Loan or Pell Grant fails to fill your entire tuition fee then private student loan can fill that gap. Private student loans are different as compared to federal student loans. Once you apply for the student loan, bank will first have a look at your credit worthiness. Either parents cosign the loan for you or take it out for you.
How can you apply for Private Student Loan?
You can directly apply for loan in the bank or you can get information about the banks that give private student loan from the student aid office. This loan is not controlled by the federal government. Hence it becomes necessary that you read terms and condition, modes of payments and other useful details carefully before applying for the loan. Also do not forget to notice the interest rates. In case the applier does not have good credit history or credit score then he has to have a cosigner. Some loans give grace periods to their appliers after graduation while others do not.
Let us now see the terms of private student loan:
One should always keep in mind that the interest rate in case of private student loan is higher as compared to federal loans. The interest rate is even adjusted if one is late for payment. In case of any difficulty, for instance, you lose your job; bank will not delay your loan. You are accepted to pay it on time.
Should one be keen on getting a Private Student Loan?
Paying your college fees with private student loan should be your last option. Before opting for private student loan, you should try other means like opting another school or college with less fees or doing part time job. Also make yourself clear whether your degree will be able to help you to pay the loan soon. Some jobs do not make you earn enough; in that case it becomes difficult to pay back the loan. Also, it is quite difficult for private student loan to get forgiveness program as most of them are made for federal student loan.
What if you are a Graduate Student?
Usually, graduate students opt for private student loan as this is the only option left as Pell Grants are unavailable for graduate students. The fee is also higher. So if you wish to take the private student loan, be careful that your degree is strong enough to help you pay back the debt. Try to live simple and cheaper life as you need to save money to pay back your loan.
Precautions to take if you need extra student loan money
Try to set up a strict college budget before applying for private student loan. Always remember that amount you take as loan will definitely have impact on your future. Plan it properly so that it does not have a very negative impact. Always take advice either by the counseling given in your college or by any other professional. Also, as mentioned earlier, opt for private student loan only if no other option is left. It is a good option to work extra by doing part time jobs and looking for scholarships.