Pre-College Loans are exactly like what they sound. They are loans taken out to cover the cost of education prior to a college degree course. They cover the cost of a child’s private school tuition from kindergarten through 12th grade.
Primary and Secondary school loans are a relatively new, but increasingly common loan type. Some parents are so intent to keep their kids out of public school and to put them on a good path in life early on that they are willing to take out loans to pay for private education for their children.
The average cost of private school has risen right along with the cost of a university education. The average private school price tag will run around $20,000 per year. Paying for private school for up to thirteen years could become a heavy financial burden for some parents. The risk in taking out a pre-college loan could mean that parents will be simultaneously paying back the loan while taking out new loans for their children’s college education.
If you must take out a pre-college loan, be aware of the amount you will need to pay back when the loans come due and plan ahead. Try to also put back some savings, even if it is small, to help cover the first year of university without needing to take out another loan. Pursue other types of federal financial aid including “free money” like grants and scholarships.
Interests rates on pre-college loans can range from as low as 4% to 20% with vastly different repayment periods. Better rates can be found by those with a good credit history who show proof of adequate income to support quick repayment.