How to Choose the Right Student Loan
Looking for an affordable student loan? You must explore your options and shop around for the best offers before you sign up. It is essential to borrow only as much as is necessary. Find out about whether you will be able to get a job as soon as you graduate and will be able to earn enough to afford the monthly loan payments.
You can get a job to support yourself while you are in college. However, if you spend too much time working on a job, you could end up with poor grades. Find out about all the grants and scholarships for which you are eligible. Look for safe federal loans with low interest rates before you consider more expensive, riskier private student loans. Get free, no-obligation quotes from the top lenders now.
Federal student loans
Fill out the Free Application for Federal Student Aid (FAFSA) to find out about the federal aid programs for which you are eligible. Try to get as much as you can in grants and scholarships that you will not have to repay. After that you need to find out about loans guaranteed by the Federal Government, which have the lowest interest rates.
Perkins Loans and Subsidized Stafford Loans are the most affordable and safest federal loans. After you have found out about your eligibility for these loans, enquire about Unsubsidized Stafford Loans. PLUS Loans have higher interest rates and are meant for graduate students and parents.Student loans federal offer protections for borrowers that are not available with private loans.
Private student loans
Consider these loans after you have exhausted your federal loan options. Private loans are costlier and riskier than federal loans. The interest may appear to be very low initially, but it can rise sharply in the future, putting a big burden on your finances.
Go through the fine print carefully and watch out for hidden costs. Seek advice from a few independent advisors before you make up your mind. Remember, some financial advisors receive commissions for the loans they originate, so they may not always offer unbiased advice.
Shop around before you sign up
You need to shop around even if your school has a preferred lender. Negotiate with lenders on the basis of offers received from others. Consider all the costs associated with the loan throughout the entire period. An online student loan calculator will help you to assess your options. You will find one on the websites of most lenders.
When you do the math, you may find that some offers that appear to be cheap are actually much more expensive in the long term. Several banks and other lenders offer student federal loans, and some of them offer discounts on the interest rate and fees. Enquire about these discounts and check to see if they will continue to apply if the loan is sold to another company.
Make sure that you understand the terms and conditions before you sign up. Ask the lender for clarifications if you have any doubts. Browse through online reviews to check the reputation of the lenders. Get free, no-obligation quotes from the leading lenders now.