Louis ZW Zhang

Alternative Private Student Loans

How to get a private student loan if you have bad credit. What is the interest rate and requirements of the loan?

When a student runs out of federal funding for college education, they can turn to alternative sources for their educational needs.  Banks and Financial Institutions offer private student loans to help cover unexpected, or extra costs associated with attending college.  When considering alternative private student loans to federal loans, remember to shop around. 

You want to shop around because unlike Federal Loans, private education loans often have higher interest rates, and overhead costs associated with them.  Current rates are often based on the LIBOR index, as well as your credit score.  If you don't have good credit, or even a long enough credit history, this can raise interest rates significantly.

One loan available to medical students is called the med-CAP loan.  Usually offered through private financial institutions.  This loan will help medical students cover the extra costs associated with school, since tuition is normally way above and beyond what regular federal loans allow.

Many times financial institutions will cap the annual loan amount at cost of education (COA-aid) minus aid received. Basically this means that If you already have a loan for $4,000.00 and you need $3,000.00 more, that is exactly what the loan will be for.  So you will only get the amount of money you need for education.  Books and supplies will not be included in this type of a loan.

Below is a current list of insitutions that give private student loans.

-GMAC
-Citibank
-Wells Fargo
-U.S. Bank
-Sallie Mae
-Regions Bank

This is not a complete list of all institutions that offer financial aid, nor is it meant to promote these institutions.  When looking for an institution to carry your student loan, find one that is willing to offer no fees and low interest rates. 

More fees mean less money for your education.  It also means that you will spend more time paying it back.  Also, look closely at lenders terms to make sure they are not wrapping the fees into your contract, or that they are not giving you the interest rate they promised.  Sometimes an interest rate is advertised, but it only applies to those with really good credit.

Above all know what you are agreeing to, and understand that you are taking out a loan that can either help or hurt your credit.  It all depends on you. Louis Zhang, Badcreditprivatestudentloan dot net

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