Paying for college can seem like a daunting task for students and their parents. Many students discover that they do not have enough financial aid awarded to cover the actual costs of attending school, after adding up their Stafford Loans, Work-Study, and other aid. The most popular type of loan, after a Stafford, is a Signature Loan. These loans are privately-funded forms of aid that can help you completely pay for your college costs.
Features of a Signature Loan
- You must be a student enrolled in a community college or university at least half-time. You must also be making progress towards a degree.
- You must meet the credit criteria; or you must obtain a co-signer to help you qualify for the loan and get a lower interest rate. This co-signer can be removed from the loan after 2 years, if you remain in good standing with repayment.
- High loan limits, so you can usually borrow all that you need to cover your college expense, if you choose to focus on your studies rather than working to pay for a portion of the costs of school.
- You do not have to begin repayments while in school; payments begin after a grace period following graduation. However, there is no repayment penalty, so you can pay your loan down as quickly as possible.
- There is a 15 year standard repayment schedule, but this can be extended if you have a higher aggregate loan balance. You can also make interest payments while in school.
- There are usually no administrative fees.
Students who need to borrow funds for their college expense may find that a Signature Loan works very well for them. These loans should only be obtained after all other funding sources, including Stafford Loans, have been exhausted. It is important for all borrowers to realize that they should only borrow what is necessary for them to meet the costs of their education; borrowing excessively can lead to financial hardship after graduation. Students may find that working part-time while in school is not only a wise option for them, financially, but is also a good way to ease into the world of employment. Before obtaining any loan, it is best to talk it over with your financial aid counselor to find out if you qualify for any other grants and scholarships, which you will not have to repay.
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