Private Loans for College

As young people launch themselves into self-sufficiency, and their parents work on gathering the resources to help, the financial challenge of paying for college continues to grow: In the decade between 2000 and 2010, the yearly cost of attending a private college rose an average of 31 percent, after adjusting for inflation. Costs for public colleges have risen 42 percent during the same period, due to government funding shortfalls. It’s typical for college students and their families to decide on taking out some loans in order to pay for school, but there are some important facts to consider before signing on the dotted line.

We here at PaydayLoansCashAdvance want to make sure you have all the necessary knowledge before you embark on taking out college loans, so we’ve gathered the basic information here for you.

Research the graduation rates of your school

Why are we suggesting that you check the graduation rates at your prospective school? When you’re entering debt, it’s a good idea to look realistically at what you’ll be getting for your money. Traditional colleges and universities function as non-profit organizations, and they have an interest in providing their students with a valuable educational experience. There are, however, a rapidly growing number of newly formed for-profit “schools” which (in some cases) exist only to collect tuition money from students without providing a usable education.

The New York Times reports a study showing that the largest for-profit school in the nation has only a 9% graduation rate within 6 years of entry for its full-time bachelor’s degree students. The overall graduation rate for bachelor’s degree students at all for-profit schools is 22%. This compares with rates of 55% and 65% at traditional public and private colleges. The report comments that some of these colleges “deliver little more than crippling debt”, because even when students drop out, they are still responsible for paying back the tuition money they have borrowed.

Make sure you’ve exhausted other sources of aid before considering private loans

Private and college-based scholarships, federal student aid, federal student loans…these are all options that you should pursue to the greatest extent possible before turning to private (sometimes called “alternative”) college loans.

Federal loans are better than private loans for several reasons. They have lower rates, they don’t require a credit check or co-signer, and they may be deferred while you’re in school or unemployed. They also have provisions which allow discharge of the balance if you do public-service work for a certain period of time, or it you become disabled.

If you still can’t meet educational expenses after requesting all other federal student aid, be sure to consider the federal PLUS loan, a loan to parents of undergraduate students.

However, once you’ve exhausted all possible federal assistance, you may still fall short. At that point, you will embark into the turbulent waters of private loans, and it’s good to be aware of what to look for.

Try credit unions first

Credit unions offer many of the same services as banks, but since they are not profit-making corporations, they often have lower interest rates and fees. You do have to find a credit union that you are qualified to join, but this has become easier in recent years, as more people have begun to recognize the virtues of credit unions; for example, there are credit unions which only require that you be a resident of the state where they are located. Some schools even have their own credit unions, so be sure to check and see if that’s the case with the college you have in mind.

Apply for several loans in order to comparison shop

Requesting several loans at once isn’t much fun, but it may be profitable – so try thinking of it as a temporary paperwork job. Some lenders may give far better rates than others, and you won’t know until you get started. You can always decline the ones you don’t want; getting started them doesn’t require you to follow through and accept the loan. According to one a website that helps students figure out how to finance college, families are losing thousands of dollars because they don’t take an extra half hour to shop around between private lenders.

Questions to ask the lender:

  • Is a co-signer required?
  • What is the lowest possible cost for a loan? (Cost is the combination of interest rate and fees.)
  • Would having a co-signer lower the cost of the loan?
  • Is there a provision by which the co-signer can be released, following a certain number of on-time loan payments? (Sallie Mae offers alternative school loans with this option.)
  • Is there any penalty for early repayment of the loan?
  • What is the APR (annual percentage rate)?
  • Will the APR change?
  • Are the principal and interest deferred while the student is in school?
  • Does this deferral apply if the student is only attending school part-time?
  • Can this loan be consolidated with other loans in the future?

Use loan search engines

These search sites offer helpful services such as side-by-side loan comparisons and general information about funding an education. The Consumer Financial Protection Bureau (CPFB) is also a good resource for understanding your rights when taking out school loans.

Details to keep in mind when taking out private loans

Private loans are based on income and credit score, and they are not available to everybody. If a student’s parents have had financial difficulties of their own, and their credit scores or incomes aren’t very good, private loans may be unavailable or prohibitively expensive.

Applying for private loans may take 4 to 6 weeks processing time before the funds are available.

Give some consideration to your anticipated earnings following graduation; financial advisors recommend keeping loans of all types at a level where the loan payments will not amount to more than 10% of the take-home (not gross) pay after graduation.

The Consumer Financial Protection Bureau recommends that you NOT decide to cut corners by using your credit card to cover education costs. Credit cards offer even less flexibility and fewer consumer protection benefits than private student loans.

The operator of this website is not a lender.
This site will share the form information provided by the consumer with one or more lenders.
This site can connect you with a cash advance lender based on your form and lender requirements.
Not all customers will be connected with a lender, and not all forms will be approved by a lender.
PaydayLoansCashAdvance cannot guarantee the amount of funds that may be extended if a lender approves the form.
*Not all lenders can provide up to $1,000. Consumer loan amounts vary bases on creditworthiness.
Lenders tend to provide upper range loan amounts to returning customers. Cash transfer time may vary between lenders.
Funds are not available until the next business day. Cash advances are not available in all states.
Lenders may undertake credit checks or otherwise verify the consumer’s social security number or other information.
If and when lenders preform credit checks they are ran via specialized credit bureaus.
Late payments of loans may result in additional fees or collection activities, or both.
Non-payment of credit could result in collection activities.
Each Lender has their own terms and conditions, please review their policies for further information.
Every Lender has its own renewal policy, which may differ from Lender to Lender. Please review your Lender's renewal policy.

Please refer to our Privacy Policy for important information on the use of cookies.
By continuing to use this website, you agree to the Notices and Disclosures and the Privacy Policy.

Copyright © 2014 All rights reserved.
3172 North Rainbow Boulevard #1212 Las Vegas NV 89108