Are you a college student who is thinking about applying for a student loan? One thing that many people do not know is how much money they can actually borrow in order to go to college. These types of loans are called “secured loans.” If you have an excellent credit score and you have not previously had any student loans, then these types of loans will help you to finance your education. If, on the other hand, you have poor credit, bad credit or bankruptcy, then these loans may not be the best option for you.
With a secured student loan, you are automatically eligible to borrow up to only 100% of the amount that your college says it will cost to enroll and then attend classes (your actual cost of attendance). You can apply for federal student loans as well as for private student loans using a centralized loan application. There is no application fee. There are no credit checks, no collateral needed, and you do not have to pay interest while you are in school. The lender is not even going to look at your credit rating while you are in school.
Direct subsidized student loans are provided by the government directly. They are different than most private loans because they do not require you to have any collateral or good credit to get approved. This means that if you are unemployed and have low credit scores, or you have bankruptcies in your past, then this is probably not a good choice for you. However, if you have excellent credit, a great income, and are unemployed or not eligible for any sort of government loan, then this could be your best bet.
There are two main types of federal student loans: subsidized and unsubsidized. Subsidized loans are guaranteed loans, meaning that the government pays the interest. Unsubsidized loans are generally based on income and need, but the government doesn’t pay anything. There are many good private student loans that are subsidized, but the selection of private lenders is much more limited than those for federal loans. There are also many high interest rate unsubsidized federal loans available, but these are harder to come by.
Private student housing loans can be confusing, but there are some very clear distinguishing features. First, most private lenders will require you to pay all or part of your student loan repayment through a deferment. This basically means that you are going to have to wait a specific period of time before you start repaying the loan. This can be inconvenient because you will not know exactly when you need to start making payments, but if you can wait this long, then it is usually worth it.
When comparing private student loans, you will want to make sure that the lender you are working with reports to at least one major credit bureau. Most lenders do not, and this makes the loan process much more difficult. Lenders are required to report to at least two credit agencies, but they can vary in their reporting. Some lenders do not report at all, because their goal is to just make the loan process as convenient as possible for their borrowers. For students who are applying for subsidized loans, this is especially important, because subsidized loans are almost never paid back in full.
Another thing that you will want to keep in mind when comparing private student loans is to make sure that you compare the terms and conditions of each lender that you are considering. For example, you may have been told that you cannot consolidate your federal student loans unless you qualify for a co-signer. The truth is that you will almost certainly qualify for a co-signer, but the lender may choose to apply certain requirements to your private loan. Keep this in mind when comparing lenders, because there are a lot of lenders out there who will try to push you into a private loan that you may not qualify for anyway. You want to be careful about choosing a lender, because sometimes a lender can steer you towards a private loan that you don’t qualify for.
Finally, you should take your time when comparing different lenders. Each lender will offer different rates, and you want to take the time to look at the differences between them. Some private student loan lenders do not require co-signers, and in fact many lenders prefer not to do so. Take the time to look at what each lender has to offer you, and then look at your credit score and credit history to determine if you are a good candidate for a loan. If you find that you are, then you can apply and receive a federal or a private student loan from a lender that has worked with you.