Although most students who get a loan for college apply for federal student loans, it may be helpful to consider private sources of funding as well.
While the federal loans usually have lower rates of interest because the rate is subsidised and the loan is guaranteed by the government, the process can be cumbersome and you may need more than what you qualify for.
Private student loans can often be used to supplement the federal student loans, especially when federal student loan funds cannot meet the full cost of education.
But there are some important things to consider before loading up on them.
Private student loans can act as a reasonable supplement to whatever federal loan programs you are using.
These private loans are offered by banks, credit unions and other financial institutions.
Your ability to borrow is not determined by need, but by your and your co-signers' ability to repay, your creditworthiness.
Applying for a private student loan is very streamlined and the whole process can be over in as few as fifteen minutes.
Alternative or private student loans usually get their funding from private financial institutions and are not subject to federal guidelines.
The money borrowed can be used to cover tuition costs as well as many other education-related expenses.
Keep in mind that federal student consolidation loans can't include loans you may have received from banks, credit unions, personal loans, consumer debt loans or any other type of financial service loans you may have applied for in the past.
For this reason it is important to seriously consider how much you really need for college, so that you are not overburdened with student loan debt after graduation.
This applies to both federal and private loans, but even more so with private loans, since you will not be able to consolidate them with a federal program later.
Nevertheless, with college costs steadily escalating and the number of students waiting for federal loans also increasing, there is little wonder that private student loans are becoming the fastest growing source of funds for U.
S.
college education.
Many families find the private student loan a convenient as well as simple way of getting the money required to cover college education costs.
While the federal loans usually have lower rates of interest because the rate is subsidised and the loan is guaranteed by the government, the process can be cumbersome and you may need more than what you qualify for.
Private student loans can often be used to supplement the federal student loans, especially when federal student loan funds cannot meet the full cost of education.
But there are some important things to consider before loading up on them.
Private student loans can act as a reasonable supplement to whatever federal loan programs you are using.
These private loans are offered by banks, credit unions and other financial institutions.
Your ability to borrow is not determined by need, but by your and your co-signers' ability to repay, your creditworthiness.
Applying for a private student loan is very streamlined and the whole process can be over in as few as fifteen minutes.
Alternative or private student loans usually get their funding from private financial institutions and are not subject to federal guidelines.
The money borrowed can be used to cover tuition costs as well as many other education-related expenses.
Keep in mind that federal student consolidation loans can't include loans you may have received from banks, credit unions, personal loans, consumer debt loans or any other type of financial service loans you may have applied for in the past.
For this reason it is important to seriously consider how much you really need for college, so that you are not overburdened with student loan debt after graduation.
This applies to both federal and private loans, but even more so with private loans, since you will not be able to consolidate them with a federal program later.
Nevertheless, with college costs steadily escalating and the number of students waiting for federal loans also increasing, there is little wonder that private student loans are becoming the fastest growing source of funds for U.
S.
college education.
Many families find the private student loan a convenient as well as simple way of getting the money required to cover college education costs.
SHARE
