Alternative Student Loan

Alternative student loans provide money to pay for a college education for someone who has not adequately prepared for the costs of higher education tuition. Perhaps a college student does not qualify for federal or state government financing because personal income or a parents income is too high. Maybe the education seeker has reached the limit of the state and federal government financing programs and still desire to further their education through extra classes during the summer. Perhaps the borrower is switching careers and the traditional government financing will not issue money specific to the career chosen. An alternative student loan could provide the necessary money to pay for tuition, books, or room and board. There are various lending institutions that offer this type of additional financing. Many universities and colleges will offer their own financial aid to those who do not qualify for the federal and state government lending programs. Those who do not qualify but still have a hard time paying to attend college usually get first consideration when applying for school administered financial aid plans. Current college students and their parents or guardians are typically eligible to apply for any number of optional lending programs.

God makes promises to His children in scripture about their well being. "Therefore take no thought, saying, What shall we eat? or, What shall we drink? or, Wherewithal shall we be clothed? for your heavenly Father knoweth that ye have need of all these things. But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you" (Matthew 6:31-33). Be encouraged by that promise as considering the application for an alternative student loan. Typically alternative student loans are harder to get. Unlike a government issued financing, these plans are not subsidized by the government. Also, they require the borrower to begin repaying the balance right away in monthly payments. The interest rate is almost always based on the borrowers' credit history; whereas a government issued lending program has a fixed interest rate regardless of the borrowers' credit reporting score. This is why municipal sponsored lending programs are becoming the norm on college campuses across the United States.

Most banks and educational lending institution issue a lending plan for five to fifteen years. The interest rate of an alternative student loan is on average six to eight percent when the national interest index is below 4%. Usually a new college attendee will need to have a co-signer to qualify for a private lending program. Most scholars lack viable full time employment, an established credit history, and means to repay any alternative student loans. The lending institutions advise the student to recruit their parents, guardians, or adult relative to co-sign. Borrowing a lot of money to pay for college is a huge decision. The borrower needs to be aware of the risks involved and the consequences if they default. It may seem like easy money, but keeping in mind that it is a loan with interest and that it needs to be repaid should help a borrower stay on track.


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