Quick Answer: Private student loans offer poor repayment options compared to federal loans and are extremely difficult to discharge in bankruptcy. Experts recommend avoiding private loans entirely, as approximately 90% of cosigner release requests are denied despite lender promises.
Question:
Dear Steve,
I am a current junior at a university. I still have a ways to go before I complete my Bachelor Degree. I have no desire to go any further than a Bachelors. This is my second semester at university and there is not very much left over of my grant and loans after tuition.
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I would like to know the best lender you can recommend for people seeking private student loans? Also, which payment program do you consider to be the best one for repayment of student loans.
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Olivia
Answer:
Dear Olivia,
You have to keep in mind that a private student loan is just a loan that has few, if any good repayment options if you run into trouble. Additionally, as it stands right now, private lenders will fight you hard if you try to discharge a private student loan debt in bankruptcy.
At this time the best way to finance college is to go to a school you can afford to work your way through to come out without student loan debt. Outside of that the federal student loans give you the best repayment options.
When it comes to private student loans I would not wish them on my worst enemy.
Even the promises of private student lenders can’t be trusted. For example, studies have now demonstrated that about 90% of people who request a cosigner release are not granted it. That’s even when the lenders said it was a feature of the loan.
As far as I’m concerned, most private student loans should be called sucker loans.
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