What really is a private student loan? essentially a private student loan is used to help cover college-related expenses, these could include things like tuition fees, books, and supplies but it could also include things like your housing and which could actually be even on or off-campus housing transportation and other types of items a good place to look at what’s considered a college-related expense maybe take a look at your schools to determine the cost of attendance for your particular program in your particular situation
When Applying For Financial Aid
although you do not need to complete the FAFSA in order to apply for or qualify for a private student loan it is always recommended that the FAFSA form is used to not only determine the federal student aid Awards available it’s also used to determine if there are any state or institutional financial aid that can be offered to you so you just don’t want to miss out and don’t forget to ask your financial aid office if there are any other forms that you should be completing.
Also Read: What Is A Private Student Loan
What To Look For After FAFSA
After you’ve completed the FAFSA your school should be sending you a financial aid offer letter, you really want to sit down and evaluate what that says look at what’s on here look identify those scholarships identify those grants, and then go through the loan options and then with each loan even though it sounds like a lot of work I swear to you it’s not too bad you want to look up those terms and conditions what are the interest rates what are the terms and conditions just so you have an idea of what you’re working with.
Private student loans actually come into the picture when you have either determined that maybe you want to see if there’s a loan out there with more beneficial terms for you like a lower interest rate or no origination fee or if after all the financial aid you’ve received you still have a financial gap there, they’re still going to be some money that you need to come up with on your own that maybe you don’t have in savings or a way to pay now it’s time to go find the private student loan that makes sense for you.
Looking For Lenders
There are a lot of lenders out there so I would recommend going to a site like privatestudentloans.com which will allow you to compare some lenders who offer private student loans.
What To Compare When Looking For Lenders
What you’re looking to compare here are interest rates you also want to see if they have origination fees many private student loan lenders will offer low to zero origination fees or loan fees depending on your credit. You also need to look at some of the repayment terms and what type of repayment options are available to you what happens if you make a late payment? or what happens if you get in a situation where you need to postpone your payments for a little bit of time that’s known as a forbearance option.
Additional Terms To Look Into
Other terms you want to look into are to see what happens if you become disabled or if this is the worst thing to think about if you happen to pass away, will the loan be discharged are there options available to you?
If You Need A Cosigner
if you need a cosigner make sure that there is a cosigner release option, cosigner release essentially means if you meet certain terms of conditions which could be making a certain amount of payments on time for a certain period of time you can actually release your cosigner from the obligation of that loan so if you have a cosigner I’m sure that’s important to you as well as your cosigner.
Read Also: How To Refinance Private Student Loan
other benefits you want to look into are whether is there anything you can do with that interest rate once you enter repayment for example many private student loan lenders will actually offer an interest rate deduction if you set up automatic payments on your loan, now you’ve already determined that you would like to look into private student loan options and you’ve already compared and picked the lender that makes the most sense for you, you actually want to complete that at your application with that lender once the lender determines you’re qualified for the loan they’ll let you know some of the terms and conditions and that actual interest rate that would be set for your particular loan, chances are you get an option to pick either a fixed rate or a variable rate.
if you’re having trouble qualifying on your own your lender would likely offer you the ability to reapply with a credit-worthy cosigner to help you through and if you’re an undergraduate student this actually isn’t very uncommon over 90% of students who are looking to borrow private student loan as an undergraduate actually do need a cosigner,
What Your School Will Verify When You Apply
Your school actually has to be involved your school will actually be the one who will certify the total amount that you are asking to borrow, and your school will actually certify that the amount you’re going to borrow is not going to exceed your cost of attendance minus all other financial aid received.
Once Everything Is Completed & Approved
once that’s all complete and you’ve been approved and your school certified that amount now it’s time for the loan to be dispersed to you your loan funds will actually go to the school first and they’ll apply it to any outstanding charges you have with them and then they’ll handle the process of getting any overpayment at the school to you