It is common to hear college students complain about their financial problems today. Universities and campuses offer high-quality courses, but these courses often cost a great deal of money to take. Students often turn to student loans and other means of earning extra money just to help them complete their studies.
Sometimes federal student loans are not enough to cover the cost of education. In this type of situation, you will benefit greatly 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 their funds for college. Most government-funded student loans are limited in 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 to apply for a private loan that your parents can get because repayment from government loan programs cannot be deferred.
Student loans from private lenders depend on the major or course the student must take. One of the leading private student loan lenders is Citibank. Citibank offers the following loans to students: undergraduate loans, law firm / attorney loans, graduate loans, health and career loans, and residency 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 is still less expensive.
Currently, the number of students opting for private student loans is growing rapidly compared to federal loan programs. If this situation continues, in just a decade, private student loans will overtake 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 from now, you will have to start paying them back.
If you are looking at the interest rates that private lenders charge, you should also consider the fees that are charged. It is good to follow this rule regarding interest rates and fees charged: a 1% higher interest rate is the same as fees charged at 3%.
There are private student loans that have different repayment terms based on your APR, so be careful when comparing such loans. The best student loans are by far the ones with low interest (2.8%) and no fees. But this type of loan is given 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 their specific educational cost minus financial aid that has already been received. Most private lenders do not disclose any information to students unless they submit an application. This is because it generally 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 affairs. And don’t forget that these loans are not free, that after you graduate and start your own career, you will have to repay these lenders.