College is expensive. Even with scholarships and grants, you may still struggle to make tuition payments. By taking out a private student loan, you can attend school now and pay for it later. Here are some tips from Metro North Federal Credit Union on how to apply for a private student loan.
Private Student Loans vs. Federal Loans
A private student loan is similar to federal loans in many ways. However, the two have several differences as well. The major differences between a federal loan and private student loan are:
- Lenders: private loans are taken out from either a private lender or bank
- Interest Rates: private loan interest rates are determined based on credit
- Loan Limits: private loans are not limited to just tuition and can exceed any amount
What You Will Need to Apply For a Private Student Loan
In order to apply for a private student loan, many banks will require you to find a cosigner. If you are not able to make your payments, for example, your cosigner is now expected to do so. Tips to consider when choosing a cosigner:
- Cosigner’s credit score
- Usually, cosigners are parents, guardians or relatives
- Their credit score, combined with yours, determines your loan interest rate
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Things to Consider When Applying For a Private Student Loan
There are many things to consider when seeking a private student loan. Some things to keep in mind are interest rates, payments, rewards, eligibility and refinancing. Once these options have been considered, you and your cosigner are ready to apply. You will be required to fill out an application for your private student loan. If approved, you will receive your available loan amount.
Apply For a Private Student Loan with MNFCU
Metro North Federal Credit Union’s knowledgeable and friendly staff is here to help you with your private student loan needs. Apply for a loan with us!