Statistics-Graph ***Federal Student Loans Vs. Private Student Loans *** Statistics
Source: Navient Corp., Form 8-K (Dec. 1, 2015).
Today we will look at:
- 1. Private student loans Vs. federal student loans. Tips and Tricks provided!
- 2. When to get a federal student loan, over a private student loan.
- 3. A Co-signer release, which can be used to get a Co-signer removed from a private student loan. USE FREE TEMPLATE AT THE BOTTOM OF THIS POST
Always try to get a federal student loan, over a private student loan.
Why? With federal student loans you can;
- Utilize loan forgiveness options to have a portion of your debt canceled or forgiven after a certain number of qualified payments
- Utilize military benefits
- Use deferment or forbearance options to postpone payments
- Federal student loan consolidation programs are available including income based and hardship re-payment plans
- Private student loans are not backed by the government, and have less regulations attached, resulting in higher fees and interest rates being charged, and less repayment plans available (lower interest rates are available on federal loans)
When is it right to apply for a private student loan?
Once all of your federal aid is used up then you can explore private student loan options. Make sure to view the contract, fees, terms and check for the Co-signer clause if a Co-signer is involved.
Shop around for a private student loan.
Like with getting approved for a credit card
, if your credit score is low, prepare to get approved for a high interest private student loan in many cases. Shop around and carefully review all contracts before signing! Check reviews
across the internet pertaining to whatever institution you use. Example: Search on Google for ("Bank Name" private student loan reviews)
Make sure the reviews you are reading about the institution are not reviews on their own website!
PRIVATE STUDENT LOAN CO-SIGNER TIP:
If you get a Co-signer for your private student loan, make sure to look into the private student loan lender “
Some students with a low credit score, will get their parents or relatives to act as a Co-signer.
Benefit of using a Co-signer for your Private Student Loan:
- Lower interest rate by using another person’s high credit score to get the loan approved.
Downside of using a Co-signer for your Private Student Loan:
- If your Co-signer dies or files for bankruptcy, you could be placed in default.
Most of the time people will Co-sign on a private student loan, trying to help their family member, not knowing that they are equally as liable for the loans if they are not paid, putting their credit at serious risk. The good news for Co-signers is that often they can be released, if the appropriate steps are taken.
TEMPLATE FOR HOW TO OBTAIN A RELEASE OF MY CO-SIGNER:
[Your return address]
[Loan Company Name]
[Loan company address]
Re: Request for co-signer release [Account number for the loan, if you have it]
Dear (Loan Company Name):
I am writing to you because I am seeking the release of my co-signer on my loan. Please conduct a review of my account to determine if I am eligible for co-signer release.
If you determine that I am not eligible to have my co-signer released from my loans, please provide an explanation, including the following:
- What is your current co-signer release policy?
- For what reason(s) am I ineligible for co-signer release?
****TO VIEW THE REST OF THIS TEMPLATE, CLICK HERE:***** CALL 866-376-9846 TO GET THIS TEMPLATE IN MICROSOFT WORD SO THAT YOU CAN EDIT IT AND USE IT.
Next we recommend you visit this page to learn about private student loan relief options, offered by Golden Financial Services.
Student Loan Borrower Assistance, http://www.studentloanborrowerassistance.org/start-here/private-student-loans/