Finding Alternative Student Loans

An alternative student loan simply means that you are not relying on government resources and loan programs.  Instead, you would acquire this type of loan for your college expenses from alternative student loan providers.

Federal Loans Vs. Personal Loans

With an alternative student loan, you are essentially taking out a personal loan and will need to provide some form of collateral to the alternative student loan provider, so they have a means of collecting on your loan if you don’t pay it.  Whereas, if you don’t pay back a federal student loan, they have measures in place where they can garnish your tax returns, wages, and other items without having to hire additional lawyers, which an alternative student loan lender would have to if you hadn’t provided collateral.

Who Are The Alternative Student Loan Providers?

Alternative student loan providers are typically private lenders.  By private, this doesn’t mean your close personal friends and family, although many people seeking higher education have had to resort to asking a family member or friend for financial assistance when other methods have failed.  A private lender may be a bank, credit union, or similar banking institution that can offer you a loan to complete your schooling.

Alternative Student Loan Consolidation

If you are looking to finance your education and already have a lot of prior student loans through the Federal Government, you may want to consider alternative student loan consolidation.  This process would take your loans to a private lender, but allow you to combine them into one lump sum loan.  By doing an alternative student loan consolidation, your new alternative student loan providers will pay off your existing loans.  They then create a new loan (with additional funds for your schooling), and the entire amount of the loan is charged at a new annual percentage rate.

There are pros and cons to this approach.  The main advantage is that you can take additional money through your alternative student loan and complete your education.  The main disadvantage is that by compiling your student loans with a private lender, you no longer have the protections of the Federal Government for payback such as extended grace periods and forbearances.  Alternative student loan providers will expect payment as outlined in the terms of your contract and payment agreement, regardless if you are still in an in school status, or have not yet found a job post graduation.

Poor Credit Alternative Student Loan Providers

There are companies that cater to individuals with poor credit.  These poor credit alternative student loan providers make their money through the finance charges that you pay on the loan.  The poor credit alternative student loan usually means higher interest rates because you are a credit risk.  You may also be asked for a co-signor or other collateral before being granted an alternative student loan if your credit is poor.

There are advantages and disadvantages to obtaining poor credit alternative student loans as well.  The main advantage is that by taking out a poor credit alternative student loan, you can get more education and therefore better your situation with the promise of better job prospects in the future and a salary that will help you clear up your bad credit.  The main disadvantage is that you will likely pay higher rates on your loan and may not be able to take as much money out on an alternative student loan as you would like to.

Find Alternative Student Loan Providers Online

Whether you are looking to take out an alternative student loan with good credit, or a poor credit alternative student loan, the following resources can help.  You will also find information on alternative student loan consolidation.  The following alternative student loan providers are legitimate companies with a solid history of customer satisfaction and service.  They work with all types of individuals, even those looking for poor credit alternative student loan options, and those with other student loans being serviced by other providers.

Student Loan Consolidator

At http://www.studentloanconsolidator.com/private/, you can find out about alternative student loan programs as well as other useful tools to help manage your education.  The Student Loan Consolidator website has useful calculators to help you figure out your estimated payments, as well as the amount of personal loan available to you.  The website can also connect you with alternative student loan offers from a variety of providers and is a very popular website for poor credit alternative student loan resources.

Sallie Mae Smart Option Student Loan

At http://go.salliemae.com/sosl_int_stu001/, you can learn all about the alternative student loan offered by Sallie Mae.  The Sallie Mae Smart Option Student Loan avoids capitalized interest.  This means that you make payments on your loan while you are still in school.  However, the payments will be smaller because the payments are typically interest only on this alternative student loan option.  Sallie Mae is one of the most popular websites for student loans, and particularly alternative student loans.  Sallie Mae does service federal student loans, and can help you with new alternative student loans as well as with consolidation.

Even though you usually cannot consolidate personal loans into a federal student loan program, the annual percentage rates of Sallie Mae consolidation tend to be comparable to federal programs.  If you’ve been involved with federal student loan programs that were services by Sallie Mae in the past, and have a good track record, you already have a credit history with Sallie Mae.  So, when you go to perform an alternative student loan consolidation with them to get new funds for college, the processes are much simpler than if you were starting fresh.  However, even if you have never had a single student loan or other item serviced by Sallie Mae, the Smart Option Student Loan is by far the most popular alternative student loan offer online regardless of your credit history.