Main Information about Private Student Loans
Education in the US is very expensive today and majority of the students have to apply for the financial aid to pay their education expenses. The most widespread type of the financial aid for students is the student loan. There are two types of student loan – private and public. Public lenders have many requirements for the candidates and it is quit complicated task to receive the public loan. The private lenders offer less advantageous terms, but it is easier to receive such type of loans. There are many educational expenses, which must be covered: tuition fee, book fee, accommodation, insurance, living expenses, transportation, etc.
Federal loans are guaranteed by the federal government. In the same time the private loans are provided by private lenders, such as non – profit organizations, private trusts and companies. The sum of the loan can be from $ 1 500 to $ 30 000. Usually the private loan is equal the sum of the essential studying expenses minus the sum of money provided by other lenders.
There are some requirements for those people who can apply for the private loans. First of all the candidates must have US citizenship or be permanent residents of the US. Besides, the candidates must have good credit score and credit history. If the students are from other countries, the loan agreement must be sighing up together with the cosigner, which will be responsible for the debt in the case of non payment.
Usually the interest rates on the private loan are higher than on federal loan and are approximately equal 8-10 %. The repayment period is maximum 20 years. Depending on the taken loan the repayment options can be the following: immediate payment of interest and principle; immediate payment of interest; deferment of interest and principle and deferment of principle.
The private student loans can not be consolidated with the federal loans.