08.24.09 | Private Student Loan Benefits Take Center Stage
We’ve all heard the saying, read between the lines, but most of us don’t bother. I mean, can you honestly tell me you read the terms and conditions when you purchase something? You probably just scroll down to the bottom and click accept. Am I right? I know I’m guilty of the latter. I really should read the fine print – we all should. The devil, after all, lies within the details. Last year my friend April learned this lesson the hard way.
April attended Northeastern University from 2004-2008. During that time she amassed $35,000 in private student loan debt and about $20,000 in federal. She now holds a BS in Philosophy from a very prestigious university with no job to speak of. Understandably with no income she has been unable to make her $300 monthly payment. But no worries, she can put those loans in deferment, right? Wrong. Had she known what she was getting herself into she probably would have gone with another lender.
She figured since she was able to defer her federal Stafford and Perkins loans (you have up to three years of deferment time on federal loans) she’d naturally be able to do the same with her private loans, but that was not the case. The only deferment options available to her were a 48 month in school deferment and 36 month active-duty deferment for military personnel. There was no deferral benefit for economic hardship. Yikes!
Now she is in way over her head. Her debt is mounting, late fees are being assessed, her credit history is in complete disarray, and her co-signer is now being affected. Welcome to the world or adulthood.
When I asked April if there was one thing in particular she wanted me to be certain to convey in this blog she said, “Tell them to ask a lot of questions. Tell them to do their homework. Don’t be content to let the school’s FAO or a family member do all the work for you, which I did. Know YOUR benefits.”
Some of the most common benefits you will find in the market today include:
- 12 Month Economic hardship deferment
- No origination, guarantor, or prepayment fees
- Exclusive 2% graduation reward based on your outstanding principal balance
- Rates as low as Prime minus 0.50%, based on credit evaluation
- Repayment does not begin until six months after you graduate or leave school
- Co-signer release
The six month grace period and economic hardship deferment option are two of the most highly sought after benefits with the economy still on the mend.
So my recommendation is to heed April’s warning and pay close attention to the benefits extended to you if/when you take out a private student loan. It is far too easy to just scroll down to the bottom and click accept. Read between those lines. Sometimes it’s what you don’t see the first time around that can hurt the most.
Fore more information or to compare private students loans (click here).
ScholarshipPoints code: LOANBENNY
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wow now i learnd not to just scroll down and click get started or ok . because that is what i did last week on a student federal loan w/out reading the info:0
August 27th, 2009 | #
do not think i will take out any kind of loan unless i have to.
August 27th, 2009 | #
hmm interesting
August 28th, 2009 | #
cool
September 1st, 2009 | #
wow…glad i read that as i am looking to take out a private loan right now…so i know what to ask the lender when i sign up for it thanks!!!
September 4th, 2009 | #
this was very interesting… thank you
September 7th, 2009 | #
Very sound advice! I think that many people not only don’t know what to ask, they also don’t care about the terms in a private loan. When you are asked to sign a private student loan, there is a brief moment where you might consider what’s between the lines, but for the most part, getting the money to pay for your expenses is your top priority. We need to be educated! Thanks for the lesson!
September 15th, 2009 | #
OMG! thats horrible but it happens to alot of people they take out lots of loans and think when you graduate your gonna start your career! which isnt the case its lots of people who have degrees and have nothing to show for it! I also know that i never read the terms of agreement, maybe i should start! especially when your signing your name to something you have to pay back out of your pockets!!
September 19th, 2009 | #
The economy makes me scare of loan! sorry.
September 28th, 2009 | #
very informative…
September 29th, 2009 | #
This was VERY helpful since I am planning to take out a loan if my scholarships and federal student aid cannot cover my yearly expenses. THANK YOU SO MUCH!!!
September 30th, 2009 | #
many students are taking out loans and me as well because i want to attend a private school.
October 4th, 2009 | #
I don’t plan on taking out lonas, but this is good information.
October 7th, 2009 | #
unfortunately most of the time, especially now that the gov’t isnt giving as much to students, you have to take out more than just a stafford loan. last year my stafford loan and my grants were enough to cover most of what i had to pay. this year i got completely screwed over and am scrounging for cash to pay what wasn’t covered for fall and still have to find money for spring bills which are due in dec. im going to end up having to take out another loan and will definitely read the terms and fine print bc of that problem.
October 7th, 2009 | #
Nah, doesn’t convinced me.
October 9th, 2009 | #
It convinces me. I like it. Thanks:)
October 13th, 2009 | #
I thought loans were difficult to understand when I first attended this fall at UW-Milwaukee. I’m still trying to understand when I have to pay the loan back.
October 14th, 2009 | #
people tend to not take loans but their not that bad…
October 15th, 2009 | #
This is all new to me. I am getting ready for my ACT and trying to get scholarships to help with the cost. I am concerned about getting the right loans. My fear is that after I graduate from college will I be able to get a teaching job, afford my cost of living, and yet start paying my loan debt. Hopefully staying informed and lots of research will help me through this process.
October 25th, 2009 | #
I am going to take out a student loan, there is no way me and my parents can afford college bills right now.
October 26th, 2009 | #
I DONOT LIKE A LOAN i want to get all scholarship
October 27th, 2009 | #
I hate that this happened to someone, but will benefit the rest of us to make sure we read that small print. thanks
October 28th, 2009 | #
I NEVER DEAL WITH LOANS. TIMES ARE TOO HARD TO HAVE TO STRESS OVER RE-PAYING A LOAN. TAKING OUT LOANS JUST PUSHES YOU MORE INTO DEBT!
October 28th, 2009 | #
Always read the fine print…… we all need to be careful with loans or anything else we do.
October 28th, 2009 | #
i dont like loans
November 3rd, 2009 | #
taking out loans can be critical…
November 5th, 2009 | #
loans are dangerous, haha
November 11th, 2009 | #
this is a great article thank you
November 20th, 2009 | #