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Private Loans

Private Loans
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Private Loans are taken to pay for tuition, books, room and board and other expenses which the student incurs while in college which may not be related to education. These may include rent, transport, buying a personal computer and supplies. The student may buy clothing furniture, a car, food and pay for other expenses.

Education has become expensive and one source of college finances may not be adequate. Private loans can be used to pay for the cost of education of the entire education attendance for those who can afford to pay. However most students and parents apply for College Financing/Private Loans after exhausting grants, scholarships, work-study and federal loans. Whatever has not been paid by these sources of finance can be paid for by these private loans.

There are many sources of private loans but the main ones are banks and financial institutions. The interest rate may be fixed or variable and it is determined by the lender. The parents of students in colleges or universities may borrow the loan using their credit-worthy history. Credit rating is an important aspect which is considered. If the parent does not have good credit history a co-signer can agree to pay the loan if the parent fails to pay. This affects the co-signers credit but most lenders release the co-signer after several on-time payments by the borrower some after 12 months or 24 months or any other time which depends on the lender.
Students without income can apply for private loans using their parents as co-signers. Students whose income and credit history is not strong enough to support the loan can also ask their parents to co-sign the application. This will make them get the loan approval and qualify for lower interest rates. When the loan is approved they may get the loan within a shorter period which will make them able to pay for tuition and fees and also room and board, books, supplies, transport and buy a computer. They will also pay for other expenses which are not funded by the Federal Financial Aid and Federal Loans. All these loans will make the students’ stay in school manageable.

There are different College Financing/Private Loan Lenders with different terms. These include and are not limited to-:

- Well Fargo
- Sallie Mae
- US Bank
- Citizens Bank
- Charter One
- PNC
- Sun Trust
- Discover
- Union   

These Lenders offer Loans at their own terms and conditions. Some charge low interest rates and no orientation fees. They give discounts when the borrower pays in time, uses automatic payment systems deducting the repayments directly from the bank account and reduction rewards at graduation. Most of them have deferment options and allow the students to start paying when they finish school. The interest rates differ depending on the credit history of the borrower. There are different repayment options and the applicants are able to choose the option that is best for them depending on their financial situation.

Last modified onTuesday, 02 April 2013 15:59

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