Private loan

Private student loans aren’t quite as easy to get today as they once were. The reason why lenders are becoming more hesitant about making student loans is probably the high default rate. That’s not to say that student loans are not available at all. They are, but the requirements for making student loans have gotten more stringent.

Qualifying for a Sallie Mae student loan is a bit harder now as well. The federal program, in conjunction with alternative financing options, can be a great help to students who would not otherwise qualify.

There are two types of federally funded student loans – the Federal Stafford Loan and the Federal Perkins Loan.

The Perkins Loan is a little different from the usual student loan in that the school attended is not the lender. Some schools do not participate in the Perkins Loan. Sallie Mae can act as the lender for a Stafford Loan. They can also act as the guarantor for the lender.

Students can also get a private Sallie Mae loan if they don’t qualify for the federal program. These private loans are usually referred to as “alternative student loans.” They are personal loans and are generally not subsidized by a federal program. Students (and their parents) should consider a Sallie Mae loan rather than going to a bank because the interest rates are almost always lower.

Remember that federal loans carry income and grade point restrictions. Private loans do not usually have such restrictions and generally more money can be borrowed using a private loan source.

Sometimes students need to consolidate loans so they can get a lower interest rate and lump loans together so that they only make one monthly payment. Sallie Mae can combine the payments from the various loans, both federal and private, into one convenient monthly payment.

By: Milos Pesic

Tags: Alternative Financing, Default Rate, Federal Loans, Federal Perkins Loan, Federal Stafford Loan, Financing Options, Guarantor, Interest Rate, Lenders, Loan Source, Loans Personal, Mae Loan, Milos, Personal Loans, Pesic, Private Loan, Private Loans, Private Student Loans, Program Students, Sallie Mae Student Loan