It is common to hear college students griping about their financial problems today. Universities and campuses are offering high quality courses, but these courses usually cost a huge amount of money to take them. Often times, students resort to student loans and other means of earning extra money just to help them complete their studies.
Sometimes, the student loans that are granted by the federal government are not enough to cover the cost of one’s education. In this kind of situation, you will benefit greatly from having a high credit score. Why?
If you have a high credit score, you will not have much of a problem applying for a private loan. A private loan is another alternative for students that lack in their funds for college. Most student loans financed by the government are limited amounts, and private loans can help fill that gap.
Some students and parents turn to private loans because they need flexible options for repayment. If your parents are the ones applying for your student loan, they will likely apply for a private loan to be taken out by your parents because repayment of government loan programs can not be deferred.
Student loans granted by private lenders are dependent on the student’s major or course to be taken by the student. One of the prominent private student loan lenders is Citibank. Citibank offers the following loans to students: undergraduate loans, law/bar loan study, graduate loans, health and professions loans, and residency loans.
One important thing you need to remember about private student loans is that they cost more than government-funded student loans. But if you try to compare it with a credit card, it is still less expensive.
Currently the number of students choosing to get private student loans is rapidly growing 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 that you have already exhausted your federal student loan options. You should always try to measure things out, because in a few years from now, you will have to start repaying them.
If you’re looking at the interest rates charged by private lender, you should also look into the fees being charged. It is good to stick with this rule concerning interest rates and fees charged: an interest rate 1% higher is the same as 3% fees charged.
There are private student loans that have different terms of repayment according to their APR, so be careful when comparing such loans. The best loans for students by far are those which have low interest (at 2.8%) and charge you no fees. But this kind of loan is granted only to students having a co-signer who has a high credit rating. Hence, very few students qualify for this loan.
Private lenders will usually require students to submit a school certification which contains information regarding their specific education cost minus the financial aid that’s already been received. Most of the private lender does not disclose any information to students unless they file an application with them. This is because it usually prevents 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 in your educational financial matters. And don’t forget that these loans don’t come free – that after you graduate and start your own career, you will have to re-pay these lenders.