Get Answers to Private Student Loan Questions

In summary, the individual is finishing community college in the fall and plans to enroll in a 4-year school in the spring, but needs a private student loan as they are not eligible for federal assistance. They are wondering if they should apply for the loan now, if the interest will start accumulating immediately, and how long the process typically takes. They are advised to consult with the financial aid office and banks, and to shop around for the best interest rate. It is also suggested to work on improving credit before applying for the loan.
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I have never gotten a student loan before so I have several questions that some of you might have the answers to. I'll be finishing up community college this fall and planning to enroll into 4 year school right away in spring. I need a loan to finance it. For various reasons, I am not eligible for federal assistance, so my only option is private student loans.

-Should I apply now?
-I know its almost a year earlier, but is there anything wrong in applying for it now?
-If I get approved now, will the interest rate start clocking right away?
-Let's say my class will start in Jan 2011, how early should one except the loan be approved and ready to be dispensed? (School application deadline: Oct 15, notification by Dec 15)
-How long does it usually take for a private student loan to be looked at and be given final answer?Thanks a lot!
 
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  • #2
Ask the financial aid office at your school, and I'd probably also get second opinions from banks. Be sure to shop around. It can't hurt to start making some calls now. Interest rates are relatively low right now so there's a chance you could lock in a lower rate. You won't start paying interest until they write you or your school a check for the money.

Even if it turns out that you need to wait a bit, you can take steps to increase your credit between now and then too. Make sure you aren't missing any payments and don't apply for any new credit cards or anything like that. There are plenty of sites with other suggestions that you can search for too.

Good luck!
 

What are private student loans?

Private student loans are loans offered by banks, credit unions, and other financial institutions to cover the cost of higher education. These loans are not funded by the government and typically have higher interest rates compared to federal student loans.

What are the eligibility requirements for private student loans?

Eligibility requirements for private student loans vary depending on the lender, but generally, borrowers need to have a good credit history and a steady source of income. Some lenders may also require a co-signer if the borrower has limited credit history or a low credit score.

How much can I borrow with a private student loan?

The maximum amount you can borrow with a private student loan depends on the lender and the cost of attendance at your chosen school. Most lenders have a maximum loan amount of up to the full cost of attendance, including tuition, fees, and living expenses.

Can private student loans be forgiven?

Private student loans cannot be forgiven through programs like Public Service Loan Forgiveness or income-driven repayment plans. However, some lenders may offer loan forgiveness options for certain professions or in cases of extreme financial hardship.

What are the repayment options for private student loans?

Repayment options for private student loans vary by lender, but most offer a standard 10-year repayment plan. Some lenders may also offer extended or graduated repayment plans. It is important to carefully review and understand the repayment options before taking out a private student loan.

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