Best Private Student Loans For College

0
135

Most of the time we equate student loans only with Federal student loan programs. These are based more on the basis of need rather than credit history and are not always an option for all students.The best private student loans for college are those that offer the lowest interest rates or have a partial forgiveness clause. For example, some private student loans offer up to a certain dollar amount reduction, contingent upon graduation. This is typically around $300 and applies to principal reduction, not interest.Quite simply, the best private student loans offer the lowest possible interest rates and some sort of deferment. You can choose (depending upon the lender) to have payments deferred until after graduation, or to make interest-only payments during the time you are enrolled in an educational institution. Others offer a grace period of up to six months after graduation, during which time no payments are due at all.As to the lowest interest rate, that will of course vary from lender to lender and will depend upon several factors. The best private student loans are offered by lenders who look at good credit ratings, and the minimum period of time that most lenders will consider is 27 months. This means that the borrower must have at least a 27 month history of good credit, with no late fees or defaulted payments.Most of the private student loans require a co-signer, unless the student is in graduate school. The primary reason for this is, simply, that a typical college student is one who has just graduated from high school and therefore will not have had time to build up a credit rating of any sort due to the requirements of age. No one can enter into a contract unless they are a minimum of 18 years of age, and in some states that requirement is as high as 21 years of age.This means that a co-signer will be necessary, even with the best private college loans. A co-signer is someone who, along with the primary borrower, agrees to sign for a loan, accepting the responsibility for payment of the loan should the primary borrower default.As with any financial arrangement, you should shop around for the best private student loans. Keep in mind that these are intended strictly for educational purposes, but can be flexible enough to include books and supplies necessary for attending college.