Private Student Loans
Welcome to privatestudentloans.org, your source for information on private student loans, including how to find a co-signer and get approved for the money you need!
What are Private Student Loans?
Private student loans are credit-based loans that can help you pay for college. You can use private loans to pay for many different kinds of school expenses beyond just tuition, such as college room and board, books, lab fees, food, travel, a computer, and more.
Private student loans are not based on financial need, and you don’t have to fill out the FAFSA in order to qualify. However, you will need to qualify for the loan based on your lender’s eligibility criteria, which usually involves things like school enrollment status and your credit-worthiness (and if applicable, your co-signer’s).
When should you use Private Student Loans?
You should only consider using a private student loan once you have maximized other types of financial aid, such as college scholarships, grants and federal student loans. In order to access government financial aid and federal loans, you will need to complete the FAFSA every year and review the award letter that you receive from your school.
Once you have added up your total financial aid, you can calculate how much you still need to pay for college and apply for private student loans to cover any gaps. You can use the calculators listed below to help you figure out approximately how much you need to borrow:
What do you need to Apply for Private Student Loans?
You can easily apply for a private student loan online using College Loan Corporation’s fast and secure application process. Before you get started, gather the following information:
- Social Security Number
- Driver’s License
- Income Information
- Requested Loan Amount
In order to complete the application process and get approved for private student loans, most students will need to add a credit-worthy co-signer. Unless you have a long-standing credit history and significant income, you will need to find a parent, relative or family friend to assist you by co-signing.
How to Find a Co-signer for Private Student Loans
Many students first ask their parents to help them borrow private student loans by becoming a co-signer. If your parents have less than stellar credit, or do not currently have verifiable income, you might have to find another adult, like a relative or family friend to help you get the money you need. Asking someone outside of your immediate family to share the responsibility of your student loan debt can be difficult. When speaking with your potential co-signer, make sure you highlight the following points:
- The loan money is necessary for you to continue your education
- You have already exhausted all other forms of financial aid, including scholarships, grants and federal loans
- You are only borrowing what you need
- You plan to be responsible when paying back the loan, so as not to impact your co-signer’s credit
Some private student loans offer a co-signer release option. If you select a loan with co-signer release, after you make a certain number of payments on-time you can apply to have your co-signer released from the loan. Just be aware that most lenders will not release your co-signer from their obligation until you can prove that you have verifiable income and a positive credit history of your own.
Sometimes, it may also be helpful to go through your college budget with your potential co-signer to show him/her that you have a responsible plan for keeping your college expenses to a minimum.
For more information on finding a private loan co-signer, check out the following resources:
Private Loan Repayment Advice
It’s a good idea to maintain a plan for repaying your private student loans. If you borrow more loan money every year you are in college, you should make sure you understand how that will impact your student loan payments after college. When you take out private student loans, make sure you also understand your repayment obligations such as:
- Will you need to make any payments in-school?
- How long after graduation will your fully amortizing payments begin?
- What kind of repayment and deferment options come with your loans?
Once you understand how to manage your student loan debt, you can start to craft your plan for life after college:
- Will you need to live at home or can you get a place of your own?
- Will you need to have roommates or can you afford to live alone?
- Will you be able to afford a car in addition to your student loans?
- Approximately how much will you need to earn to live comfortably and is this realistic for your field and the current job market?
If you struggle to make monthly payments on your private student loans, you might also look into private student loan consolidation. If your current private student loans have high interest rates, you might be able to consolidate your loans at a lower rate. Also, private loan consolidation may lower your monthly payments by extending your loan term.
The interest rate and fees on a private consolidation loan are based on your credit-worthiness, similar to when you took out your original private student loans. If you do not currently have verifiable income, or a strong credit history, you may again need to find a co-signer to help you get approved. Even though it may be difficult to find someone to assist you with co-signing loans after you’ve graduated, there is good news if your parents or another person helped you by co-signing multiple private loans in the past. Those private loans show up as several trade lines on your co-signer’s credit report. By consolidating those loans into a single private loan consolidation, your co-signer may experience an improvement in his/her credit.
101 Ways to Pay for College
Looking for creative ways to pay your college bills? We’ve put together 101 of them! If you are a college student or parent, 101 Ways to Pay for College will help you to reduce expenses, manage your college budget and earn extra cash.