Navy Federal | MakingCents: Private Student Loans


[MUSIC PLAYING] Let’s take a minute and learn
about private student loans. They’re a great solution
when federal loans, grants, and scholarships aren’t
available or enough. Before considering a
private student loan, however, you’ll apply
for a federal loan by filling out a FAFSA. Your school will let you know
how much you qualify for, and from there, you’ll know
how much additional funding you’ll need. Here’s how it works. For private student
loans, lenders assess the
creditworthiness and income of the borrower to determine
how much they qualify for. With a co-signer,
students may increase their chance of loan
approval, borrow more, and get a better interest rate. A co-signer must be a US
citizen or permanent resident, 18 years old or older, and
should have a strong credit history. Most private student loans have
adjustable or variable interest rates which can change
during the life of the loan. Some lenders allow
you to defer payments or pay only the interest on the
loan while you’re in school. Depending on your
lender, you may be able to suspend or lower
payments in times of hardship. When researching different
options, make sure you understand what your
repayment obligation will be, and the payment
options available. Remember– any money you borrow
today will have to be paid back in the future, so seriously
consider how much you borrow and how you use those funds. Being smart about
student loans will ensure that your future is
just as bright as you are.

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