Private Student Loans For College – Credit and Cosigner Requirements
Today, the cost of obtaining a quality education increases each year. This can leave families struggling to pay their child’s tuition bill each semester. There are many alternatives to paying for college: student loans, grants, scholarships, college savings funds.
However, often the amount from these various streams do not always equal the total amount needed. This is when having the option for private student loans for college can make the difference between a student completing their degree, or dropping out.
Tuition, dorm fees, books, and meal plans quickly add up. Applying for private student loans for college is a better alternative than taking out a second mortgage to cover college expenses. This financial aid alternative offers competitive interest rates, a flexible repayment plan and a tax deduction for parents. There are several options that both parents and students have when considering private student loans for college.
Private Student Loan Options
One of the most popular options for private student loans for college is the Signature Student Loan. To be eligible, a student must be working towards a degree at a community college or a four or five year degree college for at least half time. Additionally, there are certain credit criteria that must be met. This can be one of the challenges for parents and students. Unlike the Federal Stafford loans, a person’s creditworthiness determines whether or not the loan is awarded. Your credit is not used to determine eligibility for Stafford loans.
If a student wishes to apply for a Signature Student loan but does not have established credit, a cosigner who meets the eligibility requirements is acceptable. Your cosigner can be releases from repayment obligation after the student has made 24 consecutive on time payments.
Another options for private student loans for college is the Continuing Education Loan which is a credit-based loan for post-secondary students who are not pursuing a degree. Part-time degree seeking students may also apply for this type of loan.
The institution where classes are taken must be accredited by the department of education in the state where it is located. Additionally, applicants must have established credit and be a U.S. citizen or permanent resident.
All private student loans for college require an established, good credit history for the student and parents, regardless of the type. These loans are not guaranteed by the federal government, so the lending institutions must have some type of guarantee for being repaid.
Before applying for these or any type of financial aid, families must determine the total cost for attending college, review their financial position, and weigh the best options so that the student can have complete success.