Consider taking student loans offered by credit unions
This is a very important consideration when looking for the best private student loans. Credit unions offer the better interest rates compared to most lending institutions offering loans for students. One of the main reasons for this is because credit unions specialize in credit business only thus they have a better understanding of the market.
Also, credit unions are usually more liquid compared to institutions such as banks thus they can be able to offer the lowest possible rates in all kinds of market conditions. Ironically, many students prefer to borrow from well-known lenders who may not necessarily offer the best rates. To avoid paying a lot of money on interest, it is always advisable to consider credit unions first before any other funding institutions.
Loans from schools with their own credit unions
This is also an important consideration. You shouldn’t settle for private student loans from any credit union. You should always consider schools which have their own credit unions. This is because these kinds of credit unions offer even better interest rates.
You must therefore check if your school has a credit union before deciding to take a loan from any other credit union/s. If your school doesn’t have a credit union, you should consider only those unions that are affiliated with your school to get the best student loan deal i.e. the most flexible repayment terms, lowest interest rates e.t.c.
Apply for multiple loans
This is also an important tip to consider when applying for a private student loan. It is important to note that you are not entitled to the interest rate you want or apply for. In most cases, applicants get higher rates than the ones they prefer. In summary, you can’t know what rate you qualify for unless you apply.
There are usually very many variables used to determine rates for funding offered to students thus it is impossible to determine the exact rate you will qualify for. It is therefore advisable to apply for multiple loans for comparison purposes because this is the only sure way of getting the best rates. You should also note that qualifying for a student loan you have applied for isn’t automatic thus applying for multiple loans increases your chances of qualifying.
Do not assume you will get the best rate
Even after considering the above tips i.e. applying for funding as a student in credit unions, applying for multiple loans e.t.c., you shouldn’t assume that you will get the best rate. Private student loan lenders always advertise with teaser rates that look more attractive compared to the rates offered on other types of student funding i.e. federal college loans.
Before settling for a certain loan being offered by independent lenders such as; Wells Fargo, Chase, SunTrust among other lending institutions, you must ensure that you capture the real best rate. Although such institutions may be offering very attractive rates, it doesn’t necessarily mean that they are offering the best rates. You must do your research further.
Research using appropriate tools
It is important to note that there are many loan search engines available online. Consider researching for the best loan deals for students using such tools. Examples of good loan search engines include:
Make all necessary inquiries before committing
Finding out the interest rate of a particular student loan is not enough information to make an informed decision. You must make all necessary inquiries on interest rates among other things. For instance, you need to know if the interest is variable or fixed.
You also need to know if there is an interest rate cap. Other things you need to find out include; additional fees, grace period, borrowing limits, penalties, loan deferment options, loan consolidation options e.t.c. The above information is very important in terms of determining the best deals available.
Don’t borrow too much
After you have found the best deal, the last step is borrowing. You must borrow responsibly to avoid financial problems in the future. College is one of the best investments you can make in life. You however need to borrow responsibly to avoid student loan debt burden after graduating which is very common nowadays.