It is common to hear college students complain about their financial problems these days. Universities and campuses offer high-quality courses, but these courses usually cost a lot of money to take. Many times, students turn to student loans and other means of earning extra money just to help them complete their studies.
Sometimes student loans from the federal government are not enough to cover the cost of education. In this type of situation, you will greatly benefit from having a high credit score. Why?
If you have a high credit score, you won’t have much trouble applying for a private loan. A private loan is another alternative for students who lack funds for college. Most government-funded student loans are limited amounts, and private loans can help fill that gap.
Some students and parents turn to private loans because they need flexible repayment options. If your parents are the ones applying for your student loan, they are likely applying for a private loan for their parents to take out because government loan programs cannot be deferred.
Student loans provided by private lenders depend on the major of the student or the course the student is taking. One of the leading private student loan lenders is Citibank. Citibank offers the following student loans: College Student Loans, Law/Attorney Student Loans, Graduate Loans, Health and Career Loans, and Home Loans.
One important thing to remember about private student loans is that they cost more than government-funded student loans. But if you try to compare it to a credit card, it’s still less expensive.
Currently, the number of students choosing to take out private student loans is growing rapidly compared to federal loan programs. If this situation continues, in just a decade private student loans will exceed federal student loans.
Before you start considering a private student loan, make sure you’ve exhausted your federal student loan options. You should always try to measure things, because in a few years, you will have to start paying for them.
If you are looking at the interest rates charged by the private lender, you should also look at the fees that are charged. It’s good to follow this rule regarding interest rates and fees charged: A higher 1% interest rate is the same as 3% fees charged.
There are private student loans that have different repayment terms based on their APR, so be careful when comparing these loans. By far the best student loans are those with low interest rates (2.8%) and no fees. But this type of loan is granted only to students who have a co-signer who has a high credit rating. Therefore, very few students qualify for this loan.
Private lenders will generally require students to submit a certification from the school that contains information about the specific cost of their education minus any financial aid already received. Most private lenders do not disclose any information to students unless they apply with them. This is because it generally precludes comparison between private student loan lenders.
Remember, it doesn’t matter if you already have a government-funded loan. A private student loan can still help you with your educational financial matters. And do not forget that these loans are not free, that after you graduate and start your own career, you will have to pay these lenders.
