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Considering a Private Student Loan? Proceed with Caution!

The majority of college students who borrow money to pay tuition opt for government loans because they are easy to get, have reasonable interest rates, and are the first suggested by schools and guidance counselors. However, they are not the only option.

It is possible to secure a private education loan to pay for college. This can be especially appealing if a bank has offered you additional benefits for borrowing from them or if your government loans are not enough to cover all of your college expenses. Some private loans even offer interest rates comparable to government loans.

Though there are benefits to using a private or alternative education loan, there are also a few things you need to consider.

Interest Rates Vary

Private loans do not always offer a fixed interest rate, like government loans. Nearly all of them are variable rate commercial loans. This not only means the total cost of your loan over time is not guaranteed, it also means a credit check will be required – not the case with a government education loan. Private student loan rates can be as high as 18%, so you need to understand the conditions and consider the long-term consequences of borrowing privately.

Repayment Terms are Strict

Your repayment terms are also not as generous as they are with a government student loan. Obviously, if you fail to repay any loan you will have problems, but private lenders tend to offer less flexibility when it comes to repayment. Your loan repayment also begins immediately, unlike government loans that offer forbearance or deferment if there are financial hardships. In some cases, borrowers of private student loans will need to begin repaying before they even graduate.

Fees Might Be High

Many lenders charge an origination fee, which means you could pay an additional 3% to 10% on your loan. Late fees might also apply sooner and be much higher with a private loan than they are with a government loan.

For some, the advantages – or the necessity – of a private student loan outweigh the disadvantages, but this is often not the case. Some borrowers are just enticed by bank offers and eventually realize their private loans were a mistake.

If you are concerned about the consequences of a private loan you took to pay for college or you are struggling financially to repay any type of student loan, we can help. Contact the Law Offices of Robert M. Geller at 813-254-5696 to discuss your financial situation.

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$Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
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$Law Offices of Robert M. Geller, P.A.
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(Wells Fargo Financial Center)
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St. Petersburg, FL 33701
T: (727) 532-3939


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23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320





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At the Tampa Bay law firm, the Law Offices of Robert M. Geller, P.A., we help people with consumer bankruptcy matters in the Tampa Bay-St. Petersburg,  Florida communities such as Clearwater,     St. Petersburg, Tampa, Thonotosassa, Riverview, Lutz, Plant City, Brandon, Carrollwood, Wesley Chapel, St. Petersburg Beach, Lakeland, Mulberry, Dade City, Pinellas Park, Largo, Seminole, Odessa, Oldsmar and Lithia, and counties such as Hillsborough County, Pinellas County, Pasco County, Polk County and Manatee County.