Personal loans for students are one more avenue to explore when looking for money to pay for college. Personal loans like any other college loans should be a last option for any student. You should only take it into consideration only after you have exhausted all sources of funding such as college grants and scholarships. This source of acquiring funding for college can put a lot of financial burden on you when you graduate and one is advised to be well educated in them before signing on the dotted line.
Unlike private college student loans, personal loans are not as common. Most of them require that you meet the following criteria:
- The student should be at minimum, enrolled in a degree program part-time
- If you plan on applying without a co-signer, you must command a very good credit history
- You may be tied down to a repayment term that you cannot re-negotiate in the future
- You might be able to borrow the full amount of your studies but it varies from lender to lender
Let us go through a typical personal student loan from one of the nation’s largest lender.
Sallie Mae has been providing students with loans for decades now. They have three loans that many classify as personal loans. These are the Signature Student Loan, Signature Student Loan for Community Colleges and the Tuition Answer Loan. Each of the loans is designed to meet specific requirements of different student types.
Personal Student Loans and Interest Rates
Almost all personal loans comes with variable interest rates. What does it mean? With a variable rate attached to the loan, the interest rate
on the loan can go up and down during the lifetime of the loan. So you could end up paying much higher or lower than the amount originally agreed to.
A student should always consider the implication of variable or fixed rates when borrowing money for college. They play a very large part in how much you will end up paying after college.
Options to Repay Personal Student Loans
A federal student loan has several payment options such as deferment and forbearance. You can also extend the payment period using student loan consolidation. These options might not be available for personal loans.
When researching personal loans for students,
- Consider lenders that have personal loans designed specifically for students
- Look for lenders that may give you the chance to defer payments until you graduate from your program
Personal Student Loans Lenders
When looking to borrow money for college, it is best to first consider the traditional student loans lenders. Although most private banks out there will be willing to give personal loans to students, most of these do not provide loans that are specific to students. You end up borrowing at terms that applies to the general borrower which will not be suitable for students.
For students with little to no credit history, you can consider borrowing from little known lenders such as Prosper. They are specialists in providing personal loans. Though they may consider students with little credit history, they will not lend to students with bad credits.
Some Tips About Personal Loans For College Students
If you are a student considering loans to fund your educational costs, consider the following tips when applying for personal loans.
- Before applying for personal loans, you should always consider federal student loans first. But consider any other form of financial assistance before loans
- Work out how much free money you can receive from grants and scholarships as well as family contributions before yo ever consider applying for a loan.
- Be thorough with your pursuit of finding free money and only borrow the balance needed to make up for your cost of studies
- Only borrow what you absolutely need to borrow. Remember it is not free money and you will end up paying back more than you borrow
Personal Student loans like other loans are the most easily accessible payment options for college but you will end up with dept that you have to pay back so borrow wisely.