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.
With education costs continuing to increase year on year it is becoming increasingly difficult to source the funds necessary for a college education and more and more students spend more time thinking about raising the money needed than they do working at their studies. As if this was not bad enough in itself all too many students find that once they have graduated they are saddled with so much loan debt that it quite simply drags them down and will probably take many years to pay off. Now, if this seems to be a grim picture then for a lot of students the problem of funding an education is compounded by a requirement to raise the funds needed without having a cosigner to their loan applications.College funding today is not simply a matter of turning to one single source of finance for the majority of students but is a matter of creating a portfolio of funds from various different sources.The first action for every student must be to try to find scholarships and grants. Far too many students simply ignore this source of effectively free money altogether and yet it is surprising just how many scholarships and grants are available today. In a lot of cases of course the sums of money in question are reasonably small but nonetheless can be very useful as one part of your total funding plan.The next source of funding should be federal loan funding through schemes such as Stafford and Perkins loans which you can get as both subsidized and unsubsidized loans. Perkins loans especially useful because of their low rate of interest but are also the hardest loans to get and require a student to demonstrate particular financial need.Regrettably at this point although you will have begun to build your portfolio it is unlikely that this will give you enough funds and you will now need to begin casting your net wider and will have two paths to follow.If you can get the help and support of either a parent or guardian then they can apply for a federal student PLUS loan to cover the shortfall between the money you have been able to find yourself and the overall cost of attending college. Student PLUS loans are conditional upon the guardian or parent having a reasonable credit rating but the requirements are generally not as stringent as those which would be applied by a private lender.If you do not have a guardian or parent you can turn to or simply decide to go it alone then you will need to seek a private loan and just how easy that will be will depend to a large extent on your personal credit history. In the majority of cases private lenders will be quite happy to offer you a loan as long as you have a good credit rating and will require you to have a cosigner if you do not have a credit history against which they can make their decision or have a bad credit history. However, with more and more people with a poor credit history nowadays there is also an increasing number of private lenders who are prepared to offer loans without the requirement for a cosigner and so it is simply a question of shopping around.A bad credit loan with no need for a cosigner will of course be more expensive than a normal good credit loan although if you take your time and shop around carefully you will find a loan at a fair rather than extortionate interest rate.
All of the related expenses for obtaining a higher education can catch a family off guard if financial preparations were not made in advance. Some students apply themselves early and make grades throughout high school that makes them eligible for a full scholarship, often to the college or university of their choice.For students who do not have the benefit of a full scholarship, their parents will have to find alternative methods for paying for their college expenses over the next four years. Uncertified private student loans are one way that this is accomplished.Certified versus Uncertified Private Student LoansBefore applying for any type of college loan, it is best to have a clear understanding of the type of loan you or your child will receive. In general, private student loans are necessary when the standard financial aid such as Pell grants and Stafford loans are not enough to cover education related expenses. These expenses may include tuition, books, computers, and dorm fees.Both certified and uncertified loans can be used for these expenses. However, the primary difference between the two is that the certified loan requires that the institution where the student will attend verify the amount before funds are disbursed. The amount borrowed cannot exceed the total cost of attendance, minus other financial aid that the student receives.Uncertified private student loans do not require certification from the institution regarding the amount borrowed. Schools generally will not certify loans that are in excess of the total cost of attendance.Additionally, uncertified college loans are disbursed to the student or person borrowing the funds. As with any loan, it is best to borrow only the needed amount because all funds must be repaid after graduation.Although uncertified loans have fewer restrictions, a student may need a cosigner before the loan is approved. The borrower’s credit score and creditworthiness determines whether or not this type of loan is granted.Advantages of Uncertified Private Student LoansThere are a few advantages to getting an uncertified private student loan to help pay for college expenses. The procedures for applying are simplified. The terms of the loan is relaxed with competitive interest rates. The borrowing limits are higher for private student loans than they are for federally guaranteed student loans. As with federal loans, private loans may also be deferred while the student is enrolled in school.