Loans for college students are necessary when someone lacks either a scholarship or sufficient personal savings. A bank or federal student loan are the two principle ways to fund tuition fees and living expenses. Unlike their federal alternative, the best private student loans are neither means-tested or guaranteed to be accepted. This article will help people to assess whether making an application for a bank loan is worthwhile or whether it is advisable to get a Perkins or Stafford loan.
Best Private Student Loans
Although student bank loans are normally easier to administer, the rate of interest will be higher and acceptance is indeterminate. A lot will depend upon the applicant’s credit score, employment history and/or whether they have a willing cosigner as to whether acceptance will be granted. A bank will not favor an individual because they come from a hard-up family and are likely to find financial survival difficult, quite the contrary. Their primary concern is to ensure that the borrower is best placed to make the monthly repayments.
The Best Private Student Loans for Poor Credit Applicants
Should an applicant have an adverse credit history, a bank will not lend them money. Whilst student loans without cosigner are the preferred way to borrow money, this isn’t always possible. Incidentally, no credit history and a bad credit history will not be treated any differently by financial institutions. The bank will want a way to assess the borrower’s credit worthiness. Many undergraduates will find that a federal student loan is the only option.
Consolidating Loans for College Students
A private college student loan can be used to put small bank and federal student loans together under one roof. Each Stafford or Perkins loan creates a separate account and requires an individual repayment each month. Student loan consolidation can help to simplify finances and reduce the amount of money that goes towards servicing debt. However, this could mean that some public sector workers (nurses, teachers and the armed forces) lose their eligibility to debt forgiveness programs.
Private Student Loan Deferment and Dealing with Student Loan Debt
Unlike credit cards, it is not possible to tackle student loan debt by filing for bankruptcy or through a debt solution. It is possible to defer a private college student loan for up to three years should the borrower find it hard to find suitable employment or experience financial difficulties. However, it is important to appreciate that the interest will continue to accrue throughout any deferment or forbearance period.