Private Student Loans: Basic Info

student loan

Private student loans are a good option to finance your education. Still, before applying for a student loan, we recommend students consider scholarships, grants, work-study, and federal student loans.

Federal student loans usually have different types of forgiveness programs. Their interest rates are also more flexible and stick to the Congress decision. Private student loans interest rate depends on the credit.

If you decide to apply for a student loan, you should consider the best private student loans.

CommonBond, Discover, College Ave, Citizens Bank, Sallie Mae are one of the most popular options for students. Every bank has certain benefits. You will find something suitable basing on your requirements and expectations. Citizens Bank and College Ave have the lowest interest rates. Discover and CommonBond representatives emphasize their financial hardship forbearance.

You should check out the offers of all banks and choose the best one for you.

If you are looking for private student loans without cosigner, you should before consider federal student loans. Federal student loans initially don’t require a cosigner. Still, you should work on your credit and improve to present brilliant credit history. There are private student loans without a cosigner but all of them require good credit and credit history.

Private student loans bad credit also exist. Generally, interest rates are fixed and comply 3.74% to 12.99%. There is typically no origination fee.

How to Consolidate Student Loans?

There are two ways to consolidate your student loan: federal and private one. If you need to consolidate a federal student loan, you do it through the Department of Education. Federal consolidation won’t lower your interest rate as it’s fixed. Furthermore, it won’t save your money.

You consolidate your private student loan with the help of the private lender. In this case, it’s possible to lower the interest rate and get more beneficial terms.

Consolidating federal student loans is simple. You should go to studentloans.gov and log in with your Federal Student Aid ID. There you will fulfill an application form where you will mention all details about your existing loans and choose a federal loan service and repayment plan for your new consolidation loan. Then you submit an application and wait for the answer.

If you want to consolidate private student loans, you should apply for reputable reviews of the services that deal with it and choose the most suitable one.

Should I Consolidate My Student Loans?  

There is no exact answer without knowing your purpose. If you want to lower your interest rate, federal loan consolidation might not be the best solution. In this case, you will only lose your federal loan protections such as access to income-driven repayment.

Still, if you want to qualify for loan repayment programs, the consolidation might be a good variant.

Is it Possible to Apply for Student Loans without Cosigner?

Cosigners help students to qualify for student loans. Still, most of the students want to apply for student loans without a cosigner. Federal loans require no co-signer. So, you can consider the help of the government.

If you need a private student loan, you should improve your credit history as private lenders can provide loans without a cosigner if your credit score is outstanding. The most important factor is payment history. It shows whether you are responsible when it comes to finances. Payment history shows how you paid off your bills (on time, in full).

The statistic shows that in 2019 more than 40% of graduate students managed to get student loans without a cosigner. Only 6% of undergraduate students got approval. Your approach to credit and debts are the decisive factor if you need a loan without a co-signer.

In order to build good credit, you can apply for a secured credit card. The secret of the outstanding credit lies in holding a total usage at 30% or less of the credit limit and paying off all purchases each month.