Student loans are traditionally secured through federal resources. There are, however, private student loans available from most major lending institutions. Students with good credit ratings can easily find private loans. Some banks offer alternative lending options for students who have run into credit problems. CoAmerica, Chase and Astrive are just a few of the private loan products available for students with less-than-perfect credit.
It is important to conduct extensive research for student loans, even when there are credit issues. Applicants should not jump at the first loan available, but compare loans with similar terms. A loan with a lower interest rate but with longer length of terms may not be the best deal. Use online calculators that determine total interest paid on loans to find the best deal.
Credit scores vary, as well as a bank's level of leniency with certain scores. To ensure a loan will be approved, find a cosigner. Make sure the cosigner has good credit. You can sell a cosigner on this type of arrangement by making sure the loan has a cosigner-release clause. This will relieve the cosigner of any obligation after the applicant begins to make payments on the loan.
Private student loans serve a great purpose. Students who have exhausted federal loans are often unable to pay those loans immediately, and subsequently amass poor credit scores. Private student loans that place less focus on scores allow students to continue their education and gain degrees that allow them to make more money. Many are able to get back on track financially and repair their credit.
Private student loans increase during times of economic instability. Many people see this as a time to sit out of the workforce and sharpen their skill set. The hope is that, by the time they have finished their education, the economy will be better, enabling the new graduate to return to the workforce with a new set of marketable skills. This is possible for those who wish to make such a remergence, even if they have bad credit.