Private
Student Loans – dispelling the myths
by: Vanessa McHooley
Private
Student Loans – dispelling the myths
If
savings, grants, scholarships, and federal loans don’t
cover the cost of your education, it’s time to turn to
private loans. But young college students can’t qualify
for a private loan, can they? Wrong! This article
addresses this and other myths about student loans that
you may run into.
I don’t
have any collateral, so I can’t get a private loan.
Private
loans are usually unsecured, which means no collateral
is required. On the downside, this may also mean a
higher interest rate.
I don’t
have a good credit history (or no credit history at all)
Since
the government doesn’t back private loans, your credit
history is a consideration in being approved for a loan.
If your credit history is bad or non-existent, you may
be subject to a higher interest rate. And remember, you
can always get a co-signer. Pay your loan off on time,
and soon you will have a good credit history!
I have
enough funds for tuition and fees, so I can’t get a
private loan
In
addition to paying tuition and fees, funds from private
loans can be used to cover living expenses, supplies,
computers, and other everyday living needs.
I can’t
afford to make payments on a loan while I am still in
school
For most
loans, your principal and interest payments can be
deferred while you are enrolled in school. Another
option is to make interest payments while you are in
school but defer paying off the principal. Your interest
payments might even be tax-deductible!
I missed
the deadline for applying for financial aid this year
You can
apply for private student loans any time – there is no
deadline. Depending on the financial institution you
choose, you can be pre-approved in minutes and have the
money (which will be sent directly to you) within a
matter of days.
I don’t
have a bank to apply through
Private
loans are offered by thousands of banks, credit unions,
and other financial institutions. Just search the
internet for “private student loans” and you will find
many places to apply to.
If you
need the additional funds provided by private loans,
don’t let myths and misconceptions keep you from
applying!
This
article is distributed by NextStudent. At NextStudent,
we believe that getting an education is the best
investment you can make, and we're dedicated to helping
you pursue your education dreams by making college
funding as easy as possible. We invite you to learn more
about Private Student Loans at
http://www.NextStudent.com.
