“The lender I found on this site was very helpful. The loan was in my son's name, but I co-signed. The online application was very convenient. I do recommend sitting with your child, if the loan is in their name, and filling out the application at the same time. Between you, you'll have all the information you'll need, and, it's a good idea for parents to oversee the application process.
Before we applied, my son and I worked very hard to figure out exactly how much he'd need in a private loan. That's actually the most challenging part.”
Merle – mother of two college students
Private student loans
What is a private student loan?
A private student loan - also known as a college loan, an education loan or an alternative student loan - is a non-government loan made by a private lender specifically for college expenses such as tuition, room, board, books, and other associated costs.
Private student loans are based on credit score and usually require a credit-worthy co-signer. Private loans have different interest rates and fees. The pricing combination a borrower gets, if approved for the loan, is determined by the credit profiles of the student loan borrower and co-signer.
Private student loans come in two forms - certified and uncertified (also known as DTC, or direct-to-consumer student loans).
Certified private student loans require notification and verification by a school official prior to the student getting the loan funds. The school verifies that the student is not borrowing more than the total cost of education less other financial aid. Certified private loans are generally sent to the school to be applied to the student's account. Any remaining balance is returned to the student.
An uncertified private student loan does not require the school to certify the amount borrowed. Uncertified private loan funds are usually sent directly to the borrower.
Another important aspect of private student loans is the student loan co-signer. Students are often concerned about not getting a loan because they do not have a co-signer. A student loan co-signer is usually a requirement. You may not be approved without one, especially if you are an undergraduate without a credit history. Better pricing on the student loan is usually available only when applying with a creditworthy co-signer.