All About Private Loans
There are things you need to know about private loans before applying for one.
Money is a tough issue for any college student. Whether you are a senior in high school, a senior in undergraduate school, or someone who is about to enter graduate school, you will probably need financial assistance.
Loans are a great way of paying for college now and catching a break to get a job and pay them off later. It is like someone telling you, “I am lending you this money because I know you can pay me back later.” Isn’t it a nice feeling when someone believes in you?
However, be sure to look over the “Terms and Conditions” for every option. Different lenders will have different interest rates, payback timelines, and requirements to be eligible for a private loan. It is like the same someone telling you, “I’m not putting all of my eggs in one basket, so here is how it’s going down …”
The main difference between federal loans and private loans is:
•Federal student loans are funded by the federal government.
•Private student loans are made by a lender such as a bank, credit union, state agency, or a school.
Now that you know where each loan comes from, here are some other ways these two types of loans differ:
Federal Loans …
•Can help you lower your payments if you are having trouble paying back
•Offer loan forgiveness programs
•Do not require your credit history
•Do not require you to start paying back until after you graduate
Private Loans …
•May not have deferment options to help you pay back
•Do not offer loan forgiveness programs
•Are more expensive
•Have higher interest rates
Click here for more information on both types of loans. Continue reading for more information about private loans.
Check Your Options
Before you start applying for a private loan, revisit your options with federal loans, savings, and scholarships. Financial advisors will always encourage you to max out your federal financial assistance before pursuing a private loan.
This kind of loan should really be your last option when borrowing money. This is not to discourage you from searching for further financial assistance from the private sector. Just be aware that private loans are not the usual first safety line.
They’re More Expensive
The main reason you should consider private loans after all other options are exhausted is because of higher interest rates.
Interest rates on private loans tend to be higher due to the high risk of repayment and higher amounts of money offered among other factors.
You Need Credit History
Do you have a good credit score? Do you even have credit history? Federal loans do not run credit checks so you can go ahead and apply for one now.
Depending on who you go to, some private lenders will require you to provide your credit history. This is to determine how much the bank is willing to lend you. If you have good credit standing, you have a better chance of being offered a larger loan because of your record ability to pay on time.
If you aren’t sure about your credit score or it isn’t in good standing, you will be asked to have a cosigner. Cosigners pledge to take on the loan payments should you default on a payment or need help. A college student’s cosigner is usually a parent or guardian, but anyone with good credit can cosign a loan with you.
Do Not Over-Borrow
Many students have the misconception that they should borrow all the money that is available to them. In order to avoid unnecessary debt and financial stress, learn what your budget is before speaking with a private lender.
1. Consider the total cost (tuition, room and board, and additional fees) of a semester of your preferred college.
2. Deduct how much federal aid will cover of the total amount.
3. Allocate any other money you have (scholarships and grants) that can help you bring the leftover amount down.
4. If you have a job, it would be wise to incorporate how much you will earn into your budget.
Be smart and only borrow whatever amount is left. If you choose to increase your loan amount, you should save it for emergency purposes.
Sallie Mae’s College Planning Calculator can help you figure out how much you should save and borrow. Here are some perks of using this tool, according to the web page:
•You can see the full cost of college, not just tuition.
•Factor savings, scholarships, grants, and loans into your plan.
•If college is just around the corner, they can help you figure out how to pay for it.
•If college is far away, they can help you save for it.
•See guidelines for a loan payment compared to the salary needed to support it.
•Save your plan and you can review, revise, and update it at any time while you put that plan into action.
If you need further assistance on calculating and planning ahead, visit the financial aid office at your school or talk to your parents about your options. Paying for college does not have to be expensive if you do a bit of research and consider different choices.
