A personal student loan is another phrase for a private student loan in which you obtain it from a financial institute that is not federally funded. Now personal loans for students can come with benefits as well as drawbacks, just like anything else in life.
The main benefit of personal loans for school is the fact that they can cover your entire cost of education minus any part of your education being funded by grants or other sources like financial aid coming from your family, so they are essentially your solution to your tuition problem allowing you to be able to still afford school when grant money doesn’t offer you enough to pay for college. Personal student loans are also distributed a lot faster, versus having to fill out a FAFSA and wait for what can be over a month before you find out what you are going to be getting from the Stafford Loan, Perkins Loan or the PLUS Loan programs, which the money is usually distributed to you in a few days. Which while we are on the money aspect, you have so much more freedom to accessing the money as private studentl loan funds are deposited into your account or you receive a check in the mail, versus federal loans where your school usually holds onto the funds and dictates when you can spend it which you will need to talk to your school each time you need to use your federal student loans.
Now personal student loans get a bad name due to the fact that they are known to come with higher interest rates, as well as rates that are variable which simply means the interest rate can vary or go up and down at any given time, which unlike federal loans which are fixed meaning the interest rate never changes once you obtain the loan. So basically the lower your credit rating is then the higher your interest rate is going to be, meaning once you pay it back then you will be paying more in interest dues. But their is a flip side to this negative as credit score doesn’t dictate your eligiblity for personal student loans as you can almost always get funds regardless of what your credit score is.
What To Do If You Have A Low Credit Score
If you happen to have a bad credit score then the best thing to do first is look for a cosigner who has a good credit score as they can help you get a personal student loan that both have a lower interest rate, along with better overall terms. Now if you cannot find a cosigner that is willing to cosign for your student loan, which most people can’t then you can visit a credit union which offer personal student loans that have better interest rates than most all other private financial providers when it comes to applying with a bad or no credit score.
If you cannot get personal student loans from either one of these sources or need money fast, then the last option which you should use as a last resort is taking out a Payday Loan which you can get money in as little as 24 hours which funds can be up to $1500 or much more. With these personal student loans are unsecured loans which require no collateral and they don’t even ask you what your credit score, which the only thing that dictates your elibibility is whether or not you have a steady job and can afford to pay them back, but the interest rates are super high and needs to be paid back within usually a month or two.
When shopping around for personal student loans, the main thing that you what to remember is to look at all the terms as they may come with low interest rates but might make up for it by charging you with large late fees and other large fees that can cost you more in the long run.