Paying for college can be a burden for many families. For students attending private colleges, it's even worse. While government loans can help you pay for your education, there are limits to how much you can borrow each year. What are the benefits of using a private student loan offer to pay for college when your financial aid is low?
1. Higher borrowing limits
The Department of Education limits the amount of student loan borrowing. This can make paying for college difficult if you're going to a more expensive school for an undergraduate degree, or if you're preparing for graduate school. Some of the best private student loan lenders may allow you to borrow up to 100% of your education costs, which can ease your worries about being able to pay tuition, fees, and other expenses while in school.
2. Possibly lower interest rates
A key feature of government student loans is that you typically enjoy a lower fixed interest rate. But private student loan rates are near record lows amid falling interest rates. This is a good incentive to get a private student loan early, and if your parents help pay for your tuition, private student loans can cost less than government loans and even offer interest-free student loans. Of course, 學生貸款免息 you should also observe the latest private student loan interest rates and pay attention to related information, interest-free student loans often appear.
Disadvantages of Private Student Loans
Loss of repayment option
A key feature of government student loans is the option of income-driven repayment. Income-driven repayment plans, which determine your repayments based on your income and family size, help ensure you can afford what you have to pay. Private student loan lenders are not required to offer income-driven repayments, and while some may offer flexible repayment options or temporary hardship programs, they are not obligated to do so. So if you lose your job, you may find yourself in financial trouble if your private loan repayment options are limited.