Student loans are by far one of the most common types of debt in the United States. If you want to help your youngster achieve their professional goals by allowing them to get a degree in their chosen field, there’s a good chance you’ll need to access a loan from a lender to make the process more affordable. After all, the average degree can cost thousands of dollars.
However, not every loan option is alike. Parents can choose from a range of different types of lending solutions to support their children, or even gain access to higher education themselves. So, how do you decide if you should consider a private option for lending, rather than the standard public and government-focused student loans?
Public, Private, Parent Student Loans
Private student loans are one of the ways people can finance their education without having to pay for materials and lectures out of pocket. They’re the common alternative to the public or federal lending option which most students will pursue first. In general, federal and public loans are often seen as the ideal option for lending, because the repayment terms are more flexible, and there are sometimes loan forgiveness options available.
However, public options aren’t always the right solution for every borrower. Offered by companies and lenders outside of the department of education, private loans can be a more flexible and effective way to pay for costs of school in certain circumstances. If you’re looking for parent loans for college with a low rate and a flexible range of terms, a private solution might be the ideal option for you.
Benefits of Each Loan Option
Many people avoid private lending because they assume it’s going to be more expensive or problematic than the public alternative. However, this isn’t always the case. While it’s true you won’t get the same loan forgiveness options with private solutions, you will have access to a lot more freedom when it comes to things like the lender you choose and the amount you borrow. Some of the biggest benefits of going private include:
- Excellent terms for some lenders: Those with all kinds of different credit backgrounds can apply for private student loans. In some cases, people with poor credit are more likely to be accepted for these options than public alternatives. Additionally, if you have good credit, you could access more favorable terms, such as long pay-off times and payment deferment options while a student is still in school. They can even be more affordable for some well-qualified borrowers than the more common federal solutions.
- Freedom of choice: There are only a handful of public options available for lending in the current market, which means you may be limited on your options. However, there are dozens of different kinds of private lenders out there. This means you can research your options and find a company you feel the most comfortable working with. You can have complete control over who you want to borrow from.
- Higher limits: While public lenders place strict rules on the amount of money a person can access, private alternatives are a lot more flexible. Most of these services allow users to borrow enough money to cover all of the different aspects of higher education, from board, room and living expenses, to the cost of attendance, resources and more. There’s even the option to pursue multiple degrees or go beyond an undergraduate degree with the same company in some cases.
- Wide availability: There are also restrictions on the people who can actually qualify to access federal loans. Some non-citizens aren’t eligible, alongside those who only attend classes part-time. However, private lenders are more likely to adapt to suit your situation. It’s much easier to find something to suit you.
Which Loan Option is Right for You?
Though they’re not the right option for every consumer, a private student loan can be an excellent option for people with good credit, or access to a co-signer, students who don’t plan on taking advantage of forgiveness options, and international students. They’re also ideal if you’re looking for more flexibility, freedom of choice, availability, and higher limits. It’s worth exploring these options if you’re not sure whether a public loan is right for you or your child.