Talking to Parents or Relatives about Student Loans
Students across the country are being burdened with debt and are finding it difficult to speak with parents about going to expensive private colleges. Meanwhile, parents are facing tighter budgets and the realization that the big name school might be out of the question. However, keep the following tips in mind when having the student loan conversation with your parents, because you will need a co-signer…
It is very difficult for students to be approved for a private student loan on their own. If you are a student borrower, without an established credit history and a steady income, you WILL need a co-signer for a private student loan. Further, your co-signer will need to have a good to excellent credit rating.
Before approaching a potential co-signer with a request for help applying for a loan, prepare the following info to impress your co-signer.
- Do the math carefully to justify why you need to borrow the amount you are seeking
- Keep in mind that you might need to borrow for more than one year of school
- Estimate what the monthly payments are likely to be for all of your student loan borrowing
- Estimate what your income might be after graduation (the career office at your school might be able to help you make these estimates)
- Make sure that your expected monthly payments would fit in your likely future income (experts advise that student loan payments not exceed 8-10% of your gross income)
- Demonstrate your ability to be financially responsible – show evidence you can pay bills on time and stay organized with paperwork
- Research private student loan options and select the best loan for you with.