Financing a college education is not easy, with college fees anything but cheap. While it is possible to get government sponsored financial aid, not everyone is successful because of the quota system reserving funds for those in most need. For many, private student loans are the only option open to them.
Of course, there is nothing wrong with the private loan option, but securing this kind of funding is dependent on the same criteria to getting any other kind of loan. So, an applicant needs to have certain aspects in good order if college loan approval is to be achieved.
There are problems with this since students usually have little income to speak of. But there are student loan options to consider that can help in finding the right loan deal at the best possible terms. Compromises may need to be accepted, but the funds at least can be secured.
1. Find a Cosigner
Since the biggest issue for lenders is the certainty of receiving the monthly repayments, the addition of a cosigner to the application can prove invaluable. A cosigner acts as a guarantor, assuring the lender that payments on the private student loan will be made, even if the student is unable to make them.
The most common cosigner for students is their own parents but extended family members and even friends are acceptable too. However, to stand a chance of getting college loan approval, the cosigner must have an excellent credit history. Ideally, they should have a score of 700 or more, and have a large enough income to cover the repayments if that becomes necessary.
But if a suitable candidate can be found to cosign on the student loan, remember that failure to pay will put pressure on them. So, be clear that the obligation still rests on the shoulders of the applicant.
2. Search the Internet
The Internet has changed many things about how we go about securing financing. The development of comparison sites means that finding the best possible deals, even for private student loans, is fast and easy, with the best of thousands listed clearly before us.
Online lenders are widely recognized as experts in bad credit lending, so those who have very poor credit histories are more likely to get college loan approval from them than they are from traditional lenders. And they charge the lowest interest rates and offer the most flexible repayment schedules.
Still, it is necessary to read the small print on any possible student loan deal to see if there are any hidden charges. And check the reputation of the lender on either the Better Business Bureau or the Verify1st websites before agreeing to anything.
3. Tend To Your Credit Rating
Another valuable move to help in securing a private student loans is to set about improving your own credit score. This improves the terms of the possible loan, making it more affordable. There are several ways to do this, but starts with getting the credit report to identify where the weaknesses lie, and have any errors in the report corrected.
Paying off existing debts is the best way to increase the score. But to do this, a series of small, quickly repaid loans are required. Alternatively a larger consolidation loan can be taken out, significantly reducing the monthly repayments. By freeing up more cash for repayments on the college loan, approval is more likely.
Another option to improving the credit score is to take out a student credit card several months before and make repayments on time. This establishes a good repayment habit and so getting a student loan become that bit easier.