Private College Loans
Private college loans have gained much popularity in recent years. Students are now moving towards private sources for funding their higher education. These loans are offered for all types of educational programs at undergraduate level, graduate level, and post graduate level. These loans are provided by a number of private banks and financial institutions. Private student loans are a great way to cover all your educational costs in this era of inflation and growing tuition expenses. When federal loan options have been exhausted and yet your educational dreams seem to be in the distant, there’s no better way to finance your studies than opting for private loans.
When searching for a private college loans you must keep in mind certain key points such as interest rates, repayment period, eligibility criteria etc. Popular private student loans of today include Sallie Mae student loans and Wells Fargo student loans. Private college loans come in various packages each designed to fulfill the financial needs of the student. Even though private loans are becoming popular, they come with certain advantages and disadvantages.
Advantages of Private College Loans
The main benefits of private loans have been explained here:
- Private college loans are available in large amounts.
- Private college loans cover complete tuition costs.
- You do not have to show a financial need in order to be eligible for the loan.
- Other educational expenses are also covered such as materials and books.
- With a cosigner you can get some of the best discount deals for private college loans.
Disadvantages of Private College Loans
Private college loans also carry along with it certain disadvantages:
- Interest rates are higher than those on federal loans. The current average interest rate on private loans is around 12%; this figure is subject to change depending on the market rate.
- Repayment options may be inflexible.
- Students must repay the loans and the interest rates fully; non payment and default may lead to bankruptcy and a permanently damaged credit score.
- A bad credit score or no co signer will prevent you from being eligible for great private student loans.