What is a private student loan?
The private student loan is a form of financing options for higher education students in the US. The private loans supplement rather than replace the federal loans. They are advertised, lack forbearance and deferral options that are usually available in federal loans. The private loans are offered by private lenders e.g. banks and are usually used to fill certain gaps in cases where the federal loan does not cover the cost of your schooling. This private loans can be used to help pay tuition fees, books, and other educated/ living expenses.
LIST OF BEST PRIVATE STUDENT LOAN:
PNC student loans offers borrowing opportunities that can be used in several educational activities. The funds from PNC loans can be channeled towards undergraduate, graduate and health and medical professional studies. These funds can also be used to cover cost during residency of health professionals and preparation for the bar exam. The PNC loans are available at both fixed and variable interest rates and it ranges between 3.47%- 10.42% (variable) and 6.49%- 12.99% (fixed). Borrowers on this scheme have a repayment period of up to 15 years. Advantages include payment deferment, debt forgiveness etc. To be eligible to borrow from the PNC loan, you must be a US citizen or a permanent resident of the country. The applicant will also have to show proof of at least 2 years of satisfactory continuous income or employment history.
- CITIZEN BANK:
The student loan offered by Citizen bank is a bit different from other private student loans available. It allows you to bundle your student loans into a new one with the potential of a lower interest rate. To apply for their loans, it is required of you to have a strong credit or a co-signer. The repayment period of Citizen Loan ranges from 5-20 years although you are allowed to postpone payment for a total period of 12 months in case you are facing a financial hardship.
- COLLEGE AVE:
The college ave student loan is a new lender. They have a very flexible repayment terms and their application process is one of the fastest when compared to others. To be eligible to apply for their loan, you must have an annual income that is at least double your debt. Repayment is usually between 8-15 years.
Salliemae student loan has been around since 1973 when it was setup by the US government. However it is now a private student loan scheme and it offers loans to undergrad, graduates and parents. The interest rate of SallieMae is around 7.93% and similar to other private loans, they allow deferment of payment if you go back to school. You must have a minimum of 640 credit score to qualify for their loan. The loan can be repaid within a period of 5-15 years.
If you have an excellent credit and you have exhausted your federal aid, then SunTrust is a decent option for you to borrow and cover rest of your educational expenses. The bank offers several opportunities to maximally reduce your interest rates, including up to a 0.5% reduction if you set your payments to come out from your bank account automatically.
LendKey is quite different from the other student loan schemes discussed above. LendKey doesn’t lend directly to borrowers. What it does is to compare student loan refinancing offers from over 300 community banks and credit unions. Undergraduate and Graduate borrowers can refinance through this platform. The eligibility requirements and loan terms differs amongst the members that LendKey works with. The loans on this platform can be repaid within a period of 5-15 years.
Rhode Island Student Loan Authority (RISLA) is a nonprofit state based agency which helps in refinancing student loans and also lends money to both students and parents for college education. RISLA is available in all 50 states of the country. RISLA loans are available at only a fixed rate, thus the interest rate remains the same for the entire long term. To be eligible for this loan, you must have a minimum credit score of 680, an annual income of $40000 or the borrower’s debt should be equal to or less than 50% of his/her annual income. Their repayment last for 10 years.
Established in 2009, iHelp pairs individuals in need of private student loans with the community banks that will lend the money. The company recently expanded and is now able to help borrowers in all 50 states of the country refinance their existing loans through the community banks. You can refinance as little as $10,000 and up to $150,000 in undergraduate loans and $250,000 in graduate loans through iHelp’s consolidation loan.
You need to have a minimum credit score of 630 or an annual income above $24000 to be eligible for their loan.
SoFi (Social Finances) is one of the most common private student loans available. In 2011, they became the first company to refinance federal and private loans together. SoFi is widely acknowledged for both its low interest compared to other top student refinancing lenders and its job related benefit. The job related benefits includes career coaching and network events. In addition, it has a $5000 minimum balance requirement (which is lower than some of its competitors) and it doesn’t cap the balances it will refinance. It has an interest rate of about 7.74% and the repayment payment ranges between 5-20 years.
|LENDER||RATES||PAYMENT TERM(YEARS)||LOAN TYPES|
|3.77% to 12.99%||Up to 15||Undergrad, Graduate, & Professional|
|2.98% to 11.75%||5, 10, or 15||Undergrad, Graduate, & Parent|
|3.09% to 11.85%||8,10,12 or 15||Undergrad, Graduate, & Parent|
|2.87% to 11.85%||5- 15||Undergrad, Graduate, & Parent|
|4.113% to 10.33%||7, 10, or 15||Undergrad & Graduate|
|3.26% to 8.93%||10||Undergrad & Graduate|
|3.99% to 5.93%||5,10 or 15||Students & Parents|
|3.42% to 8.89%||10, 15 or 20||Students & Parents|
|4.13% to 7.74%||5-20||Parents|
PROS AND CONS OF GETTING A PRIVATE STUDENT LOAN
The cost of your education will be covered:
If you are unable to access Federal student’s loan or the loan granted to you doesn’t cover your tuition and living expenses, then getting a private student loan will help in accommodating all your needs
Other advantages of private student loan include;
- Private student loan allows you to borrow as much as you need in order to cover the cost of attendance minus other financial aid.
- Applying for private student loan is quick and easy.
- Your co-signers can be anybody.
- Usually immediate access to funds upon approval.
- Cosigners can be released from the loan after a period of on-time payments
- Their interest is often variable:
This policy is one of the biggest disadvantages of a private student loan. The lender has the right to change the interest rate at any time. You might start off with a low interest rate only for the lender to increase it down the line.
- The loan is dependent on your credit score:
To access a private student loan, you must meet some criteria which will include a minimum credit score. If your credit score doesn’t meet the required level, then you will not be able to access these loans.
- You may need to begin making payments while you’re still in school:
Private students loans require that you start paying interest or principal while you are still in school. While still in school, the interest on private student loan accrues.
Other disadvantages include: