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Advantages of Comparing Student Loan Rates

Guide to Lower Student Loan Interest Rates

Keeping Student Loan Interest Rates Under Control

One of the most important steps in finding a student loan is collecting and comparing quotes from prospective lenders. Unfortunately, many students skip this step and end up overpaying. If you’re looking for low interest student loans, you’ll absolutely need to compare quotes.

Fortunately, it’s fairly easy to find quotes from student loan lenders. In most cases, you’ll simply have to visit lenders’ websites and fill out an application that ask for information like your name, social security number and a few details about the school you’re going to attend. Once you’ve collected a few quotes, you can simply compare their rates and payment terms to find a loan that makes sense for your financial situation.

The Benefits of Rate Comparison

There are a few benefits to comparing rates. The most obvious is that you’ll stand a better chance of finding low interest student loans. You’ll graduate with less debt and lower monthly payments. This can be enormously comforting in the months after graduation when you’re looking to start your career, as you won’t feel as pressured to take the first job that you’re offered.

Your loans may also be paid off more quickly, so you’ll spend less of your time in debt. This means more time to build up your savings. You may even be able to buy a car, house or make another major purchase more quickly once your student loan debt has been eliminated.

As you compare rates, you’ll read through quotes and learn about different payment plans, which may also help you select a policy with flexible payment strategy. For instance, while many student loans require payments before graduation, others may not need to be paid until you’re through with school. By comparing student loans and reading through their terms, you’ll find payment plans that are better suited to your needs.


Steps to Follow

  1. Know how much to ask for. Remember that the smaller the amount of your loan, the less you’ll have to pay back.  Try to cut down on the size of your student loans. Take AP placement courses, look at community colleges for your general education courses and dip into your savings account to cover living expenses. Don’t over-borrow or you may have trouble paying back your loan.
  2. Get quotes from reliable lenders. Try to stick with lenders who have a history of working with student loans. Comparing rates is fairly easy, but to make the process even easier, you can use a student loan calculator to see approximately how much you’ll need to borrow to cover the costs of attending school (beyond tuition and fees).
  3. Make sure that all aspects of your prospective loans are equal. You’ll have a tough time comparing rates if you don’t take the time to check that payment terms are similar and that loan lengths are roughly the same. If you get two wildly different quotes from two reputable lenders, there’s a good chance that there’s a major difference between them in terms of the benefits they offer or the flexibility of their payment plans.


A Few More Tips

  • It’s best to compare at least 3-5 quotes from different lenders. When you compare rates between lenders, you’ll quickly learn to spot low interest student loans.
  • Ask your lender questions. You should fully understand prospective loans before you agree to their terms. Ask your lender when your payments will start, how much they will be and anything else that could affect your ability to pay back your loan.

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