The career of your dreams requires a college education. Gaining admission into the college that offers your desired program wasn’t easy, but you did it. Now, there’s only one problem — the cost. Even with maximum financial aid eligibility, you and your parents don’t have enough money to cover the first semester of school.
With little savings to cover the difference, you might be tempted to abandon dreams of an undergraduate degree. Fortunately, another funding source is available - private student loans. But students may skip this option without understanding how these loans work or fearing they won’t qualify.
Private student loans are a credit-based source of financial aid that can make your college dreams come true. Here’s how.
Loan proceeds can be used to pay for more than tuition, fees, and books. Private student loans can also cover the costs of housing, food, and travel. Students can make sure they have all of the educational supplies they need to focus on their studies, including laptops.
Lenders understand that students are likely to have thin or nonexistent credit profiles. Applicants are encouraged to submit private student loan applications with creditworthy co-signers to increase the likelihood of loan approval. The co-signer can be any creditworthy individual willing to share repayment responsibilities with the student. Once the student graduates and makes at least 12 full loan payments, they can apply to release the co-signer from their obligation to the loan.
A co-signer isn’t required for a student to qualify for a private student loan. Some students are eligible on their own. But a co-signer can help students with less than stellar credit qualify for a lower interest rate loan.
Let a Member Experience Consultant from Prince George’s Community Federal Credit Union further explain the benefits of submitting your application with a co-signer.
Most lenders charge an origination fee for processing a new loan. Some private student loans, such as the Sallie Mae Smart Option, have no origination fees. This helps reduce the cost of borrowing.
Parents and students often turn to conventional private loans, i.e., personal loans, to bridge the funding gap between savings and college expenses. Unfortunately, these loans have limited repayment flexibility and may charge a penalty fee for early repayment. Private student loans provide borrowers with more than one repayment option and encourage early repayment. The faster borrowers repay their loans, the more money they can save.
For example, the Sallie Mae Smart Option Student Loan has no prepayment penalty and offers several repayment options:
And, if you pay off the loan early, you can do so without any pre-payment fees.
Private student loans with competitive variable and fixed interest rates are available. Options vary by lender, with some offering even lower interest rates for borrowers who make in-school payments by auto debit.
Don’t let limited financial aid funding prevent you from completing your degree. Learn more about the Sallie Mae Smart Student Loan and how it can provide the funds you need to start school next semester. Apply for a student loan now or contact a Member Experience Consultant today!
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