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  1. 1. For many families, borrowing is one of the key components of financing a college education. To that end, a family may utilize one of the many education loan options that are available, such as private education loan programs available fromlenders.When a family borrows an education loan, they essentially rely on future income sources to pay college costs, as they will be repaying the education loan back in the future. Since loans need to be paid back, the loan repayment will be an added responsibility in the future and one that needs to be taken very seriously. Loans are not free and actually can be very expensive. It is imperative that if you do borrow a private education loan that you be a smart borrower, as decisions that you make now will impact your life style and options in the future. Students should first maximize loan borrowing through the Federal Direct Stafford Loan Programs, if eligible, which have favorable terms, various repayment options, and typically are the lowest cost loans.westernsky
  2. 2. Private education loans, also referred to as alternative loans, arecredit based loans offered by lenders, including banks, credit unions,state agencies, and private companies It is important to understandthe role of credit in the private loan process, as private loans are notautomatic financing options
  3. 3. Private loan programs use a borrowers and co-borrowers (ifapplicable) credit worthiness as a determinant when consideringapplicants for private loan eligibility A borrowers credit worthinessnot only determines if they are approved for the loan, but has abearing on the interest rate assigned to the loan
  4. 4. Ultimately, when talking about private loans, your credit rating is avery important contributing factor in the private loan review processAlthough specific lender underwriting guidelines are proprietaryinformation and unpublished to the consumer, it is known that thestrength of the applicants credit is a large factor
  5. 5. With that said, it is a worthwhile exercise to review your personalcredit standing regardless, as establishing and maintaining goodcredit is vital for many reasons In general, credit is the basis of mostconsumer borrowing, thus being proactive with credit is a positivepractice
  6. 6. Before borrowing a private education loan, you should carefullycompare the terms, repayment details, and total cost of the loan,including interest rate and fees Loan terms and repayment detailsvary greatly among lenders and between loan programs, so do besure to compare loan details carefully and ask the lender manyquestions when reviewing loan programs
  7. 7. Important information to inquire about includes whether the rate isfixed or variable, if the loan incurs any fees, if there is a prepaymentpenalty, what the length of the repayment term is, and if there areany deferment or forbearance provisions available Loan applicantswill be provided with a disclosure notice with the financing details ofthe loan which provides a good opportunity for the borrower toreview the minute details of the loan prior to committing
  8. 8. Just be sure to ask many questions and compare several loanprograms before committing to a specific
  9. 9. Check out the website somekeyword for a complete guide on howwesternsky to compare private loan programs
  10. 10. westernsky