Private Student Loans
When Federal financial aid falls short… consider a private student loan or often called alternative student loan.
Whether this is your first year at a college or university or your last, you are bound to have “surprise” expenses that you did not factor into your educational costs. Tutors, computers or software, books, last minute tuition hikes, transportation needs - a private College Loan is a flexible supplement to your student aid package to help cover those expenses not met by your existing student aid package.
With a fast and easy application process that most lenders will require, generous and flexible repayment terms, and competitive interest rates, these things can help you achieve your education goals.
Some Common Private Student Loan Credit Guidelines and Recommendations
A credit-worthy applicant demonstrates 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 (note: below are examples and do not apply to all lenders):
• 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 in some cases, depending on the lender, but must have a qualified credit-worthy U.S. citizen or permanent resident co-signer.
What are the benefits of applying for private loans with a qualified 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
A co-signer, also known as a guarantor, is an individual who agrees that they will pay any debts if the primary account holder is unable to. A co-signer leverages their credit rating and reputation on behalf of the borrower to allow the borrower to obtain a private student loan they might otherwise be unable to get. Very often, co-signers are parents or other family members, assisting children to obtain their first line of credit, as most lenders will not lend to people with no credit history. Co-signers cannot use the line of credit; they are merely guaranteeing that any debt will be paid.
Co-signers:
• Provide information about the borrower
• Are responsible for the loan if the borrower fails to make payments
• Do have their credit rating affected by the loan
• Cannot use the loan funds (in most cases)
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Note: as lenders vary, so do their rules and restrictions on exact facts on their specific private student loans. Be sure to check with your lender regarding ALL THE FACTS in reference to their specific loan programs.