Student loans are the answer to money problems these days, especially because you can defer payments until after graduation, unlike other loans. But if you aren’t careful, you can end up owing a lot more than you borrowed. I was able to get $4000 in scholarships, but the rest of my expenses are covered by loans. I was able to get a subsidized Stafford loan through Wells Fargo (the government pays the interest while I’m in school) for $3500, but all the rest is in a Parent PLUS loan, which has a high interest rate and although payments are differed, it accrues interest now. If you can get Stafford loans, even if it’s unsubsidized, I’d take advantage, even if you need another loan as well. Stafford loans are a great deal.
I didn’t have to get any private student loans, but for some people, this is what they choose to do for whatever reason. Think Financial offers student loans as well as financial advice and resources and a comparison chart. Think Financial is a well-known student loan provider in cooperation with Charter One Bank and their website is very helpful. They don’t require collateral, and you can apply and get an answer in fifteen minutes and you can use the money for all expenses, unlike some providers. Private loans also give you your money much faster than going through a university.
The biggest reason people choose to go this route is because the amount you can borrow is up to $40,000 for one year, which is a lot more than financial aid offices award students. There are other loan companies, such as Sallie Mae and My Rich Uncle, although I personally like Think Financial or Chase.
If you’re going to go this route, I definitely suggest doing a lot of research into the company and the rates. Be sure to read the fine print and make sure you’re getting a fixed rate. Some companies, such as Sallie Mae have allegations against them so beware of that. Also, private loans usually require good credit to be approved so it helps to have a parent or older family member that’s willing to help. But if they’re going to put their name on it, sometimes it’s better to take out a second mortgage or do a home equity loan with a better rate.