Apply to Write for Uloop NewsJoin the Uloop News Team
Discuss This Article
More Uloop Business Articles
Recent SF State News Articles
RECENT SF STATE CLASSIFIEDS
GET TOP STORIES DELIVERED WEEKLY
WRITE FOR ULOOPApply to Write for Uloop News
TOP 5 NEWS ARTICLES
MOST POPULAR SF STATE NEWS
BROWSE OTHER COLLEGES
- By CollegeUC Santa BarbaraCal PolyUC DavisUC IrvineUC San DiegoUC Santa CruzStanford UniversityUCLACal Poly PomonaCSU ChicoCSU FullertonCSU Long BeachCSU NorthridgeCSU SacramentoUC BerkeleyPepperdine UniversitySan Diego StateSan Francisco State UniversitySan Jose State UniversityUSCCalifornia State University-San BernardinoCalifornia State University-FresnoCalifornia State University-Los AngelesUC RiversideCalifornia Institute of TechnologyCalifornia State University-Dominguez HillsCalifornia State University-East BayOccidental CollegeLoyola Marymount UniversityCabrillo CollegeAlliant International UniversityAzusa Pacific UniversityAntelope Valley CollegeBakersfield CollegeBiola UniversityBrooks Institute of PhotographyCalifornia Baptist UniversityClaremont McKenna CollegeCalifornia Pacific UniversityCalifornia State University Monterey BayCuesta CollegeConcordia University IrvineCalifornia State University Channel IslandsDiablo Valley CollegeBethany UniversitySanta Barbara City CollegeFive Branches UniversityWest Valley CollegeWestmont CollegeUC MercedUC Hastings College of the LawPalomar CollegeSaint Mary's CollegeSonoma State UniversitySierra CollegeChapman UniversitySaddleback CollegePacific Union CollegePierce CollegePasadena City CollegeFeather River CollegeCalifornia Culinary AcademyMira Costa CollegeLos Rios Community College DistrictLas Positas CollegeGrossmont CollegeIrvine Valley CollegeMenlo CollegeAllan Hancock CollegeHumboldt State UniversityUniversity of San DiegoUniversity of San FranciscoLoma Linda UniversityFullerton CollegeSanta Clara UniversityChabot CollegeFoothill CollegeNational UniversityButte CollegeAcademy of Art UniversityWhittier CollegeLincoln UniversityMerced CollegeCalifornia State University-BakersfieldSanta Monica CollegeMt. San Jacinto CollegeCoast Community College DistrictRiverside Community CollegeUniversity of the PacificPomona CollegeLa Sierra UniversityScripps Research InstituteDe Anza CollegeGrossmount-Cuyamaca Community CollegeAmerican Intercontinental UniversityArt Center College of DesignCalifornia College of the ArtsCalifornia Institute of Integral StudiesCalifornia Institute of the ArtsCalifornia Lutheran UniversityCSU San MarcosCalifornia State University-StanislausClaremont Graduate UniversityClaremont McKenna CollegeDominican University of CaliforniaEx-Pression College for Digital ArtsFielding Graduate UniversityFresno Pacific UniversityFuller Theological SeminaryGolden Gate UniversityHoly Names UniversityJohn F Kennedy UniversityMills CollegeMount St Mary's CollegeMusicians InstituteNaval Postgraduate SchoolNotre Dame de Namur UniversityOtis College of Art and DesignPacific Oaks CollegePoint Loma Nazarene UniversitySamuel Merritt CollegeSimpson UniversityThe Art Institute of California-Los AngelesThe Art Institute of California-Orange CountyThe Art Institute of California-San DiegoThe Art Institute of California-San FranciscoThe Fashion Institute of Design & MerchandisingThe Master's College and SeminaryUC San FranciscoUniversity of La VerneUniversity of RedlandsVanguard University of Southern CaliforniaPeralta CollegeWestern University of Health SciencesWoodbury UniversityCity College of San FranciscoCalifornia Institute of the Healing Arts and SciencesCypress CollegeEast Los Angeles CollegeLos Angeles City CollegeCollege of MarinOhlone CollegePitzer CollegeSouthern California Institute of ArchitectureScripps CollegeWorld Mission UniversityThe Wright InstituteCerro Coso Community CollegeCollege of the DesertSan Diego City CollegeArgosy UniversityImperial Valley CollegeModesto Junior CollegeShasta CollegeCollege of San MateoCollege of SiskiyousLassen Community CollegeVentura CollegeNewSchool of Architecture + DesignAmerican River College Barstow Community College DistrictBerkeley City College Citrus CollegeCoastline Community College College of Alameda College of the Siskiyous Contra Costa College Contra Costa Community College DistrictCosumnes River College Cuyamaca College El Camino College-Compton Community Ed CenterEvergreen Valley College Fresno City