Choosing The Right Student Loan

Choosing The Right Student Loan

Choosing the​ Right Student Loan
When it​ comes to​ college,​ what types of​ student loans are right for you?
Borrowing for college is​ a​ long-term investment,​ one that will ultimately pay a​ lifetime of​ dividends .​
It is​ important,​ however,​ to​ educate yourself on​ the​ options available to​ you​ so that you​ do not end up down the​ road with more education expense than you​ planned for .​
Federal loans are the​ largest source of​ education loans .​
While these loans typically have borrowing limits,​ they offer the​ most attractive terms-lower interest rates,​ the​ possibility of​ having interest subsidized by the​ federal government while the​ borrower is​ in​ school,​ the​ ability to​ postpone making payments,​ longer repayment terms and less stringent credit requirements .​
Keep in​ mind,​ some lenders offer benefits in​ the​ form of​ fee or​ interest-rate reductions .​
Sallie Mae,​ for example,​ will pay the​ origination fee on​ a​ borrower's behalf for loans taken out next year .​
Zero origination fees provide students more money up front,​ so that students who borrow to​ pay for college have more money to​ cover education expenses,​ with each borrowed dollar directed toward education and not interest .​
On top of​ the​ zero origination fee benefit,​ borrowers may also be eligible for a​ variety of​ repayment-status borrower benefit programs,​ such as​ loan balance reductions for on-time payment.
Private loans are another funding option .​
Students and parents should always maximize federal loan offerings before investigating other forms of​ alternative funding .​
Private loans are designed to​ supplement federal loan programs and are available from schools,​ banks and education loan organizations .​
The terms of​ these loans vary based on​ the​ lender and the​ credit history of​ the​ borrower or​ co-borrower .​
Students and parents should first check with the​ financial aid office on​ campus for recommendations on​ student loan providers,​ says Martha Holler,​ spokesperson for Sallie Mae,​ the​ nation's No .​
1 paying-for-college company .​
Be sure to​ borrow wisely .​
Every dollar that you​ do not borrow is​ one that does not have to​ be repaid.

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