Student loans are often taken by people who wish to get a higher education yet lack funds to pay for everything they may need during their studying. This is where student loans come in handy. Their flexibility allows you to pay them off for years after the graduation.
However, what if you took all the possible federal student loans and still you, as a university or college student need more funds? How is an online application done? What to do if you have a bad credit or even no credit history at all? This is where private student loans come into play.
So What are Private Student Loans?
Private student loans are mostly taken when you maximize your number of federal loans. So it is some sort of emergency exit if you need more money.
But there is one problem with private loans and it’s called a credit. You see, if the government doesn’t care about your credit and is willing to pay for your education, then private lenders do.
So either you have a good credit, or you have a cosigner with such (there will be further information about the latter further in the article). So as you may see, private loans are harder to get.
But on the other hand, government loans require you to do more paperwork (FAFSA) where you will need to give information about your family as well as personal finances.
Not to mention the fact that federal loans provide a limited amount of money you can get.
Private lenders may offer you both better terms and loan opportunities, yet you will be expected to have a good credit and income to show that you will pay the money back.
How to Get an Online Student Loan with a Cosigner
If you don’t have a good credit then getting a cosigner will be the best way out in order to get a private student loan. To be honest, 90% of private loans have a cosigner.
So how does it work?
To put it in a nutshell, a cosigner is a person, who gives his good credit reputation for you to get a loan. When you get your loan and start to repay it, then you build your credit, which starts to become a good one.
Seems easy? Not exactly. You see, if you fail with your repayments, your cosigner will face consequences for that. Due to this reason, cosigners are mostly close relatives or people who trust you.
Try to avoid cosigning websites, since most of those cosigners may want a part of your loan for themselves in return. Didn’t you think they’ll help you for nothing?
Getting a Private Student Loans without Cosigner
What if you can’t or even don’t want a co-signer? Well, if you’re either of these types of people, who would rather like to get private student loans no cosigner variant, then here is what you can do.
Get a job (to show that you can repay all your debts in time) and start getting a high credit score. Unfortunately, many private student loan lenders want you to be a U.S. citizen in order to get a loan. So if you’re not one, better seek some cosigner who is.
Private Student Loans Bad Credit Score: What To Do?
When dealing with private student loans, a bad credit may prove to be one of the major obstacles.
Everyone whose credit has below 619 will experience difficulties in getting an approval to obtain student loans. So basically, the best way to get a loan with a bad credit score is to find a co-signer.
Also, the private student loans interest rate may be higher if you have a bad credit. So the better credit – the less you’ll have to repay.
How to Apply for a Private Student Loan
Applying for a student loan is much easier than you might think. Just follow the steps in this guide and you will get one in the end.
Firstly, you need to research private student loan lenders. Everyone has his own unique demands and deadlines.
Secondly, there is no actual deadline for a private student loan application. You may do it whenever you wish, which is very good when you met some unexpected costs during the year.
However, don’t apply for your student loan in days or weeks before the tuition is due, because the whole procedure may take up to several months.
Thirdly, it’s very advisable to find a cosigner due to the reasons already mentioned earlier in the article.
Finally, there are some documents you need for it, such as:
- Social Security numbers
- Personal data (the birth date, a phone number, an address)
- Gross annual incomes
- List of assets and values
- Mortgage or monthly rent
- Latest tax returns copy
- Information about employment
- Secure personal reference
These are the documents that private student loan lenders may require. And always remember that private lenders may have their own demands.
Yet they may be more acceptable for college or university students, who don’t want to share information about their family members. It’s not like FAFSA, where you have to give information about your family and relatives, yet still, some information you’ll need to reveal.