College Glendale Community College (CA)Laney College Long Beach City College Los Angeles Harbor College Los Angeles Mission College Los Angeles Southwest College Los Angeles Trade-Technical CollegeMoorpark College Mt San Antonio College North Orange County Community College DistrictOrange Coast College Palo Verde College Porterville College Reedley College Rio Hondo College Sacramento City College San Diego Community College DistrictSan Diego Mesa College San Diego Miramar College San Joaquin Delta College San Jose City College San Jose-Evergreen Community College DistrictSkyline College Solano Community College South Orange County Community College DistrictState Center Community College DistrictTaft College Ventura County Community College DistrictVictor Valley CollegeWest Hills Community College- CoalingaWest Hills Community College DistrictWest Hills Community College-LemooreWest Los Angeles College Woodland Community College Yosemite Community College DistrictYuba CollegeFashion Institute of Design & Merchandising-San DiegoFashion Institute of Design & Merchandising-San FranciscoAcademy for Jewish Religion-CaliforniaAcademy for Salon ProfessionalsAcademy of Esthetics and CosmetologyAdvance Beauty CollegeAdvance Beauty Techs AcademyAdvanced Career InstituteAdvanced CollegeAdvanced Computing InstituteAlhambra Beauty CollegeAlliant International University-FresnoAlliant International University-IrvineAlliant International University-Los AngelesAlliant International University-SacramentoAlliant International University-San DiegoAlliant International University-San FranciscoAllied American UniversityAmerican Baptist Seminary of the WestAmerican Beauty CollegeAmerican Career College at St FrancisAmerican Career College-AnaheimAmerican Career College-Long BeachAmerican Career College-Los AngelesAmerican Career College-OntarioAmerican College of HealthcareAmerican College of Traditional Chinese MedicineAmerican Conservatory TheaterAmerican Institute of Massage TherapyAmerican Jewish UniversityAmerican Medical Sciences CenterAngeles InstituteAnnenberg School of NursingAntioch University-Los AngelesArgosy University-San DiegoAshdown College of Health SciencesAsher CollegeAsian American International Beauty CollegeAssociated Technical College-Los AngelesATEP at IVCATI College-NorwalkAvance Beauty CollegeAveda Institute-Los AngelesBaldwin Park Adult & Community EducationBay Area Medical AcademyBay Area Medical Academy - San Jose Satellite LocationBeaumont Adult SchoolBellus Academy-El CajonBellus Academy-National CityBellus Academy-PowayBethel Seminary-San DiegoBethesda UniversityBeyond 21st Century Beauty AcademyBlake Austin CollegeBlake Austin College Beauty AcademyBrand CollegeCalifornia Beauty SchoolCalifornia Career CollegeCalifornia Career InstituteCalifornia Christian CollegeCalifornia College San DiegoCalifornia Hair Design AcademyCalifornia Healing Arts CollegeCalifornia Miramar UniversityCalifornia Nurses Educational InstituteCalifornia Western School of LawCambridge Junior College-WoodlandCambridge Junior College-Yuba CityCanada CollegeCareer Academy of BeautyCareer Care InstituteCareer College of CaliforniaCareer Development Institute IncCareer Networks InstituteCarrington College-Citrus HeightsCarrington College-PomonaCarrington College-SacramentoCarrington College-San JoseCarrington College-San LeandroCasa Loma College-Anaheim CampusCasa Loma College-Van NuysCentral California SchoolCentral Coast CollegeCerritos CollegeCES CollegeCET-CoachellaCET-El CentroCET-OxnardCET-SacramentoCET-San BernardinoCET-San DiegoCET-Santa MariaCET-SobratoCET-SoledadCET-WatsonvilleCharles A Jones Career and Education CenterCharles R Drew University of Medicine and ScienceCharter College-Canyon CountryChurch Divinity School of the PacificCinta Aveda InstituteClaremont School of TheologyClovis Adult EducationCoachella Valley Beauty CollegeCoachella Valley Beauty College-BeaumontCoast Career InstituteCoastline Beauty CollegeCogswell CollegeColeman UniversityCollege of the CanyonsCollege of the RedwoodsCollege of the SequoiasColton-Redlands-Yucaipa Regional Occupational ProgramColumbia College-HollywoodComputer Training AcademyComputer Tutor Business and Technical InstituteConcorde Career College-Garden GroveConcorde Career College-North HollywoodConcorde Career College-San BernardinoConcorde Career College-San DiegoCopper Mountain