How You Can Get Yourself A Good Student Loan
Not that the word ‘good’ can be used to describe any sort of loan, but not all loans need to be bad. A real bad student loan would comprise of high interest rates that you pay, fewer repayment options or little to no help if you were falling behind on your repayments. It is, therefore, prudent that you take your time to study and assess the fine print on your student loan agreement, so you can avoid the stress and hassle, which comes with a bad loan.
Before you evaluate any loan on offer, try to apply for any free money that you may be eligible for. This could comprise of grants, assistantships and scholarships. Your institute may not necessarily offer them to you, but other private organizations do help with student aid. Only when you have exhausted all options, should you think of a loan for your education. You can make use of these 3 borrowing tips to steer clear of a bad loan;
Consider a federal loan first
If you must borrow, you should choose a federal loan over a private one. We advise you to do so because the federal government offers more borrower friendly terms such as income-dependent repayment options, which don’t even need established credit. If you need more money over and above the federal loan, then you can compare the various kinds of loans on offer from private vendors. Some Universities even offer counseling to students who are seeking loans from trustworthy lenders.
Local banks also offer more benefits than their larger counterparts, particularly in terms of customer service. What would be easier for a student? Walking into the bank and speaking directly to a representative or calling some 1-800 number and pushing a plethora of buttons just to speak to a human being! When deciding on getting a loan, you should pick the best option for yourself in terms of repayment options, longer grace period, option to release a co-signer and the option of holding off repayment (temporarily).
Check your forbearance terms
When you repay your loan, you might encounter difficulties meeting the monthly payments and one way you can avoid missed payments is by employing forbearance. It actually allows you to pause and delay payments on your loans for a specified amount of time, which is usually short, but the interest continues to accrue. It is typically offered in 3-month increments, not crossing 12 months, but some lenders do offer 24 months for forbearance too. When reading your loan documents, if you notice that there is no forbearance option, it may be the case that your bank or financial institutions grants them on a case-to-case-basis. In this case, you may clarify with your bank’s representative from the get go. Also, it’s safer to opt for a loan from banks, which have a transparent policy in place.
Go for a fixed interest rate loan, be on a lookout for any hidden costs
Lenders, particularly private ones, offer two kinds of interest rates when you borrow from them: fixed or variable. Trust us when we say go with the fixed rate option, which would stay the same until you repay your entire loan. A variable rate might be lower than the fixed rate, at initial glance, but they can increase over some time, as they are linked to the financial market index, as the index changes, so does the variable interest rate.
Apart from the interest rates, you should also be on the lookout for hidden costs, like for instance, fees. The perfect candidate for a ‘bad loan’ would be one which advertises a low interest rate, but more than makes up for their loss of profits with other fees. Another thing to be vary of are penalties such as a prepayment penalty and late repayment fees.
Why a low interest rate should matter to you, and how do you get it?
Finding the lowest fixed interest rate that you can be eligible for is very important for your sum total of savings, even a change in the smallest degree helps, say 1%. Over the course of your education, you might end up taking on several loans and that is why the lowest interest rate matters over time.
That being said, the lowest rates are usually offered to those borrowers who have a rock solid credit score, or alternatively, it is given to someone whose co-signer has a high credit score. Lenders also offer discounted interest rates for existing account holders, on time and auto-payments. Instead of playing the guessing game, ask your bank how you can get the best rate possible.
Getting a good education is a privilege that not everyone can enjoy, but getting a good interest rate on your student loan is in your hands, you only need to be proactive about getting the best offer.
More in Debt
How Bloggers Book Cheap First Class Plane Tickets
Frequent travelers usually make use of their airline miles when booking tickets. However, miles can run out or can be insufficient...December 20, 2018
Americans Have Taken a Record-Breaking number of Personal Loans in 2018
Private Debt has been burgeoning in 2018 and while some say that credit is spinning out of control, there are different...December 19, 2018
Read and Weep: Some Expensive Baubles only Celebs can Afford
Most mortals feel guilty after spending money on some items we do not need. But, others fail to show any remorse...December 18, 2018
Everything You Need to Know about Title III Crowdfunding and the JOBS Act
The Jumpstart Our Business Startups (JOBS) Act was passed by Congress in April, 2012 bringing joy to the startup world, enabling them to...December 17, 2018
PR Can Ensure You Crowdfunding Campaign Success
Strategizing for your Crowdfunding & PR are essential components as PR works best inside the crowdfunding system. Entrepreneurs make the mistake...December 14, 2018
Let These Thrifty Celebrities Teach You How to Save
Let’s face it… those to have it, flaunt it. And when you have money like a lot of celebrities we know...December 13, 2018
Not Your Average Account: These Checking Accounts for the Wealthy offer Insane Benefits
Checking accounts are certainly not a luxury but a bare requisite for most people. There are definite variations among these accounts...December 12, 2018
How The Wealthy Folks’ Banking Habits Differ From Ours
Money management is an art and the key to wealth is successful money management. One key feature is that the rich...December 11, 2018
Anonymous Crypto Crowdfunding is Helping Loads of Indecent Assault Victims
An emerging trend is the use of cryptocurrency for assisting women victims of indecent harassment/assault, to strive for financial independence while...December 10, 2018