If you’ve already looked into scholarships, grants, and federal student loans to pay for your education and you’re still coming up short, then you might be considering private loans. There are a number of new offerings in the private student loan arena, and Raise – stylized as ^raise – is one of those newcomers to private student loans that is making an impression.
What Is Raise?
Raise’s loans are funded by Cognition Lending, the loan department of Cognition Financial Corporation. Raise used to be named First Marblehead Education Resources, Inc., started in early 2017, and is based out of Boston, Massachusetts.
Their main claim to fame is their application process. Not only can students apply for a loan online – even with a smartphone or tablet – but all loan paperwork and signatures can be done online as well. This means a convenient, tech-savvy process that promises to be simple and quicker than the traditional loan process; with the initial application potentially taking about 10 minutes to complete.
How Does Raise Work?
While some of the newer student loan companies have a lower threshold for approval in an effort to make their products appeal to a wider customer base, Raise uses a more standard approval criteria. This could be both good news and bad since they go by creditworthiness without taking grades into account.
This is great for hardworking students with good credit; even if their grades aren’t the best, they can still be approved for a loan. Straight-A students with less than perfect credit ratings, however, might find themselves unable to get a loan from Raise.
After the application is filled out and submitted, you’ll be asked to provide specific documentation to verify the data in the application. Once that’s finished, you will be sent notification of your approval or denial. If you’re approved, you can review the offer and accept or decline it online. If you accept the loan offer, you won’t be charged an origination fee.
All funds are disbursed directly to the school, and Raise will contact them for you to make sure that all payments are handled in a timely fashion.
More About Raise Private Student Loans?
Raise offers three different repayment options – 5, 7, and 10-year terms. The interest rates depend on creditworthiness, and currently run from 5.2 to 15.6 percent APR. In order to determine the APR for your particular loan, Raise will look at your credit history (and that of any cosigners), chosen loan term, and the amount you’re asking for, as well as any income and other application information.
If you take a shorter term, you’ll be able to pay off the loan faster, but you’ll also have higher payments. Trying to get a 10-year term means smaller payments, but you’ll pay more over the life of the loan. One thing you’ll want to note, however, is that Raise doesn’t allow you to defer all payments until after graduation. You can either start paying it off right away, or you can pay interest-only payments until you finish school.
Is Raise a Good Idea?
The online application and origination process is great for students who are looking to get things rolling, and even finished, quickly and completely online. Unfortunately, because Raise uses traditional lending criteria, a student will probably need a cosigner. The interest rates are also generally higher than other lenders; that can be a problem if you’re looking for a longer-term loan to give yourself more time. With the 10-year term, you’ll end up paying much more in interest.
Raise is also limited in its lending regions; depending on what state you reside in, you might not be eligible for a Raise loan. The company is constantly expanding its geographical reach, but right now loans are only available to students in Alabama, Arizona, Colorado, Florida, Georgia, Indiana, Maryland, Massachusetts, Michigan, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, South Carolina, and Tennessee. Your cosigner can be in any state but Wisconsin.
Since Raise doesn’t allow you to defer your payments while you’re in school, it could be difficult to keep up unless you have a cosigner willing to take on interest-only payments, at least until your graduate.
There are a lot of reasons to think twice before using Raise if you’re a student with no cosigner, poor credit, or lacking a steady income. For independent or nontraditional students, those who have a solid credit history built up, or have full-time income, and just need to bridge a short-term financial gap, Raise might be just what they're looking for.