Private Student Loan FAQ's

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Information on The Private Student Loan FAQ's

Must I Apply For Financial Aid Prior To Applying For a Private Student Loan?

The answer is, “No!” However, as we have previously stated, you should use the private student loan as a last resource. Meaning that you have exhausted all other financial aid sources and avenues.

Are Private Student Loans Backed By The U.S. Government?

No, these loans are not guaranteed or backed by the U.S. Government.

What Paperwork Am I Required to Fill Out To Receive a Private Student Loan?

The lender will provide you with a Truth-in-Lending Disclosure Statement and Promissory Note; before you receive a final approval on a loan, you must sign and return this paperwork.

How Are Private Student Loans Disbursed?

Most lenders disburse funds by check or by (EFT) electronic funds transfer. For certified loans, funds are usually disbursed directly to the financial aid office at your school. For loans not requiring certification by the school, funds are usually delivered by check directly to the borrower or loan carrier.

When Do The Payments Start On a Private Student Loan?

Most private student loans have an in-school deferment period, which means that as long as you are enrolled in school at least half time, you don’t have to make payments on your loans. In addition, once you leave your program or graduate, some private student loans have a grace period of anywhere between 30 days and several months.

What Are The Eligibility Requirements For a Private Student Loan?

For starters, to be eligible for an educational loan you must be at least 18 years of age (19 in Nebraska, 21 in Puerto Rico & Mississippi). Mississippi residents under the age of 21 may borrow with written consent from a parent or guardian. And of course, good credit.

What if My Credit Score is Low?

If your credit score is low, some lenders may require you to bring a cosigner to the table. Most lenders require a borrower to have a strong credit score (good to excellent) in addition to other criteria such as no negative credit history (such as missed payments), debt-to-income ratio (amount of debt vs. your current income) and even proof of current employment and income. Others may still approve your loan, however, your interest rate and fees will be much much higher than normal.

Do I Need a Co-Signer for a Private Student Loan?

For federal student loans, such as: Stafford Loans and Perkins Loans, you don’t need a co-signer. However, with private student loans, you may want to apply with a credit-worthy co-signer to increase your chances of approval and possibly improve the rate and fees you are offered. Some lenders require you to apply with a co-signer regardless of your income or credit rating.

How Much Will The Private Student Loan Cost Me?

To put it simply, your costs will be: (Any fees + Accrued Interest) and of course you add the principal, (the amount you borrowed) to that total amount.

Private Student Loan