Three Private Student Loan problems – and how to solve them | 03.11.10

Posted in Private Student Loans By Student Loan Network Staff

We get a boatload of questions daily in our Financial Aid forums concerning private student loans. While such a loan can help you close the gap between your federal loan allowance and your total cost of education, there may be some concerns. Here are a sampling of questions found in our forums and some ways to answer them.

1. “My parents don’t want ANOTHER loan hanging over their heads.” – As you may have heard, the U.S. economy hasn’t exactly been great last couple of years. Virtually no outside lender will approve you for a private student loan without a cosigner. But Mom and Dad, already burdened by the cost of education, might feel queasy at the thought of borrowing even more and facing a potentially damaging interest rate. One way to solve this problem is to take out a Parent PLUS loan, which has a fixed interest rate of 8.5% and the payments can be deferred until after graduation.

2. “My parents have lousy credit.” – Again, you will almost definitely need a co-signer for a private student loan these days. One trick is to ask your parents to apply for the Parent PLUS loan. If they have bad credit, they will get denied. You, however, can become eligible for up to $6,000 more per year with an unsubsidized Stafford loan. You may also seek out another trusted adult as your guardian. (Read this checklist for finding a private student loan co-signer.)

3. “I don’t know which lender to trust.” -  Sad to say, there are a LOT of shady lenders out there who would love nothing more than to sucker you into a bad loan. Always (repeat: ALWAYS) shop around and perform your due diligence before providing personal information to a lender. One great place to start is right here, with the Private Student Loan comparison tool.

ScholarshipPoints code: PSLPROBLEMS

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17 Responses to “Three Private Student Loan problems – and how to solve them”

  1. Jameala says on April 13, 2010 at 7:12 pm:

    thanks for the information cuz I’m about to start applying for loans soon

    Reply To This Comment
  2. Marie says on March 31, 2010 at 6:04 pm:

    Being an independent student I hope I can qualify.

    Reply To This Comment
  3. margarita says on March 31, 2010 at 3:00 am:

    pretty basic but the Parent PLUS loan info is useful :]

    Reply To This Comment
  4. Daniel says on March 27, 2010 at 2:56 am:

    Really helpful! I shall look into Parent PLUS and unsubsidized Stafford loans :]

    Reply To This Comment
  5. Vanessa says on March 25, 2010 at 11:41 pm:

    Good information.

    Reply To This Comment
  6. wendy says on March 21, 2010 at 6:44 pm:

    thanks goodness i read this before I started to get a loan from a shady place…

    Reply To This Comment
  7. Stephanie says on March 17, 2010 at 10:31 pm:

    This information was very helpful. Thank you!

    Reply To This Comment
  8. Brittany says on March 17, 2010 at 2:09 pm:

    so helpful. thanks!

    Reply To This Comment
  9. Darryl says on March 16, 2010 at 7:25 pm:

    I remember talking with my Admissions Counselor about this information, but this is so much simpler.

    Reply To This Comment
  10. ash says on March 15, 2010 at 11:53 pm:

    thanks a bunch

    Reply To This Comment
  11. Elissa says on March 15, 2010 at 12:16 pm:

    Thank you for the information. I have never thought much about student loans before.

    Reply To This Comment
  12. Lina says on March 13, 2010 at 5:46 pm:

    Excellent information

    Reply To This Comment
  13. shannon says on March 13, 2010 at 2:18 am:

    I can use this information!

    Reply To This Comment
  14. Mariana says on March 12, 2010 at 3:09 am:

    Thank you for the information. It is a good thing that you are encouraging us to what is out there, consequences/possibilities that might pop up. Thanks!!! :D

    Reply To This Comment
  15. Ryan REich says on March 11, 2010 at 11:04 pm:

    With my credit and already being in so much debt i find it hard to try and get a student loan to get the rest of my education. How is it possible to get a low interest rate and be able to pay it back if you are already knee deep in expenses that cant be helped??

    I have searched alot and still cant find a salution to this common tail. especially now when the economy is struggling so much.

    Reply To This Comment
  16. amanda says on March 11, 2010 at 9:30 pm:

    Very helpful info. I will have my dad check into the Parent PLUS loan.

    Reply To This Comment
  17. maira says on March 11, 2010 at 9:26 pm:

    if it wasnt for all the information you give us i will be so confused thanks

    Reply To This Comment

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