Private Student Loans are available to students that need financial assistance to obtain their degree and yet are either unable to receive Federal funding or, are in need of additional funding beyond the amounts which received from Federal funding. There is a growing trend towards Private Student Loans which is increasing at a rate of 25% every year.
Interested in applying for a Private Student Loan?
It’s suggested that student that wish to receive funding for a college education first exhaust all efforts in obtaining Federal Student Loans before applying for Private Student Loans. Furthermore, the applicant should file their FAFSA, to determine if there are any other types of student aid programs for which they qualify.
Some of the benefits to Private Student Loans are:
Fast application process – The time that it takes for determination on Private Student Loans is typically very quick and at times may be done within a few minutes.
Flexible payment options – Undergraduate students may choose to defer the payback of the interest/principal until after graduation; there are also options available to begin paying Private Student Loans back immediately, or for a limited deferment period.
Easy qualifications – The skills required to be accepted for Private Student Loans are significantly easier than with the FFELP and Direct Loan program Loans.
Affordable monthly payments – For students who choose to start paying their Private Student Loans while still attending college, the fees are relatively affordable.
It is important for students that are interested in receiving Private Student Loans first to consider all of their options for Federal Student Loans. Private Student Loans are not guaranteed by a government agency and are provided by banks, lending institutions, and finance companies.
Industry professionals also recommend that students who receive Private Student Loans do so in combination with one of the Federal student aid packages to reduce the higher loan costs associated with private funding. Students that are interested in receiving Private Student Loans should also be aware that there may be a one-time, loan origination fee, based on the amount of the loan which the student will be required to pay as well.
A Welcome Relief – Student Loan Consolidation
Most college graduates are dreaming of home ownership. They’re thinking of buying a fancy new car and whatever more their new spending power allows. Those dreams are usually short-lived, at least for most students, when they get confronted with the reality of paying back their student loans. Student loan consolidation may then furnish a welcome lifeline to students who look for a way out of this often insurmountable debt.
The Consumer Financial Protection Bureau reported in 2015 that the outstanding student loan debt totaled more than $1.1 trillion. More Than One Trillion! That’s even more than what all credit card holders in the U.S. are owing! This alone is already conveying how BIG this problem of student loans is!
Last year, students took out a whopping $120 billion in federal loans alone, so not including private loans, and to be honest, they had no other choice. Without these student loans, the already staggering cost of public (not to mention private) education would put a college degree even further out of the many citizens’ reach.
Student loan consolidation gives many students the option to place several loans into one new account with lower interest rates, thus lowering their monthly loan payment. Be aware, though, that student debt consolidation won’t lower your interest rate on Federal loans any further. The benefits of consolidation will serve graduates possibly well in the long run. If they can renegotiate the terms on their loans, they will be able to make their payments on time and without any defaults. It will improve their credit scores over time as well as their financial outlook, and this gives them a far better quality of life.