Research Your Loan Before You Sign
A private student loan is something, unfortunately, many college students will need to complete the funding of there education. With all the many different banking and financial institutions out there this really is not such a difficult thing to obtain.
The college or university you will be attending can help you out tremendously by giving you there preferred list of private student loan lenders. Keep in mind though, you do not need to use any one on the list, it is just the schools preferred list. So first step, talk to the financial aid counselor in your school. They can provide much information.
The next step is to actually apply for the private student loan. In many cases you can simply do this online. If you are not comfortable doing that, you can always walk in to a financial institution and start the process going that way. When you are applying for a private student loan they will do a credit check. Unfortunately for many college students this causes an obstacle. This is a real loan not being backed (guaranteed) by the federal government so a credit check will always be done. They simply want to make sure you are credit worthy.
Many new college students have little to no credit at this point so you will need to obtain a co-signer. A co-signer is someone that is willing to sign on the private student loan with you. They are in essence guaranteeing the payments are going to be made. If you do not make the payments they will have to or great damage will happen to there credit history. Keep in mind the better credit your co-signer has the better your interest rate will be as well. Generally with most financial institutions the interest rate will be based off of the credit. So you not only have to find someone that is willing to take a chance on you and your ability to pay the private student loan back, but also someone that has good credit. If you chose someone that does not have good credit, you may not get the loan.
Another thing to remember about a private student loan is unlike a federal college student loan you may not be able to deferrer you payments until you have completed your schooling. You may be obligated to start paying on the private student loan within 30 days. Each lender will be different so you need to read the fine print before you decide to go with one financial institution over another.
Once you have been approved for the private student loan the funds will generally be sent directly to you via electronic deposit or check. Once again the different financial institutions will do things differently from each other. Usually this will be accomplished within 5 to 10 business days. Once you have received the funds you just need to be mature about all this cash and do the right things. Pay what need to paid and buy the supplies you will need for school. This is not the time for a vacation. You will have to pay it back, and in the end that would end up being an extremely expensive vacation.
November 21st, 2008 at 6:56 pm
What does deferring my loan payments mean?
November 22nd, 2008 at 11:57 pm
Deferring a loan payment means you are pushing the payments out and you are not currently paying. When one obtains a federal student loan they do not make payments until they have graduated or enrolled in less than half time. This would be a deferred payment. Hope that answers your question.