Private Student Loans

Private student loans offer flexible repayment plans and higher annual borrowing limits to help cover the remaining costs of college less stressful.

Flexible Repayment Plans: Federal student loans standard repayment plan is for 10 years. They do offer alternative repayment programs that you can opt into once you start repaying your loans like income-based repayment. Comparatively, most private student loans offer flexible repayment plans that lets you choose how long you want to repay your loan. College Ave also offers the option for borrowers to select how much they want to pay during school, if at all, to help minimize interest costs long-term and manage their monthly payment.

Higher Borrowing Limits & Cost of Attendance: Federal student loans have annual borrowing limits and for how much you can borrow in total. Private student loans, like College Ave, allow you to borrow up to the total cost of attendance. This allows you to cover education-related costs like books, housing, computers, and more with a private student loan.

As with most financial offerings, you should compare and weigh your options carefully. Research a few private student lenders and their options to see what they offer. Here are a few things you should consider when comparing private student loans:

• Interest rates, types of interest rates (fixed vs. variable), and APRs - what is your specific interest rate and how much will it cost you to repay the loan over time?
• Repayment options and terms - can you fit your potential monthly payment into your budget?
• Are there programs that can help you manage your payments, especially during tough times?
• Are there benefits to help you lower your interest rate such as signing up for auto-pay?
• Do they have good customer service and customer reviews?

The answer is "It Depends!" and it depends on how much you'll need for school each semester. Finances can change quickly. At a minimum, if you know you need to cover a gap in financing your education, you may need to apply every year (for a full year of school) or every semester (if your finances change during the school year). Keep track of your finances as well as any federal student loans, scholarships, grants, and other ways that you're paying for college so that you don't borrow more than is necessary.

Unfortunately, no, private student loans from private lenders, banks, and other institutions, do not qualify for any current or future federal student loan forgiveness and debt cancellation programs. Some private student loan companies offer forbearance to help you if you need financial assistance, but are administered on a case-by-case basis.

Eligibility for private student loans typically depends on several factors, including credit history, income, and educational background. Most private lenders require borrowers to have a good credit score or a cosigner with good credit. Additionally, applicants usually need to be enrolled at an eligible educational institution, often at least half-time. Some lenders may have specific requirements regarding the borrower's or cosigner's income level, U.S. citizenship or permanent residency, and the type of degree program.

Undergraduate Student Loans: These are designed for students pursuing a bachelor's or associate degree. They often require a cosigner due to the limited credit history of most undergraduate students.

Graduate Student Loans: Tailored for students pursuing advanced degrees like master's, doctoral, or professional degrees. These loans sometimes offer higher borrowing limits, reflecting the greater costs of graduate programs.

Refinancing Loans: These are used to consolidate and refinance existing student loans, both federal and private. Refinancing can potentially lower interest rates or monthly payments, but it may also mean losing certain federal loan benefits.

Other private student loan options may cater to different needs and circumstances, such as: degree-specific loans (such as College Ave's MBA and Dental school loans) and loans for international student.

Each type of loan offers specific benefits and considerations, but the goal is to help a range of students find financial solutions that best suit their needs.

Understanding the differences between federal and private student loans is essential for informed borrowing decisions. Federal loans, funded by the government, offer fixed interest rates, income-driven repayment plans, and potential forgiveness programs, with more flexible repayment relief options. They are accessible without a credit check but have borrowing limits and may not cover all educational expenses. Private loans, offered by entities like College Ave, can cover up to the full cost of attendance and provide opportunities to build credit, often requiring a credit check and potentially a cosigner. While federal loans are generally the first choice due to their favorable terms, private loans are useful for filling financial gaps, especially for students at costlier institutions or those needing larger loan amounts.

Budgeting: Understand your college expenses, including tuition, books, and living costs, to determine the necessary loan amount.

Borrow Wisely: Only borrow what you need, as you'll pay interest on any borrowed amount.

Seek Free Money: Prioritize scholarships and grants, which don't require repayment.

Know Your Loan Terms: Understand the interest rates, repayment terms, and any fees of your chosen loans.

Consider Future Earnings: Use tools like the U.S. Department of Labor's Occupational Outlook Handbook to estimate potential post-graduation income.

Plan for Repayment: Start planning early, even making small interest payments during college.

Build Credit: Use private loans as an opportunity to build a good credit score.

Stay Informed: Keep track of your loans and understand your repayment options, seeking help from your lender if needed.

Although applying for private student loans without a credit history can seem impossible, it can be done with the right approach. Many students, especially undergraduates, have not yet had the opportunity to build a substantial credit history, so there are some options available.

The most common and effective way to qualify for private student loans, even without a credit history, is to apply with a cosigner. This reduces the perceived risk for the lender since the cosigner agrees to be equally responsible for ensuring the loan is repaid.

Having a cosigner can increase the likelihood of loan approval and could potentially even help you secure more favorable interest rates. However, it's important for both the student and the cosigner to understand that the outcome is dependent on the cosigner's creditworthiness.

Additionally, the cosigner's credit will be affected by being on the loan and they are legally obligated to repay the loan if the student cannot.

The short answer is no, you do not need a cosigner. However, many undergraduate students lack the credit history or income requirements to be approved on their own and may need the help of a cosigner to be approved. Students may find it easier to secure a private student loan and even a lower interest rate with the help of a cosigner. Here are a few ways that having a cosigner can help.

• Credit Approval: Private lenders require a credit check to approve a student loan application and determine the loan's terms and interest rates. A cosigner with good credit can be the key to not only securing a loan but also obtaining favorable terms.
• Improved Loan Terms: Even if a student could qualify for a loan on their own, a cosigner might help secure a lower interest rate. This can significantly reduce the amount paid over the life of the loan, making the debt more manageable once repayment begins and saving you money.
• Increased Approval Chances: With a cosigner, the risk to the lender decreases, as they have an additional party to hold accountable should the primary borrower fail to make payments. This security can be especially important for students who are non-citizens or who otherwise might face difficulties in securing a loan.
• Building Credit: For students, having a cosigner help secure a loan is an opportunity to help build credit. By making regular, on-time payments, a student can establish a positive credit history, which will be beneficial for future financial endeavors like renting an apartment or buying a car.

Becoming a cosigner is a serious commitment as they are equally responsible for the repayment of the loan. In fact, their credit can be negatively affected if payments are missed, so it's important for both the student and the cosigner to be comfortable with their responsibilities before entering into the agreement.

While not all private student loans require a cosigner, having one can greatly enhance a student's eligibility and terms. It's a strategic move that can provide both immediate financial help and long-term credit-building opportunities.