| Thinking about getting a private student loan? These | | | | situation with your degree. This one is big. Try to |
| loans have some pros and cons, good points and bad | | | | avoid going deep into debt to pay for your education. |
| points. Take a look below for the reasons for and | | | | You will be better off with less debt of any kind. |
| against getting one of them to help you fund your | | | | 4. Pro: Less Paperwork |
| college degree. | | | | It's true: the private student loan will have a shorter |
| Also, at the end, you'll find a few extra tips on how | | | | form. The FAFSA can take some time to fill out to |
| to pay for college and what to avoid. | | | | get a government student loan. |
| Pros and Cons of Private Student Loans | | | | Usually, it's worth the time. You will save on your |
| 1. Pro: Easy to Get | | | | student loan debt. And if you need a loan next year, |
| One of the reasons students like loans is that you | | | | the time to fill it our will be much less. |
| can almost always find one. These loans come from | | | | 5. Con: Fewer Other Benefits - Like Deferment |
| banks and other lenders, and they don't have the | | | | Private loans usually don't offer much in the way of |
| same deadlines that government loans have. That | | | | deferment for job loss, low pay, while you find a job |
| means that you can apply for one of these any time. | | | | after college, or if you go back to college later. This |
| 2. Con: Higher Interest Rates | | | | feature can help you make those payments. |
| When you get a private student loan, you will | | | | Private lenders just don't give the same benefits |
| probably pay higher rates than if you got a Stafford | | | | because they cost serious money. And if they do, |
| or a Perkins loan, two loan programs sponsored by | | | | watch out. You might be making your loan much |
| the government. | | | | bigger on the back end. Some lenders will offer the |
| Private banks can charge any interest rate they want | | | | benefits by increasing your loan amounts, sort of like |
| for student loans, while the government programs | | | | interest on interest. |
| have a cap that they stay under, around 8%. | | | | 3 Extra Tips on Paying For College |
| Bottom line: you will pay more to borrow money | | | | - Go to a cheap school. I know, your school produces |
| when you get a private loan instead of a | | | | huge salaries. But if your field has an average wage, |
| government guaranteed loan. | | | | you probably won't be far off that salary when you |
| 3. Pro and Con: No Limit | | | | graduate. Think about a less expensive school unless |
| The government has set up limits on student loans. | | | | you have tons of scholarships. |
| Undergrads can only borrow so much, and then grad | | | | - How old are you? When you get to 24, get |
| students more, and so on. A private student loan | | | | married, or if you have served in a war, you probably |
| doesn't have the same limits. You are only limited by | | | | can apply for a Pell grant without your parents' tax |
| your credit score and your lender - the bank. | | | | information on the FAFSA. Usually, poor students |
| This one resembles a double edged sword. You can | | | | qualify for more than if you have to include your |
| borrow more, like a student I read about who | | | | mom or dad's income. |
| borrowed over $120,000 on privates loans for a | | | | - Share. This can save you thousands. Share a room. |
| photography degree. But that's a huge debt to pay | | | | Share a car. And if you can, share your food |
| back, with large payments. | | | | purchases. It helps you avoid living on ramen all |
| The government limits try to keep you out of that | | | | through your studies. |