I just got accepted into NYU, but I’m not sure if I can do due to financial troubles.
I have the option for the federal loan, but that is at a 8.25% APR rate which is ridiculous. I wish to get a private loan but I’m not sure they would loan to my family because we have nothing to put down as collateral.
So, I’m just wondering, do banks require a collateral for a college loans, or do they operate their loan system differently for college students.
Comments
I’m not familiar with the process in New York. if your family is financially strapped for cash and do not make a lot of money you might be qualified for grant money or different types of loans that might be offered. I highly suggest you call or email the financial aide dept. at NYU and ask them if they can help you out and find a solution to your problem. The best information will come from them.
The interest rate for student Stafford loans is 6%. That is the one you want. The 8% is probably for the parent PLUS loan. They need to have decent credit, it doesn’t have to be great, but if they are denied for bad credit, the school will offer you an additional Stafford loan to help you pay.. it will be the lower rate.
You do not need (and should not) ever put anything up as colateral – especially your family home. It is not necessary.
Private loans are sub-prime and have VERY high variable interest rates, high processing fees, prepayment penalties and should be avoided at all cost.
This book has a great table in it with the different kinds of federal loans and the interest rates for each. Good luck.
