Things to Know About Private Student Loans

posted on Monday, July 27, 2020 in Financial Tips

Don't let financial constraints ruin your chances of getting into a good school. Check out our latest blog to learn more about the basics of private student loans.One of the challenges most students will have to face is paying for college tuition. That’s why, nowadays, there are different financial aid options they can explore. Among these are private student loans.

What Is a Private Student Loan?

A private student loan is a type of non-federal funding that can be acquired from financial institutions like credit unions, commercial banks, online lenders, etc. This type of loan can be used for various education-related expenses. These include housing, school supplies and equipment, academic fees, transportation to and from the campus, study abroad programs, etc. 

Who Can Qualify for One?

There are two important factors that lenders look for in borrowers—a good credit score and a steady source of income. Since most undergraduate students lack in these areas, a cosigner will be required. This individual will share the full responsibility of repaying the loan. It is important to note that cosigners are not only limited to parents but also include relatives, guardians, and friends.

What Is the Maximum Borrowing Limit?

Borrowing restrictions will vary per lender. The general rule is that students can take out an amount not greater than the total of their school’s cost of attendance. Other financial aids like scholarships can also be subtracted from this value.

What Are the Different Payment Options?

Repayment options will also depend on the lender. Some institutions will allow borrowers to choose from 5, 10, or 15-year terms. In addition to that, students will be given the option to pay only the interest due on the loan, defer payment until six months after graduation, or cover the full payment while in school.

Apply for a Student Loan from a Trusted Financial Institution

At Community 1st Credit Union, we offer flexible college funding solutions for our members. We understand that applying for a student loan can be overwhelming. Don’t worry. Our repayment counselor will be more than happy to assist you with all your financial aid questions.

If at this time, you couldn’t visit one of our locations, C1st provides the option to apply for a student loan online. Don’t hesitate to contact us if you have any questions regarding our services.