ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Private Student Loans

Updated on August 15, 2008

Private Student Loans

The first point of call for any college student looking for a loan should be the federal student loans programs which provide loans without any requirement for a credit check and with repayment deferred until after graduation. However, the federal student loans programs are based upon a student's need and carry a number of criteria which can sometimes make it difficult to qualify. And, even if you do qualify, federal loans will not always be sufficient to meet your needs and leave you with a shortfall. At this point therefore it is often a case of turning to the private sector for the loan funding you need.

The biggest drawback for many students as far as private loans are concerned is that they invariably require a credit check and will only be granted if you have a good credit history. The term 'good' however is not always easy to define and sometimes you will find that your credit rating is good enough to get you a loan but not quite good enough to get you the best rate of interest.

However, even if you do manage to get a loan at a reasonable rate of interest you will find that there are other things which you need to take into account. For example, administration fees will often be added to the loan before it is disbursed and these can typically be in the region of 4%. In other words, if you borrow $5,000 then $200 will be added to your loan in fees and this is money which you will not actually receive but will be required to repay. Fees are an important part of your loan consideration because, in very rough terms, every 3% you pay in fees is equivalent to adding 1% to your loan interest rate.

This said, there are also a number of advantages to taking out private loans, not the least of which is their availability. Private lenders are in business to make money and the more money they lend the more money they make. So, whereas federal lenders operate to a strict set of guidelines which you either meet or do not meet, private lenders will work hard to see that you get your loan if it is at all possible.

You will also find that dealing with a private company is generally a lot easier than dealing with federal bureaucracy. It is often true that private lender's customer service departments are understaffed and you can find yourself 'on hold' in a queue fairly often, but it is still generally far simpler to sort out problems with a private lender.

Depending on how much you need to borrow and how good your present credit rating is, it is possible to get private loans which carry no fees and have an interest rate that is on a par with the prime lending rate. Now you will have to have a very good track record to do this, but it is possible. Even if you cannot manage this however, competition in the marketplace means that by shopping around you will often be able to find some pretty good deals.

One trick you may be able to employ if your credit rating is not too great is to bring a cosigner into the equation. A cosigner is simply somebody (possibly a parent) with a good credit rating who is willing to cosign your loan application and to guarantee the repayment of the loan. Depending on your own standing with the lender, you may find that a cosigner can get you a loan with reduced fees and a substantially reduced interest rate.

Many students today shy away from private loans or view them very much as a last resort but, if you shop around and find a few lenders who are prepared to offer you one of their low interest student loans, it could prove very helpful in getting you

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: "https://hubpages.com/privacy-policy#gdpr"

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)