Alternative Student Loans
If a student or his or her parents do not qualify for federally funded loans, or if they simply require more money to meet the financial requirements of post-secondary education, there are many other options.
Private student loans, which come from private institutions such as banks and credit unions, are not guaranteed by the government. Their rate of interest, along with their terms and conditions, are set by the lender. In some cases lenders will not require any payments while the student is in school and may even offer flexible repayment options after graduation. However, private student loans’ specifics vary widely, so students should shop around.
Students and parents can also investigate other borrowing sources to cover the cost of education. One option is a home equity loan. The interest on these loans is also usually tax deductible.
Whether this is your first year at college or your last, you are bound to have unexpected expenses that you did not factor into your educational costs. Whether it is tutors, computers or software, books, last minute tuition hikes, or transportation needs – there are many flexible options to help supplement your student financial package as to help cover those expenses not met by your existing student financial package.
Generally a fast and easy application process, generous and flexible repayment terms, and competitive interest rates, most lenders goals are to help you achieve your education goals.
One applying for a Private Student Loan must provide a credit worthy application demonstrating a current ability to repay a loan. To determine if you are eligible to be approved as a credit worthy applicant ask yourself if you meet all of the criteria listed below:
• You must have an employment history of at least two years (if self-employed, have been in business for at least two years),
• You must have proof of current income (and you must maintain employment with same employer or in the same field while you are attending school)
• You must have a satisfactory credit history of at least 21 months,
• You must have resided at your current and immediately preceding addresses for a total of at least 12 months, and
• You must be a U.S. citizen or permanent resident and have resided in the U.S. for the previous two years.
If you are not able to check off all the above boxes, you should apply with a qualified co-signer who meets the established requirements. International students can apply, but must have a qualified credit worthy U.S. citizen or permanent resident co-signer .
Even if you meet the above established credit guidelines, it may be in your best interest to apply with a qualified co-signer.
Benefits of applying with a credit worthy co-signer may include:
• Increased chance of approval
• Lower origination fees
• Lower interest rates
• Smaller monthly payments
• Less interest paid over the term of the loan
Private Student Loan Borrowing Limits:
• Borrow annually up to the lesser of $40,000 or the estimated annual cost of attendance
• $130,000 aggregate maximum borrowing limit
• $1,500 minimum loan amount
• Undergraduate and graduate borrowers may borrow annually up to the lesser of the cost of attendance or $30,000 ($40,000 for certain schools where TERI has determined that the annual cost of attendance exceeds $30,000). Borrowers in Continuing Education and K-12 loan programs may borrow annually up to $30,000.
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