Student loan gap financing refers to the financial aid that you still may need to acquire to pay for your tuition. After you’ve exhausted your scholarship opportunities, grants, work studies, and federal student loans, you may still need to borrow from a private loan lender to bridge this ‘gap’ in the financing.
How To Obtain Student Loan Gap Financing
It’s important to keep in mind that this is a last resort for funding. Make sure you thoroughly exhaust all other forms of gift aid and federal loans first. Private student loans come with higher interest rates and are altogether more expensive as compared to federal student loans. However, they could mean the difference between attending college and not attending at all.
Also, taking a private student loan to bridge the gap is still a smarter choice than dipping into your retirement funds, tapping into your home equity, or borrowing against your credit cards.
Things To Consider When Taking A Gap Loan From A Private Lender
Unlike federal student loans, which have standard terms, conditions, and interest rates, private loans differ from one lender to another. Some things you must consider when borrowing from a private lender are the interest rates, prepayment or origination fees, application process and requirements, repayment options, and flexible deferment.
College Raptor can make shopping for a private student loan a breeze. With our free Student Loan Finder, you can compare lenders and interest rates side by side.
One last thing you must make sure about is that the loan is certified through your school. This ensures that your school verifies your loan gap financing requirements so you don’t borrow too much or too little.