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Financing College with Private LoansUpward Bound Advisors cannot advise students or parents/guardians on any one private loan over anotherTake into consideration:How much money will you need to pay to attend your college after all financial aid and scholarships have been applied? Do you have a college savings or money that you have been saving that can be applied to remaining cost first? Direct costs – such as: Tuition and feesBooks and suppliesRoom and Board (if living on campus)Indirect costs – such as: TransportationPersonal costs*These costs will all vary from college to college Understanding Private Loans:Cosigner- Traditional age college students typically need to apply with a creditworthy adult to qualify for a private loan (does not need to be parent/guardian) The cosigner is responsible for making the payment if the student fails to make paymentThe cosigner can apply for the cosigner release after 5 years of successful repayment and they are no longer liable APR (Annual Percentage Rate) - this is the amount that you are charged yearly for borrowing money. Typically private loan lenders will advertise a low APR but upon applying that rate is exclusively for individuals with extremely high credit scores. It is important to look into the APR prior to accepting a loan. Fixed interest rate- A set interest rate that will not change over the course of repaymentVariable interest rate- a variable rate that will change over the course of repayment. Can get extremely low and then jump up very high just depending on the market. Repayment- it really varies by each type of loan, though they are many optionsDefer payment- you don’t start making payments until you graduate from collegeBegin payment immediately- while in college you must make your monthly paymentInterest only payments- while in college you pay for the interest that is accruing but do not pay on the original principle until you graduate.Private Loan Lenders:Best known Great Lakes Wells FargoDiscoverState of MN (SELF)No origination fee (even federal loans have origination fees) Citizen’s BankSallie MaeDiscoverLess knownECMCIowa Student Loans – typically lower APR, but dependent on parent credit scoreLend KeyCommon Bond College AveBank of North Dakota Credit UnionsNot many offer private loans, but worth asking your bank about it to check interest rates None of these are better than another. It is the student and parent/guardian to research, apply, and ultimately pick the lender that fits what they are personally looking for in a loan.FASTChoiceFind this by typing FASTChoice into a college website’s search barThey make it easy to understand private loans by providing additional information and help you determine which loan would best fit your needs at the college you will be attending How to be eligible for a Private loan? Be enrolled or accepted for an eligible college institutionMust be admitted in a degree, certificate, or other type of recognized programMust be a U.S. citizen, eligible non-citizen, or have a cosigner that is a citizenSome require making satisfactory academic progressOther things to rememberPrivate loans can take up to a month to process and disperse funds, be aware of your college deadlines and take out loans in advanceBe aware of terms and conditions, repayment, and interest rates of your private loans If you still need more financial aid your parent can file for a Parent PLUS Loan – it will be in the parent’s name ................
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