Student loans: 7 smart tactics for choosing the right one
Many of you have been telling us that choosing the right student loan can be challenging. You need a resource that cuts through the terminology and the barrage of messages you receive from lenders and marketers. This is where SimpleTuition can help.
Do you want to understand student loan terminology better? Refer to our glossary for a list of definitions and why these terms matter.
Student Loan Selection Tactics:
- Start by filling in the FAFSA. Without it, you won't have access to federal student loans - many of which are not based on need (or your income). Don’t assume you won’t qualify for federal aid.
- Dig deep for alternatives to private loans - It will save you money in the long run to use private loans as the last source of funding. Remember to take into account your savings, any bonds that may be collecting dust in a safe somewhere, local and national scholarships, government loans, part-time work, or work study as ways to cover the cost of college.
- Know your loan options - It's important to investigate many different private loans before you apply in order to make sure you are getting the ideal arrangement for your needs. We appreciate that this can be a time consuming process, so we have included information on dozens of different lenders on SimpleTuition.com.
- Look beyond the annual percentage rate (APR) - It is important, of course, but there are many other factors to consider, such as the total cost of the loan, deferment options, first payment due date. All of these criteria (together with APR and many more) are available in the listings at SimpleTuition.
- Confirm the interest rate for which you qualify - It's important to confirm interest rates with the lender you are researching. The actual interest rate and fee on your loan will be determined by the credit profile of the borrower and co-signer. Make sure to consider the rate offered to you before you commit.
- Students, please find a credit-worthy co-signer - Many of you have been telling us that you did not receive a loan because you did not have a co-signer. This is usually a hard and fast requirement, and you will likely be rejected without one, especially if you are a student with no (or weak) credit. Increasingly, this goes for graduate students, too.
- Pay attention to how the money is disbursed - Be sure to confirm whether you will receive the funds directly, or if they will go to the school. This is important if the student is planning on using loan money for non-tuition expenses such as transportation, rent, food, computer equipment, and other factors that go into the cost of attending college. It may take longer to receive funds for these education-related expenses if you have to wait for reimbursement from the school. (Though note that rates might be better if the money is disbursed to the school).
Notes: Always remember to fully exhaust your government student loan options first, before you pursue private student loans. SimpleTuition highly recommends that you secure a credit-worthy co-signer for your private loan application.
Do you want to understand student loan terminology better? Refer to our glossary for a list of definitions and why these terms matter.
Comments