Alternative Or Private Student Loans
Alternative or private college student loans are designed to help college students who need additional assistance with there higher educational costs. In many cases, it is advantageous for college students to pursue Unsubsidized Federal Stafford College Student Loans and for parents to pursue Federal PLUS College Student Loans (or Grad PLUS College Student Loans for graduate college students) before seeking alternative or private student loans. One very major advantage of the federal student loan programs is that the federal government has caped the interest on the college student loans. Additionally, alternative or private student loans typically will not offer the same benefits as a federal college student loan will, such as consolidation, service cancellations and military repayment.
If you are still needing assistance beyond what has been made available to you through the federal college student loan programs is desired, there are a number of private student loan lenders or financial institutions who can offer alternative or private student loans to cover additional educational expenses. A Private Student Loan approval will most likely be based on the credit worthiness and ability to repay. Generally, for college students, a credit worthy, employed cosigner will probably be required. Each lender or financial institution will offer different interest rates, fees, repayment terms, and approval requirements. In order to get the best interest rates and terms, it is strongly suggested that you obtain a cosigner with a good credit history.
Your school of choice will have a list of approved lenders or financial institutions you can choose from. However, do keep in mind you are not required to use one of them on the list. It is important for you to know that the credit check that will be performed by many lenders will expire after 90-120 days. Therefore, you should not apply for an alternative or private student loan more than three months prior to the start of the college student loan period. However, due to possible extended processing time, you should apply as soon as you can within the three month window. In order for money to be available for payment purposes, applications should probably be submitted by June 1 for the fall semester, November 1 for the spring semester and March 1 for the summer sessions.
Most alternative or private student loan disbursements will be made via Electronic Funds Transfer from your lender to the college or university of your choice. The funds will be applied to the college student’s account with any excess, after all school fees are satisfied, and will be released to the college student.
I would encourage you to only borrow money that is needed. If the college student loan approval is more than you desire, you can always reduce the amount by contacting the Financial adviser and just changing the amount, or following the directions provided by the lender or financial institution on the disclosure statement you have receive.
We strongly encourage all college students who have borrowed through an alternative or private student loan program at other institutions prior to attendance your current school to retain their previous lender. This will help avoid making multiple college student loan repayments in the future.
