Personal Loans

Lenders can help you find funding through a variety of personal student loan programs. When you use your credit properly, you can pay for college without being crushed under a mountain of debt.

Most personal student loans are offered at rates comparable to credit card interest rates. The amount you can borrow and the interest rate you receive are based on your income, assets, and employment record. A low credit score may mean a higher interest rate on the loan. Typically, repayment of interest and principle on personal loans can deferred until you leave school or drop below half time but deferred interest is added to the loan principle.

If your credit isn't established enough for a loan, a parent, relative, or family friend may be able to co-sign for you. Be aware, however, that any problems you face during loan repayment will also affect your co-signer. Not only will they be notified of late payments or defaults, but the bank may hold them liable for repayment of the loan. Be sure your co-signer is aware of these risks before agreeing to help you.

Interest Rates and Your Major
Your choice of a major or your academic record can affect your loan package. Students in lucrative majors, such as law, medicine, or business, often receive the best loan deals because banks expect them to earn larger salaries more quickly than graduates in other fields. Students in law or medical schools are also more likely to require larger loans, which make the lender more money from interest payments.

Contact the banks where you and your family already do business. Many banks extend personal student loans at discounted rates to existing customers, family members of mortgage customers, or credit card holders. Personal student loans require more research than Federal student loans, but finding a good plan with a competitive interest rate is a valuable reward.