1. For many families, borrowing is one of the key
components of financing a college education. To
that end, a family may utilize one of the many
education loan options that are available, such as
private education loan programs available from
lenders.When a family borrows an education loan,
they essentially rely on future income sources to
pay college costs, as they will be repaying the
education loan back in the future. Since loans
need to be paid back, the loan repayment will be
an added responsibility in the future and one that
needs to be taken very seriously. Loans are not
free and actually can be very expensive. It is
imperative that if you do borrow a private
education loan that you be a smart borrower, as
decisions that you make now will impact your life
style and options in the future. Students should
first maximize loan borrowing through the Federal
Direct Stafford Loan Programs, if eligible, which
have favorable terms, various repayment options,
and typically are the lowest cost loans.
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2. Private education loans, also referred to as alternative loans, are
credit based loans offered by lenders, including banks, credit unions,
state agencies, and private companies It is important to understand
the role of credit in the private loan process, as private loans are not
automatic financing options
3. Private loan programs use a borrower's and co-borrower's (if
applicable) credit worthiness as a determinant when considering
applicants for private loan eligibility A borrower's credit worthiness
not only determines if they are approved for the loan, but has a
bearing on the interest rate assigned to the loan
4. Ultimately, when talking about private loans, your credit rating is a
very important contributing factor in the private loan review process
Although specific lender underwriting guidelines are proprietary
information and unpublished to the consumer, it is known that the
strength of the applicant's credit is a large factor
5. With that said, it is a worthwhile exercise to review your personal
credit standing regardless, as establishing and maintaining good
credit is vital for many reasons In general, credit is the basis of most
consumer borrowing, thus being proactive with credit is a positive
practice
6. Before borrowing a private education loan, you should carefully
compare the terms, repayment details, and total cost of the loan,
including interest rate and fees Loan terms and repayment details
vary greatly among lenders and between loan programs, so do be
sure to compare loan details carefully and ask the lender many
questions when reviewing loan programs
7. Important information to inquire about includes whether the rate is
fixed or variable, if the loan incurs any fees, if there is a prepayment
penalty, what the length of the repayment term is, and if there are
any deferment or forbearance provisions available Loan applicants
will be provided with a disclosure notice with the financing details of
the loan which provides a good opportunity for the borrower to
review the minute details of the loan prior to committing
8. Just be sure to ask many questions and compare several loan
programs before committing to a specific
9. Check out the website somekeyword for a complete guide on how
westernsky to compare private loan programs
