Private Student Loan

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For Information on The Private Student Loan

There’s a lot of misinformation about Private Student Loans and in this session, the Student Loan Whiz, will proceed to clear the air concerning this increasingly popular source of student loans.

What is a Private Student Loan?

A Private Student Loan is a loan made to students by private finance companies: various banks, credit unions and specialized education lenders provides these loans to fill in the gap left when scholarships, grants and federal loans don't cover the entire cost of attendance.

When Should a Person Apply For A Private Student Loan?

Only after exhausting all other financial aid avenues; Scholarships, Grants, Perkins Loans, Stafford Loans, Parent PLUS Loans, Grad PLUS Loans, Family funding and work study programs. Private student loans should be your last resort.

How Does a Person Determine If They Should Apply For a Private Student Loan?

The measuring rod is if after receiving scholarships, grants, federally school loans, family funds and using savings and your educational expenses are still not covered, that would be the time to consider a private student loan.

How Does The Private Student Loan Application Process Work?

Once you decide on a lender and have determined how much you want to borrow, with most lenders you apply online or complete an application over the phone. Generally speaking, to complete a private student loan application, most lenders will require the following information:

• The borrower’s full name
• The borrower’s social security number
• The borrower’s date of birth
• The borrower’s permanent address and the number of years they have resided there (no P.O. boxes)
• The amount of their monthly rent, lease or mortgage payment
• The borrower’s home phone number
• The borrower’s current occupation and position
• The name the borrower’s employer and how long they have been employed by them
• The business phone number of the borrower’s employer
• The borrower’s gross annual income
• Personal references for borrower, (to include: name, address, home/business phone number)
• The name of the borrower’s school (or the name of school the student for whom the loan is for, is attending)
• If applicable, the social security number, contact and employment information for the co-signer

Do Private Student Loan Lenders Check Credit?

The answer is, “Yes!” Private student loans are approved or denied based on your credit or that of your co-signer. This means the lender will review your credit score and credit history, and that of your co-signer, to determine your eligibility and the rate and fees of the loan. Most lenders require both the borrower and co-signer to have a strong credit score (good to excellent) in addition to meeting other criteria, such as no negative credit history (missed payments or defaults), debt-to-income ratio (amount of debt vs. your current income), and even proof of current employment and income.

Are There Any Fees Associated With Private Student Loans?

Yes there are; almost all private student loan lenders insert origination fees.

What Are These Fees Based On?

They are based on your credit score and history (and your co-signer’s).

For more FAQ's on Private Student Loans