The demand for private student loans is increasing at a remarkable rate. Most experts in the academic sector predict that the number of private loan applicants will continue rising as a ripple effect of the global economic meltdown. Students and those in employment find it fit to expand their knowledge and skills as a way of remaining competitive in the job market. Far too many college students find federal inadequate to meet their educational needs. As a result, here are some situations that necessitate taking a private student loan.
Federal Student Loans Aren’t Enough
Federal student loans, in most instances, are not adequate to meet college expenses. Scholarships and grants might help ease the burden, but in case you are not lucky to secure one, private student loans might help.
Your Parents Have Good Salaries
When applying for federal loans, you are required to prove that you are indeed a needy student. If you cannot verify this especially when your parents have a high monthly contribution, you will not receive as much as you need. The argument given is students from well-off families do need as much money as those from humble backgrounds. Thus if your access to federal loans, grants, or scholarship is limited, applying for a private loan makes a lot of sense.
You Didn’t Complete the FAFSA On Time
Students are expected to complete the Free Application for Federal Student Aid (FASFA) to be eligible for student loans. Unfortunately, most students fail to meet the deadline and are thus locked out of accessing federal student loans. Fortunately, if you are ruled out of federal loans due to this, you can still apply for a private student loan. There are no deadlines for private loans and the approval times might be quite fast provided you satisfy their application requirements.
You Have Unique Needs
Most federal have a defined repayment plan. As such, you need to know when you will start and how you are expected to pay back the loan. If you are worried about the repayment plan or whether it can accommodate your unique requirements, you are more likely to find the best terms from a private lender. The flexibility offered by private loans makes them competitive to their federal counterparts.
When looking for a student loan, do not always assume that federal loans are always the best or just go for any loan from a private lender. Instead, take your time at review offering from different lenders and pick an option that best fits your needs.