Many college students have to get a loan to pay for their college tuition fees because their parents don’t have enough income or savings to support their studies. It is common for students to get their parents or family member to cosign their student loan. Getting a cosigner or necessary when the person attending the college does not have enough payment history or a credit score that is good enough. It is estimated that 90% of all private student loans are cosigned.
The cosigner you get must have a good credit score as well as an established credit history. With the help of a creditworthy cosigner, you will be able to easily qualify for a student loan with the low-interest rate. You can either sign up for one of the student loan provided by the Department of Education or take out a student loan from a private lender. There are 3 main government student loans including Perkins, PLUS, and Stafford loan. Cosigner is usually not needed when you apply for a federal student loan. Government student loans are for students who can demonstrate financial needs.
You can apply for the private student loans if you don’t meet the criteria of the government student loans. To get approved for a private student loan, you must meet several requirements including good credit score, good income, and a citizen of the USA. The average income of students who get approved for the loan is $25,000. Summer jobs that you take up are also counted as income sources.
If you apply without a cosigner, you will pay an interest rate above 10%. Students without cosigner get higher interest because they are considered as as belong to a risk category by the lender. Some of the leading private student laon lenders are Discover, U-fi and Sallie Mae.
When shopping for a student loan, you can use a loan comparison search engine to compare the loans. The loan comparison search engine will outline the fixed/variable interest rate, estimated monthly payment, and the eligibility criteria of the student loan. You can use an amortization calculator to calculate the total cost of the loan.
Before applying, you should first use an amortization calculator to calculate how much you need to pay back each month. Many private lenders lets you get pre-approved by filling an online form without hurting your credit scores. The purpose of filling in the online loan request form and getting pre-approved is to find out the interest rate. Once you know the interest rate, you will be able to calculate the total cost and monthly payment of the loan. You will then be able to compare the student loans and find out which one is the most affordable.