Private loans infromation

[italianstallion17]

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Hi y'all,
I don't know what threat to place this in, but im hoping for information on this subject from anyone! I am a first-generation student, and I'm navigating the process of funding my education on my own. I understand the basics of federal loans, but I am looking for insight into private loans.

If I take out a loan for tuition and the Cost of attendance, but later realize I need additional funds for living expenses, how does that process work? Would I need to submit an entirely new application with the same or a new lender, or can I request an increase from the initial lender? Since private loans may be my only option, I’d appreciate any information or personal experiences you can share

Thank yall for reading.

 

[JaynaAli]

Not many people around here probably have experience with private loans, since they haven’t really been needed before. Hopefully someone knows and can chime in. I would assume it depends on your loan terms, your creditworthiness, and all that. The private loan companies can do whatever they want/whatever you agree to.

If you have the ability to take out federal loans up to the new 200k limit, you should do that before trying for private loans to make up and the gap. Cost of attendance should include living expenses and most schools are pretty generous with what they estimate you’ll need, so needing more beyond the published cost of attendance is pretty rare. But you may need private loans to bridge that gap between the COA and the 200k federal loan limit.

 

[vampyrica]

I took out a private loan for undergrad, i’ll come back to this post shortly

 

[vampyrica]

okay i'm back and could use a distraction, so let's talk private loans.

i got a 20k private loan from citizens bank in 2023 for undergrad. i needed my parents as a co-signer. this loan has a 7.11% interest rate which is just about what some of my federal loans are (anywhere betwwen 2-8%). part of my loan is that i have to pay the interest each month while i'm in school, so when i first got it, it was around $115-$120-something per month. now that i've paid some of it down, it is $100 a month. if you go down this route with a private loan, someone is going to have to pay the interest each month so it doesn't accrue while you're in school. i'm sure there are other loan providers that let it accrue with no payments while in school, but that is just going to add an additonal mountain to pay off.

i almost needed extra funds, so for that process i would have had to request a loan increase. with citizens i am able to take out a total of 40k from one application, if i needed more i would have had to submit an additional application for an extra 40k. they can provide up to 400k in private loans for a healthcare degree. before jumping the gun and taking out the private loans, i would start a spreadsheet with your expected budget now. car payments, tuition, pet food, gas, groceries, fun money, emergency fund etc. see what you're roughly expected to spend each month and at that point i would ask yourself: would a per diem/part time job be able to pay for the remaining expenses or is a private loan needed? i know many people suggest not getting a job atleast during your first year, but we are faced with a difficult situation where it may be required.

not sure if that was helpful at all or if it made sense, my brain is scrambled this morning

 

[VIN-Foundation]

Have you seen the VIN Foundation's Student debt Center?

They have a site on Private Student Loans