Private Student Loans – dispelling the myths
If savings, grants, scholarships, and federal loans don’t cover the cost of your education, it’s time to turn to private loans. But young college students can’t qualify for a private loan, can they? Wrong! This article addresses this and other myths about student loans that you may run into.
I don’t have any collateral, so I can’t get a private loan.
Private loans are usually unsecured, which means no collateral is required. On the downside, this may also mean a higher interest rate.
I don’t have a good credit history (or no credit history at all)
Since the government doesn’t back private loans, your credit history is a consideration in being approved for a loan. If your credit history is bad or non-existent, you may be subject to a higher interest rate. And remember, you can always get a co-signer. Pay your loan off on time, and soon you will have a good credit history!
I have enough funds for tuition and fees, so I can’t get a private loan
In addition to paying tuition and fees, funds from private loans can be used to cover living expenses, supplies, computers, and other everyday living needs.
I can’t afford to make payments on a loan while I am still in school
For most loans, your principal and interest payments can be deferred while you are enrolled in school. Another option is to make interest payments while you are in school but defer paying - continued below ...
