Alternative College Student Loan Benefits
With today’s rising college tuition costs, together with limited government financial aid assistance, there has become a widening gap between the cost of college and the ability to pay for it. A private or alternative student loan can help to fill that gap, allowing the college student to borrow the difference between school expenses and Federal financial aid assistance such as the Stafford College Student Loan. This means fewer out-of-pocket expenses until after you have graduated.
If you have concern’s about being approved for a private or alternative student loan, or you do not have 27 months of credit history, this would be a good time to consider strengthening your chances by using a cosigner. A cosigner can greatly improves your chances of being approved for a private or alternative college student loan while lowering your interest rate on the loan.
What Are The Benefits of A Private or Alternative Student Loan?
• Deferred payments while in school and for a six-month grace period after graduation
• Possible Graduation Reward - $300 principal reduction on private or alternative student loan upon graduation
• May not have any up front fees!
• Possible lower interest rate by 0.25% when you have chosen to have your payments automatically deducted from your personal bank account
• Interest rates as low as one month London Interbank Offered Rate (LIBOR) + 2.5%,
• You can borrow up to the cost of education minus any financial aid assistance received
What makes one eligible for a private or alternative college student loan?
• Must be enrolled at least half time at any eligible school.
• Must be a U.S. citizen or permanent resident or have a co-signer who is.
• You must of legal age of majority or at least 17 years of age with a co-signer who is of legal age of majority.
• Most borrowers of college age will need a co-signer. Borrowers without a co-signer must have at least 27 months of the established credit history.
So, what is a private or alternative college student loan?
Unlike Federal College Student Loans, private or alternative student loans are specialized education college student loans based on ones credit history and income and should really only be considered after all federal college student loans, grants and scholarships have been exhausted. Lenders will generally give a better term for the better credit history. Many lenders and financial institutions will also allow a co-signer, which could help you qualify for a much better interest rate.
What will private or alternative student loans be used for?
Private or alternative college student loans can be used for education related expenses such as tuition, books, transportation and even room and board or rent.
Who can apply for a private or alternative college student loan?
A college student must apply for the loan, however since many college students will not have sufficient credit history, they will probably need a credit worthy cosigner to increase the chances of getting a private or alternative college student loan.