One of the many ways to go to college or any educational institution is to apply for private student loans. Private student loans are financing options to pay off college fees and expenses. They are similar to federal student loans but the difference is, they are partnered with banks, credit unions, and online lenders.
If you are wondering about the steps in securing a private student loan, below is a step-by-step guide from qualifying to getting approved.
Are You Qualified to Apply for a Private Student Loan?
Private student lenders are business people themselves and they would want to assess your situation whether or not you can pay at an agreeable date. Therefore, there will be qualifications you need to meet to secure private student loans.
Gather All Your Documents
The usual qualifications are based on your credit score, annual income, age, nationality, high school diploma, and educational eligibility. You need to have a minimum credit score of 600 and a maximum of 850 or better, a stable income, at least 16 to 18 years of age, proof of high school completion, and the school and degree program must be eligible for their requirements.
Private student lenders first look at your credit score. This will determine the interest rate for the type of student loan you are availing. The higher the credit score, the better.
- Annual income
You should also have a stable income since lenders have a minimum income requirement.
You should be of legal age to avail of private student loans but there are lenders that require as young as 16 years old.
- High school diploma
Present your high school diploma as proof that you are done with high school.
Research for Options
There is no end date for paying off private student loans. Although the usual duration is based on a ten-year date. But missed and late payments are inevitable so this can prolong the time frame more. Check for other options with lower monthly fees and interest rates.
For private student loans, an average of two to ten weeks is guaranteed for the whole verification and approval process. This may seem a long time so better prepare all your requirements to avoid unprocessed documents that will result in longer waiting.
To be frank, private student loans should be the last resort when deciding on financing options. Federal student loans are way better since they are designed to suit the day-to-day living situations of Americans more. Unless you can pay off the debt quickly after getting off college, then private student loans are your option.