Private student loans — not just for tuition!
All the talk these days is about the higher costs of college tuition. But what often gets overlooked are all of the other college expenses that can make going to college more crushing financially.
However, most private student loans can cover virtually all kinds of college expenses, including:
- Room & Board
- Off-campus housing
- Registration fees
- Text books
- Laptop/Internet access
- Travel expense to get to and from classes
Who is eligible for a Private Loan?
Keep in mind that each private loan lender has certain eligibility requirements. However, for most private student loans, you must meet the following criteria:
• Must be creditworthy applicant or have a creditworthy co-borrower
• Must be a U.S. citizen, U.S. permanent resident, or international student with a qualified U.S. citizen or U.S. Permanent Resident co-signer
• Must be within age of majority by your state of residence (typically 18 years of age)
• May be a full time, half time, or less than half time (including continuing education) student
How can you qualify for a private student loan?
Because private student loans are made by private institutions such as a bank or other private lending institution, your ability to get a loan will be based on merit, specifically good credit, essentially, a high enough credit score. The availability of a co-signer with good credit is even better from the lender’s perspective because taking into account a co-signer’s good credit, your combined probability of repaying the loan is higher. So, the lender can be more likely to approve you for a private loan.
If you think about it, most consumer loans require collateral, such as a house or a car. If a borrower doesn’t repay the loan, then lender can repossess your property, so it can sell it to recoup the money it had loaned out.
In the case of education loans, there really is no collateral; i.e., how can a lender repossess your education? It can’t. That’s why lenders rely on a good credit record, since that is a strong indicator that you and/or your co-signer have a proven track record of repaying on your credit cards or other loans in a timely and responsible manner.
Co-signers with good credit can help you qualify for a private loan, lower your borrowing costs and improve your own credit score!
Because private student loans are based on merit, the rate you receive is based on your credit history and income. If you don’t have one or the other or both, that’s where having a creditworthy co-signer can be invaluable.
Since the loan amount and your interest rate will be based on several criteria, often a credit-worthy co-signer can help you qualify for a private student loan. In fact, a co-signer with good credit can help you obtain a private loan with a lower interest rate, saving you a ton of money over the life of the loan.
Another added benefit of a creditworthy co-signer is “guilt by association but in a good way.” This means that the timely, responsible repayment of your private loan under a co-signer arrangement will be a positive way to build up your own credit record.
For more information on Private Student Loans visit http://www.onesimpleloan.com/private_loans.asp
