Who qualifies for private student loans?

Private student loan qualifications

Most of the qualification criteria for Federal education financing continue when you apply for student loans from a private lender. The core issues are very similar.

• Students enrolled (or about to enroll) in qualified post-secondary schools are eligible. Unlike Federal loans, some private student financing is available for those attending non-accredited institutions and sometimes for those students not having at least a half time workload status.
• Students or parents may qualify as eligible borrowers.
• A student loan application from someone who is currently in default on other education loans will not qualify.

There are some qualification differences between Federal and private student loans that may prove significant. The most critical difference involves borrower credit. Federal student loans do not require credit score evaluation. When you apply for student loans from private sources, a credit check and examination will be done.

Private student loans, since they are made by independent lenders, need to be “underwritten” to ensure the creditworthiness of borrowers. While the credit restrictions are not overwhelming, this requirement sometimes affects your qualification for financing.

Since interest rates are a bit higher than Federal student loans, borrowers should have sufficient cash flow to project successful repayment after the deferment period ends. The good news: Most students and parents who qualify for Federal education financing should also qualify for private student loans.