Personal Loans

Private lenders can also help you pay for your education through a variety of personal student loan programs.

Most personal student loans are offered with interest rates that are comparable to your credit card's interest rates. The interest rate and repayment of your personal loan are based on your personal credit history and employment record.

If your credit is poor or nonexistent, you may be required to find a co-signer for your personal loan. A parent, relative, or family friend may be a co-signer on your loan. Be aware, however, that any problems you face while repaying your loan will impact your co-signer. Not only will they be notified of late payments or defaults, the bank may hold them liable for repayment of the loan.

Because of market competition, many personal loans come with benefits such as online access, direct deposit, and interest-only payments.

Your Major and Your Interest Rate
Your choice of major and your academic record may affect your interest rate, the amount you can borrow, or your ability to get a loan. Students in lucrative majors, such as law, medicine, or business, sometimes receive the best rates and extras on their loans because banks expect them to earn larger salaries more quickly than graduates in other fields.

When you begin your personal loan search, start by contacting the banks where you and your family already do business. Many banks offer discounted personal student loans to the family members of mortgage customers or credit card holders. Having a family member or guardian co-sign a personal loan can secure a lower interest rate, but remember that the co-signer will be equally responsible for repayment of the loan and their credit can also be affected. Be sure your co-signer knows the responsibility of co-signing for a personal loan, and work out a payment plan that makes them comfortable.

Personal student loans may require more work than other sources of student aid, but a good personal loan can help you complete your financial aid plan.