Community CollegeCosmo Beauty AcademyCosmo Factory Cosmetology AcademyCrafton Hills CollegeCRU InstituteDesign Institute of San DiegoDiamond Beauty CollegeDominican School of Philosophy & TheologyDongguk University-Los AngelesDowney Adult SchoolElite Cosmetology SchoolEverest College-AlhambraEverest College-AnaheimEverest College-City of IndustryEverest College-GardenaEverest College-ResedaEverest College-West Los AngelesFashion Institute of Design & Merchandising-Orange CountyFederico Beauty InstituteFlair Beauty CollegeFolsom Lake CollegeFour-D CollegeFranciscan School of TheologyFredrick and Charles Beauty CollegeFremont CollegeGalaxy Medical CollegeGavilan CollegeGemological Institute of America-CarlsbadGolden Gate University-Los AngelesGolden Gate University-Silicon ValleyGolden State College of Court ReportingGrace Mission UniversityGraduate Theological UnionGurnick Academy of Medical ArtsHacienda La Puente Adult EducationHair California Beauty AcademyHeald College-ConcordHeald College-ModestoHeald College-RosevilleHeald College-SalinasHeald College-San JoseHeald College-StocktonHigh Desert Medical CollegeHilltop Beauty SchoolHinton Barber CollegeHomestead SchoolsHorizon UniversityHumphreys College-ModestoHumphreys College-Stockton and Modesto CampusesHypnosis Motivation InstituteInfoTech Career CollegeInstitute for Business and TechnologyInstitute of Technology IncIntegrity College of HealthInterCoast Colleges-BurbankInterCoast Colleges-CarsonInterCoast Colleges-Elk GroveInterCoast Colleges-FairfieldInterCoast Colleges-OrangeInterCoast Colleges-RosevilleInterior Designers InstituteInternational College of CosmetologyInternational Culinary Center-CaliforniaInternational Polytechnic InstituteInternational School of Beauty IncInternational Technological UniversityITT Technical Institute-ConcordITT Technical Institute-CoronaITT Technical Institute-Culver CityITT Technical Institute-LathropITT Technical Institute-OaklandITT Technical Institute-OxnardITT Technical Institute-Rancho CordovaITT Technical Institute-San DimasITT Technical Institute-SylmarITT Technical Institute-TorranceJohn Wesley International Barber and Beauty CollegeKaplan College-BakersfieldKaplan College-ModestoKaplan College-North HollywoodKaplan College-Palm SpringsKaplan College-RiversideKaplan College-SacramentoKaplan College-VistaLaguna College of Art and DesignLawrence & Company College of CosmetologyLe Cordon Bleu College of Culinary Arts-PasadenaLeMelange Academy of HairLife Chiropractic College WestLife Pacific CollegeLos Angeles CenterLos Angeles College of MusicLos Angeles County College of Nursing and Allied HealthLos Angeles ORT College-Los Angeles CampusLos Angeles ORT College-Van Nuys CampusLu Ross AcademyLyles Bakersfield College of BeautyLyles Fresno College of BeautyMadera Beauty CollegeMake-up DesignoryManchester Beauty CollegeMarinello School of Beauty-BakersfieldMarinello School of Beauty-Castro ValleyMarinello School of Beauty-ChicoMarinello School of Beauty-FresnoMarinello School of Beauty-HaywardMarinello School of Beauty-MurrietaMarinello School of Beauty-NapaMarinello School of Beauty-PalmdaleMarinello School of Beauty-ReddingMarinello School of Beauty-ResedaMarinello School of Beauty-San BernardinoMarinello School of Beauty-San MateoMarinello School of Beauty-San RafaelMarinello School of Beauty-StocktonMarinello School of Beauty-WhittierMarinello Schools of Beauty-BellMarinello Schools of Beauty-City of IndustryMarinello Schools of Beauty-HemetMarinello Schools of Beauty-Huntington BeachMarinello Schools of Beauty-Lake ForestMarinello Schools of Beauty-LomitaMarinello Schools of Beauty-Los AngelesMarinello Schools of Beauty-Moreno ValleyMarinello Schools of Beauty-ParamountMarinello Schools of Beauty-Santa ClaraMarinello Schools of Beauty-Simi ValleyMarinello Schools of Beauty-VictorvilleMarinello Schools of Beauty-VisaliaMarshall B Ketchum UniversityMarymount California UniversityMarymount University - Waterfront CampusMayfield CollegeMediaTech Institute-OceansideMedical Allied Career CenterMendocino CollegeMerritt CollegeMiami Ad School-San FranciscoMilan Institute of Cosmetology-FairfieldMilan Institute of Cosmetology-VisaliaMilan Institute-MercedMilan Institute-Palm DesertMission CollegeModern Technology SchoolMoler Barber CollegeMonterey Institute of International StudiesMonterey Peninsula College
- By State
- By City