Today being a brilliant student is not enough, there are so many educational expenses attached with a regular college degree, that it has become increasingly important for students to get either government assistance or look for a private student loan. If you are however someone gifted with exceptional IQ, then there is no stopping you. You will either get a scholarship or you might end up receiving government aid, however not everyone is a genius, and this means that to fund your own education you have to apply for government funding, or you can apply for a private student loan.
Advantages of a private student loan
A privates student loan is as the name suggests a private loan, it is a loan that has nothing to do with the government, and in essence is an agreement between you and a private loan firm. The advantages are many fold, the first thing that goes in your favour is that unlike a government student loan that has restrictions on the type of expenditures you can make, there are no such restrictions on you in a private student loan. For example if you want to buy a laptop for personal use, a government loan may or may not fund such an expense, however there is no such restriction with a private student loan.
There are also other vital benefits to a student loan, just like a government student loan, a private loan also requires you to pay the loan after you have completed your education, in addition a private student loan does not require you to apply via the college administration. A private student loan gives a student direct access to funds, and is much faster. As a matter of fact, private loans are designed to cater to all kinds of student expenses, this makes them a viable option for people who are not completely sure by how much their budget might get stretched.
Another factor in favour of private student loans, is that a private student loan usually offers a higher sum of money to students. A private student loan can be around $30,000 a year, and if required the student can apply for a loan of up to $40,000. This is beneficial to students that are enrolled in college courses that require larger sums of money in terms of tuition fees, and equipment. As mentioned earlier the biggest factor in favour of a private loan is that its fast, has a more flexible way of working, and is free from any government intervention. Government student loans are notorious for being restrictive, something private student loans are not.
If you are considering a student loan, and are a little apprehensive about a government student loan, or feel that you require more flexibility, then a private student loan is a viable option, and should allow you to utilise your funds more freely, with fewer restrictions. However there is one major drawback, unlike government student loans, the student needs to have a good credit history, and in most cases a co-signer is also required; hence not all students are eligible for private student loans.
How to choose a private student loan
The first thing you have to do is carefully understand all the financial implications, the interest rate, the flexibility of the loan and most of all the limitations of the loan. You have to make sure you find a private student loan that is offering you a blend of all of the above mentioned parameters. If you do your research before applying for a private student loan, it saves you trouble in the future. For example, you might incorrectly assume that the private student loan is going to cater to all your expenses like a personal laptop or other relevant bills, make sure you are aware of the shortcomings of the loan you are applying for. There is an old saying better safe than sorry, make sure you know everything you need to know about the loan before you complete the formalities.
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Krayton Davis is the Executive Principal and the author of this article on student loans.
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