What are The Best Private Student Loans
Private student loans are valuable financial tools that can help you cover your tuition and other college expenses. These loans come with flexible repayment terms and low-interest rates making them affordable to more people. Some of these loans will even come with extra perks such as career coaching. Before considering a private loan, it is always advisable that you exhaust all your other options. Make sure that you have gone through alternatives such as federal loans, and other financial aids. This is because even though some private loans have some really favorable terms, they are still more expensive than both subsidized and unsubsidized federal loans.
Choosing a Private Student Loan
There are various private loans that you can apply for, but each lender tends to attach different terms on their loans. Consequently, this makes some loans better than others. We also cannot ignore the fact that students have different financial needs. While a certain loan may be perfect for a particular student, it may not be right for you due to your specific needs. This is why you need to be extra keen and ensure that you are fully aware and comfortable with the loan you are getting and its terms.
That said, the following are some of the critical factors you need to go through before signing on that dotted line:
a. Interest Rate – The last thing you’d want as a student is to spend lots of years after your graduation paying back some private loan. This is precisely what will happen if you are not careful enough to ensure that the loan you are applying for has reasonable interest rates. Take your time and go through all your loan options and try as much as possible to get one with the lowest interest rate possible.
You will also have to choose between a fixed and variable interest rate. Fixed interest rates remain constant throughout the life of the loan while variable loans change depending on various financial factors. It’s best that you choose a private student loan with fixed interest rates because you’ll know how much you are expected to pay compared to variable rates which might fluctuate and get really high.
b. Terms – The ideal private student loan should have a short time. Remember that the longer the term, the more the interest you will end up paying. A short-term should also allow you to settle the loan in the fastest way possible so that you can get on with your life.
c. Prepayment Penalties – There is always the possibility that your transition from school to the marketplace will be smooth and efficient. You can quickly end up with some cash that can allow you to settle your entire loan before the due date. The best private loan should enable you to make such payment without penalizing you. Its, therefore, in your best interest to get a loan with no prepayment penalties.
d. Application Fees – Try and look for a loan with no application fees. This will only save you a few dollars, but it’s still better than nothing, right?
e. Origination Fees – Origination fee is a one-time payment that some lender charge before processing your loan. It’s a good idea to avoid this payment but if you come across a loan with an origination fee and low-interest rates, paying the fee won’t be a bad idea.
f. Co-signer release – almost all private student loans require the applicant to have a cosigner. The good thing is that a significant majority of them will allow you to release the cosigner after a certain period. It’s best to get loans that will enable you to release the cosigner in the shortest time possible.
Top 3 Private Student Loans
Credible is one of the best private student loans not just because of the favorable terms of their loans but also due to how easy it is to access and make your application. The company allows interested students to enter their details and in less than 5 minutes, they will provide you with information of all the loans they qualify for.
You can then read through the terms of each of the loans, and once you get one that suits your needs, you will make your application online in a process that shouldn’t take more than a few minutes. All the necessary details will be submitted online to get the application started. In case a cosigner is needed for your specific loan, they will also be required to make a quick application online.
Another reason to love Credible is the wide variety of partners they have. This platform will connect you to some of the major lenders in the market. All qualified students will hence receive decent offers from some of the best lenders in the market at favorable terms.
You will also appreciate the fact that Credible has no service fee, prepayment penalties or origination fees.
2. Citizens Bank
Citizens Bank offers some of the most thoughtful private loans in the market. This lender can give you loans as little as $1000 all the way to $295,000. How much you qualify for will depend on the degree you are taking. This is a very useful approach as it ensures that you get the right return on investment and it also reduces the chances of getting a loan too big than you need or too little to fully settle your college expenses.
Students with private loans from Citizens Bank will also have the option of deferring payments until they graduate. You could also make interest-only payments while in school and resume standard payment plans after graduation.
Citizens Bank also have parent student loans. Parent borrowers must, however, make at least interest-only or the full payments while the student is still in school.
Private student loans from Citizens Bank also don’t have application fees, prepayment penalties, or origination fees.
3. College Ave
College Ave is a highly flexible lender that allows both students and parents to borrow as little as $1,000 to full attendance costs. This makes it possible for students to get just the right amount of loans they need without any inconveniencing shortages or unnecessary surplus.
College Ave also has different repayments plans for their loans. From the various options, the borrower should get a convenient plan that they can work with. You can choose to make flat amount payments, interest-only payments or full-payments. You can also decide to defer the payments altogether until you graduate. Parent borrowers are, however, more limited. College Ave doesn’t allow them to defer payment while the student is still in school.
College Ave doesn’t charge any application or origination fees. They also don’t have any prepayment penalties.
Private student loans can easily remove the burden of tuition and other college fees allowing you to concentrate on what really matters your studies. You must, however, be keen while taking these loans. If you end up using a co-signer, make sure that they are fully aware of all the details of the loan. Remember that your failure to make the payments as agreed will make your co-signer liable, and this may also appear on their credit record.
If you are careful while picking your loan and making the application, you won’t have anything to worry about. A month or so after your application the paperwork will be done and the funds released.
If you’re looking for the best credit card for students, make sure to check our latest post.