Finding The Right Lender For Your Student Loan

Finding The Right Lender For Your Student Loan



Finding the​ Right Lender For Your Student Loan
About half of​ all students nationwide will take out a​ student loan during their college years .​
That leaves a​ lot of​ debt floating around out there,​ but it’s for a​ good cause .​
Student loans have become a​ fact of​ life for many of​ us,​ especially since education is​ getting harder to​ afford .​
So,​ if​ you​ decide that a​ student loan is​ what you​ need to​ get through school,​ take a​ moment to​ consider what you​ want in​ a​ lender.
The right lender can make your loan repayment a​ fairly painless process .​
a​ bad one can mean one big financial headache .​
All federal student loans must offer the​ same interest rates and fees .​
Some lenders offer extra incentives to​ repay your loans in​ a​ timely manner,​ such as​ prompt payment discounts .​
These can be earned by setting up automatic monthly payments through your bank account,​ or​ by making your successive monthly payments on​ time – typically for 12 to​ 48 months .​
Students who go the​ auto-debit route have a​ higher repayment success rate,​ but should always make sure they have enough money in​ their account to​ cover the​ bank draft .​
One missed or​ late payment is​ enough to​ disqualify students from these discounts.
All student loans are not created equal .​
Federal Stafford loans are some of​ the​ cheapest you​ can find,​ and the​ repayment terms are flexible as​ well .​
There are limits to​ how much you​ can borrow,​ though .​
If you​ need more money,​ you​ can ask your family to​ consider a​ PLUS loan .​
They,​ too,​ are relatively inexpensive,​ but parents are held responsible for repayment if​ the​ student defaults,​ just as​ they would be if​ they co-signed for a​ private education loan .​
Private loans are among the​ most expensive student loans available .​
They tend to​ have higher interest rates,​ but students can borrow more money with them .​
(That’s not always a​ good thing!) Finally,​ credit card debt should be an​ option of​ last resort .​
It’s expensive,​ especially if​ you​ carry a​ monthly balance,​ and it​ can haunt your credit report for a​ long time .​
Go for a​ Stafford loan first .​
If you​ truly need to​ more,​ then carefully check out the​ other options before committing yourself.
Customer service is​ another area where some lenders clearly excel over others .​
The federal government can make lenders adhere to​ interest rate guidelines,​ but it​ can’t make them pleasant to​ deal with .​
To make sure you​ choose a​ good one,​ pay a​ visit to​ your school’s financial aid office .​
They usually have the​ scoop on​ problem lenders .​
While you’re there,​ ask them if​ they have a​ preferred lender list .​
This can help narrow down your choices .​
Ask questions .​
Does the​ lender have online repayment options? Do they combine payments of​ Federal and private loans? is​ their customer service available by phone,​ toll-free and 24 hours? These are things to​ consider before selecting a​ lender.
Also,​ be aware that lenders can sell your loan to​ third parties once the​ loan hits repayment status .​
These third parties will then service your loan,​ which means you​ won’t be dealing with the​ bank or​ group that issued the​ loan .​
This can be good or​ bad .​
If you’d rather deal with the​ same group throughout your repayment process,​ look around for lenders that offer life-of-the-loan servicing.
Shopping around for a​ student loan is​ a​ lot like shopping for a​ car or​ a​ credit card .​
The terms and the​ service make all the​ difference .​
You don’t want to​ end up owing much more than you​ thought you​ would,​ or​ having to​ deal with discourteous loan servicers .​
Look for lenders who have a​ good reputation for communicating well,​ taking care of​ their borrowers,​ and making the​ repayment process as​ convenient as​ possible.




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