Shopping for a School Loan!

A few things to consider when shopping for a financial lender:

A child's K-12 education is perhaps the most important investment a parent will make, as it is during these formative years that academic habits are built. And that is why more and more families are choosing to place their children in private schools.

But private education is expensive. With rising tuitions, many parents are finding it more and more difficult to handle these expenses. Fortunately, banks and finance companies have developed products to help parents – tuition payment plans and private k-12 education loans.

Payment plans allow parents to spread out tuition payments over a 9 -12 month period for a minimum cost – usually around $50. At a school with an annual tuition of $10,000, this allows a parent to pay $1,000 a month. But often times, even that burden is too high. So many turn to loans.

An education loan for private K-12 schools allows parents to spread out payments over a much longer period, usually 10 – 20 years. This longer repayment period makes tuition payments much more affordable. With this affordability, however, come interest charges (with some loan programs charging much higher interest rates than others).

Many banks and finance companies now offer k-12 loan options. This benefits many families who were previously forced to take out home equity loans, giving up valuable equity in their homes because of rising k-12 tuition costs.

Each lender’s product offers parents very different features and benefits, so it’s important to shop around. Many of these products are credit-based, so an interested parent and/or sponsor will have to undergo a credit test. Of course, some credit tests are more difficult than others, so a rejection by one company does not necessarily mean a rejection by every company.

Besides credit test differences, these products offer different repayment terms, with some offering a 10 year repayment term, others offering a 15 year term, and still others offering a 20 year term.

While all of the above differences are important, perhaps the most important feature of a loan is cost. The different products in the k-12 loan marketplace offer very different interest rates and fee combinations. The bottom line of all these loans, the Annual Percentage Rate, or APR, is the best measure of the loan’s cost. It is used to compare the costs of mortgages, credit cards, and auto loans, and should also be used to compare k-12 loans.

At the end of the day, you should go through the following steps to determine your financing.

Step 1: Determine the real cost of the private school you choose

Step 2: Determine if you have enough financial resources to handle the real cost

Step 3: Find out about payment plan options at your school and determine if you can afford the high monthly payments associated with a payment plan

Step 4: Shop around for a private k-12 loan option – compare costs, as lower APR’s can save you hundreds of dollars over the life of the loan


  • my son life is on the line, he need to get out of New haven ct,and make something of his life he is a bright young man but the city offered nothing for him but jail dead, or in a i really need someone help. conswella paige, December 15, 2008 12:20 PM
  • Conswella, While we don't have any direct advice for you situation, we know of a few places you might start. Call Yale's education school- Teacher Preparation and Education Studies; they might have some community outreach/services for locals. Additionally, sometimes university psychology departments administer school admission tests. ABC- A Better Chance and Prep for Prep have good school resources. They're located in New York City; they might know of resources in your area. You might also check with the local boys and girls clubs as they often know of local educational services. Best wishes, B. Bisher, December 15, 2008 2:00 PM
  • my son will be at fishburne military school in the post grad program for school year of wife and i feel that this would be academicly great for him as whale giving him the chance to grow as a young man.the steets of chicago are pretty tuff rite this is a chance for him to see what life is out side of chicago.tuition is 18.500 for the school year for him and were looking for a loan to help pay that. perry weeks, August 23, 2009 8:12 PM
  • I am searching for a loan to continue paying tuition for my children who are in elementary and Junio high school. My oldest daughter is a 4.0 student and she has always attend the same school it is a great school. I need to cover her last year she is in 8th grade now. Please, inform me is i could obtain a loan. She has not been able to take her midterm exams due to my economy which is low at this point. it is very urgent for me to know. thank you, GOD BLESS ana melendez, January 14, 2010 12:47 AM
  • one of my two sons was able to get a loan for a prep school last year if he had a co-signrer (Sallie Mae) but that is not an option this year for my second there any places that I can apply and get a loan for him with a co-signer? Any hrelp would be greatly appreciated. Brooks Billingham, March 15, 2010 5:03 PM
  • I am searching for a loan to pay my daughters' school fee who is currently attend a catholic school in southern California. I need to pay her registration fee and school fee for the year, is there any places I can apply and receive a loan? Thank you very much and God Bless faynette adderley, July 19, 2011 11:24 PM

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