Student Loans

Private student loans are provided by private lenders — banks, credit unions, and online lenders. You can use private loans to pay for education costs and living expenses, which your federal education loans might not cover. Interest rates and terms on private student loans can vary, depending on your financial situation, credit history, and the lender you choose.

You can use private student loans to pay for education-related costs and living expenses, which your federal school loans might not cover.

Some uses include:

• Tuition and fees
• Room and board
• Housing utilities
• Meals and groceries
• Books
• Supplies
• A personal computer you’ll use for school
• Dependent childcare expenses

There are several types of student loans:

• Federal student loans are offered by the U.S. Department of Education and have interest rates set by Congress. They provide benefits and protections like deferment, income-driven repayment, and loan forgiveness.
• Undergraduate student loans include both federal and private loans for undergraduate studies.
• Parent PLUS Loans are available to parents and require a credit check.
• Graduate student loans can help pay for grad school, including federal and private loans.
• MBA student loans are specialized loans for business degrees.
• Law school student loans can be used to cover expenses for law degrees.
• Medical school student loans help finance med school and may allow deferred payments until after residency.

The EPIC FCU marketplace allows you to compare real, pre-qualified student loan rates through a single form. It operates similarly to Expedia or Google Flights for student loans. You can compare repayment plans from multiple lenders, including APR, monthly repayment, and total repayment amount.

Student loan interest works by adding a percentage of the loan amount to your outstanding balance over time. A portion of each monthly payment covers the accrued interest, while the remaining amount reduces the principal balance. Lower interest rates can help you save money over the life of the loan and pay off debt faster.

A fixed-rate stays the same over the loan term, meaning your payments won’t change. A variable rate can fluctuate, potentially increasing over time, which could raise or lower your payments.

The drawbacks include:

• No federal benefits or protections like deferment, income-driven repayment, or loan forgiveness.
• Limited repayment options compared to federal loans.
• Potentially higher interest rates for borrowers without excellent credit or a cosigner.

You can borrow up to 100% of your school’s cost of attendance, minus any other financial aid. The amount you can borrow depends on factors like your credit history, cosigner’s credit quality, and the lender’s limits.

For in-school loans, funds are sent directly to your school, which uses them for tuition and gives you the remainder for other expenses. Your school sets the disbursement date.

For refinancing, the new lender pays off your existing loans and gives you a new loan with different terms.

You can apply for private student loans at any time, but it’s recommended to apply as soon as you know you’ll need them. It can take 3 to 5 weeks to receive the funds, depending on the lender and your school, so applying early is advised.

To qualify for a private student loan, you typically must:

• Have a qualifying credit score or a cosigner with one.
• Have a qualifying income and debt-to-income ratio (DTI) or a cosigner with one.
• Be enrolled in an eligible education program.
• Be a U.S. citizen or legal resident with a Social Security number.
• Be at least 18 years old with a high school diploma or equivalent (or have a cosigner).
• Use the loan for education purposes only.

You can get a student loan with bad credit, but you may need a cosigner. Federal loans don’t require a credit check, but private loans do. A creditworthy cosigner can help you qualify and secure a lower interest rate.

In most cases, yes, especially if you have limited or poor credit. More than 90% of private student loans for undergraduates are cosigned. Even if not required, adding a cosigner with good credit can improve your chances of qualifying and securing a better rate.