What do I need to ask lenders when borrowing student loan?
I was awarded stafford loan but its not enough. I’m in the process of looking for a private student loan and don’t know how to deal with it. What do I ask lenders, what is a good interest rate? How much should I borrow? How do I get the money? Any suggestions, tips would be appreciated. Thanks.
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This website has information about student loans such as current rates and comparision charts and anything else you might want to know.
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Borrow the minimum and get a job. When it comes time to pay it back, you’ll be thankful that you did. Compare the interest rate to your stafford loans. Check our DirectLoans, they’re government-backed. You can check with your school for a list of preferred lenders, but that doesn’t necessarily mean they’re the cheapest or the best. They should send the money directly to your school, who will ensure your bill is paid, then give the money to you. Make sure you save copies of all promissory notes you sign, copies of checks if possible, etc. Keep track of how many disbursments you have (every check is a disbursement). Down the road, if you have to request a deferment or forebearance, don’t assume you’ll get it just because you asked. Keep documentation of your approval. Also, DON’T default on a student loan! Read your promissory note. If you default, the balance in full is due, and you can lose your tax refund, have your wages garnished, etc.
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5 years ago
The most important thing to consider is the financial strength (and willingness) of your cosigner. Private loans ALWAYS require a cosigner with awesome credit and a high income… and a low debt-to-income ratio. Their credit will determine the rates you get more than anything… Choosing a school that is TWICE what you can afford is really a big decision. You need to be aware that you are going to be dependent upon your cosigner to borrow for you all FOUR years of your college career. Be aware that if they are a little nervous about borrowing for you your FIRST year, it is highly unlikely they will cosign for you a second, third, or fourth year. If your cosigner is a parent, you need to have a heart-to-heart with them about what they are and are not willing to do… seen too many ppl get very emotional about this and mom and dad refusing to sign for things like not agreeing with the kids choice of major, boyfriend, living arrangements, lifestyle… etc. YOu don’t want them to refuse just because you have blue hair. You also need to know a bit about their debt to income ratio, because you sure don’t want to have one year left to graduate and the lender REFUSES to give you your last year of loans because your cosigners debt-to-income ratio got too high (they decided they wanted to buy another house or another car or something, added on to the 3 years of student loans)… it happens! Be sure your EVIL private student loan does not include a prepayment penalties. You WANT to be able to pay if off early if you can. Pay close attention to the TERMS of the loan (how long are you financing the loan for?). Interest rates are not REALLY that incredibly important when you consider the differences in length. Example: a 10 year loan is much better at 10% interest than a 25 year loan at 8% because after 25 years you pay MUCH more in interest than the 10 year loan. Also, be aware private loans will require your cosigner to pay your loan if you were to die or become disabled. Also, many of them are now requiring you to start making interest payments while you are in school… a great way to save money, just don’t be surprised by this and know if you can afford it. Good luck.. you are making a mistake, but its yours to make.
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6% is good… not likely, but good. Ask them if the interest is deferred until graduation. Ask them if there is also a deferrment in payment for at least 6 months after graduation. Borrow only as much as needed to cover tuition, then get a part time job for other expenses. Don’t go overboard. Also, look into Scholarships and Grants…
www.fafsa.ed.gov should help out too…
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the interest rate would be the most important question for me. also when do you begin to pay. what will the amount of monthly payments be?
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Just apply and answer their questions. Pretty simple process.
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Go to your financial aid office and ask who they recommend. What fees!!! They can get you.
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http://www.finaid.org
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always say please and thankyou. little words get far lol.
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