Private Student Loans The 21st Century Educational Lending Option

Private Student Loans The 21st Century Educational Lending Option
By: Jerry Work

Private student loans are designed to provide additional money when a student has exhausted other types of federal loan programs. Its no secret that government-backed educational funding is getting harder to come by. For that reason, the U.S. is experiencing very rapid growth in private student loan lending a much higher rate of growth than federal student loans. It is very likely that within a decade private student loan volume will exceed federal student loan volume.

Private loans usually are provided by the institution of education or a private lender of the students choice. Accordingly, the interest rate and other criteria of the loans will vary based on the individual student and lender. Generally, a student with poor or little credit history will be able to get a better rate with a co-signer, just like any other type of loan. For borrowers with excellent credit (or co-signers with excellent credit) it is possible to get an interest rate that is competitive. There are five types of private loans, and each is based on the financial history and needs of the student borrower.

The Signature Student Loan is used after federal loans such as the Stafford loan have failed to cover all costs of the students education. Signature loan approval depends on the students credit rating and academic standing. The advantages to this type of loan are its high approval ratings and the ability to borrow as much as is needed to pay for schooling.

The Tuition Answer Loan provides readily available money in the amount of $1,500 to $40,000 per year, depending on the borrowers credit standing and a creditworthy cosigner. Further advantages of the Tuition Answer Loan include no required collateral, tax-deductible interest, and choice of repayment options.

The Community College Loans high approval rating and flexible repayment duration make it an attractive loan for those students attending a two year institution in search of an Associates degree. Applicants must be in good academic standing, and good credit will help to keep loan interest payments reasonable.

Continuing Education Loans provide funds for postsecondary students not pursuing a degree program or for part-time students who are gradually pursuing a degree. Borrowers with good credit or students with a cosigner will benefit from competitive interest rates and repayment schedules as long as 15 years.

The Career Training Loan is an attractive loan program for borrowers who need funds for technical training schools, trade schools, continuing education programs, or distance learning courses. This loan is especially beneficial to those with good credit or a qualified cosigner.

There are now many private student loan lenders, each of which offers loans to fill particular needs. For instance, some loans can be used specifically for the purchase of a computer, and other loans can be used specifically for study abroad. Care should be taken to look for loans that fit the particular needs of the student. Some loans can even be used to pay for previous school charges.

Private student loans can be consolidated, although the process really just replaces one student loan with another. Two advantages of doing this are that the borrower can end up with a single payment, rather than making multiple payments, and if the borrowers credit rating has improved since the initial borrowing, he may qualify for a better rate.


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About the Author:
Student Loan Financial Group () makes life easier for students with its Quick-To-Learn private student loan product. Our online application only takes about 15 minutes, and you get an answer within a week.