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How to Find the Best Private Student Loans
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When figuring out how to fund your education, it is important to weigh options so you choose the means that best fits your budget. If you don’t have a great deal of money saved for college or graduate school, one of the most viable options to fund your education is a private student loan. Private student loans are loans funded by a bank or another institution, such as a credit union or corporation. A private student loan can be awarded to you as a student or to your parents. They can be the primary source of funding your education or they can be used to supplement a scholarship or a federal education loan.
Where Should You Shop?
There are a number of places to shop around for private student loans. The LendingTree student loan program lets you borrow up to $50,000 a year to pay for all education-related expenses. In addition, with a LendingTree student loan, interest is not deferrable, which means you won’t end up paying interest on interest after you graduate.
There are also corporations that specialize in student loans. One of the biggest is SallieMae, which was established as a government-started entity in 1972. The company began privatizing its operations in the late 1990s and offers a number of education loan options, including private loans for students.
Your school may also provide you a list of companies that you can look into for help funding your education. Remember to be in touch with your university’s Financial Aid office so you can be prepared to get a loan if you need one. Also, remember to shop around for the student loan that is the best fit for you. Comparing interest rates and repayment options can help you plan for your financial future.
How to Apply for Private Student Loans
Once you find the right lender, it’s application time! The application process varies from lender to lender, but, typically, private student loan applications will ask for the following information:
- Contact information
- Personal information (such as date of birth, social security number, household income, etc.)
- School/loan information (including, the school you are attending, expected graduation date, cost of attendance, requested loan amount, etc.)
Once you submit your application, you will enter the approval stage. This is where the lenders review the information that you provided and decide whether to issue a loan to you based on your credit history, among other factors. This process can take minutes to a few days, depending on the level of automation that is used in the lender’s review process. Once the lender comes to a decision, you will receive one of the following results: approved, denied, or eligible with a creditworthy cosigner.
If you were approved, it’s time to review and sign the terms of your loan agreement. Before signing, you want to be sure to read through the contract carefully so that you thoroughly understand the terms of the agreement.
After you sign your loan documents, most of the work is out of your hands. Your loan now must be certified by your college or university. A college official will verify information such as your student status (full or part-time), your desired loan amount, and expected graduation date before you can receive your loan money.
How to Get Your Money If You Are Approved
So, you may be wondering – how does my school get the student loan money? Conveniently, most lenders send the loan money directly to your college, eliminating the stress of having to transfer the funds to your school yourself. Both your student loan servicer and your school should notify you of the loan amount and the date when the money will be received. Once your college receives the money, it will be applied to your tuition, room and board, as well as to any other additional fees incurred. Any remaining balance after covering these payments will be refunded to you.