Considering private student loans? These 5 types of borrowers could benefit
Getting a college education can be expensive. From tuition to textbooks, the costs can run high, and many students need financial aid to help cover these costs.
You have multiple options to choose from when it comes to funding your education, including student loans. Federal student loans are the most common type of loan college students take out, but private student loans can also be beneficial — especially for certain types of borrowers.
Start exploring your private student loan options here.
Considering private student loans? These 5 types of borrowers could benefit
Private student loans can be particularly useful for these types of students.
Students who need more funding
Federal student loans often have better rates and terms than private ones, so you should always max out your federal loan options first. You should also apply for all scholarships, grants and work-study programs, as these are essentially free money you'll never need to pay back.
However, federal student loans are capped at a certain amount per year, which may not be enough to cover your entire cost of attendance. In this case, private student loans can help bridge the gap. Private student loan limits are often considerably higher than federal limits, allowing you to borrow the remaining amount you need.
Students with good credit
While federal student loans are need-based, private student loans are credit-based. So, if you have a good credit score and a solid payment history, you could get a lower interest rate with a private student loan than with a federal one. This can save you thousands of dollars in the long run.
And, even if your credit score is low, you may still be able to qualify for lower rates if you add a cosigner to your loan.
Students who need funds ASAP
You must submit a Free Application for Federal Student Aid (FAFSA) between Oct. 1 and June 30 to qualify for federal student loans for the following academic year.
However, for many private student loans, you can apply at any time and be approved within minutes. This makes them particularly useful when you need to cover an unexpected expense right away.
Compare private student loan options online now.
International students and non-citizens
International students and non-citizens are not eligible for federal aid. Some private lenders, however, offer student loans for these students.
You will need a cosigner who is a U.S. citizen or permanent resident to apply for a private student loan, and these loans may have stricter eligibility requirements and higher interest rates. However, they can still be a valuable resource for international students and non-citizens who need help paying for their college education.
Students in non-accredited vocational or trade programs
Federal student loans are available to students enrolled in vocational and trade schools. However, your school must be accredited. If your school is not accredited, scholarships and private student loans may be your only funding options.
The bottom line
Private student loans can be a helpful tool in many situations, including for the students listed above. However, it's important to carefully consider your options and review multiple lenders before choosing one. Make sure you understand the interest rates, repayment terms and fees associated with any loan before signing on the dotted line.
By doing your research and choosing the right lender, a private student loan can help you achieve your academic goals.
