Save Money with the Best Student Loans

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How to Save Money on Your Student Loans

Finding Better Rates and Getting Approved

When you’re looking for the most competitive student loans, it helps to know as much as possible about lenders and how they decide things like interest rates. Understanding how loans work from the lender’s perspective makes it much easier to get approved for a great loan.

Unfortunately, students often misunderstand the basic facts of how loans work. There are a couple basic facts to keep in mind when you’re looking for the best student loans possible.

What Lenders Will Look For

Many students are unaware of the role that their credit histories play in student loan interest rates. As with any other type of loan, credit is important, and students with undeveloped credit histories may have a tougher time finding loans than students with good credit.

The problem, of course, is that many students are too young to have established credit histories. The majority of college students are in their late teens or early twenties. Lenders will allow a cosigner, so if you don’t have credit, you may be able to borrow some of a parent or other relative’s credit to get approved for your loan.

Graduating with Less Debt

Credit is also based on the size of the loan and the financial strength of the lender. To graduate with less debt, you should try to limit the size of your loan. The best ways to do this involve limiting the time that you’re in college, thinking about taking undergraduate courses at a community college or state-run college to decrease your overall tuition, and being sure to take things like income and savings into account when you’re setting an amount for your loan.

While you obviously don’t have much control over the lender’s financial strength, you can compare the interest rates of a few lenders to make sure that you’re getting a good deal. Comparing rates is an important step, as lenders’ interest rates vary greatly. You could end up saving thousands of dollars simply by getting and comparing a few quotes.

Finally, consider your lender’s payment terms. Don’t assume that your payments will always start when you graduate. Many loans require monthly payments after a set period of time, but their terms aren’t necessarily tied to the date of your graduation. You may end up making monthly payments while you’re still in school, so know exactly when your payments will start and how much they’ll be. Make sure that you have a plan to pay. Missing a few payments can be disastrous, but if you research your options before getting a loan, you should be able to find a flexible payment plan that meets your needs.

Steps to Follow

Always read through student loan terms and conditions. You’ll need to understand things like interest rates and repayment terms. Reading through a contract is one of the best ways to learn and an essential step when choosing a lender.
Talk to your potential lenders. Ask as many questions as you can about loans and interest rates. This will give you a good idea of how dependable and knowledgeable the lender’s customer service department is, which can be important when you’re trying to find the best student loans.

A Few More Tips

There are a number of ways to decrease the size of your student loan. Make sure to consider things like community college courses, AP placement tests and other educational options. Cutting out a few semesters’ worth of tuition can drastically decrease your debt and make it easier to find a suitable loan.
If you can’t get approved for a loan, try to find a cosigner. Parents and relatives are a good place to start. A cosigner effectively backs your loan with their credit, which can make it easier to find an appropriate loan at a good rate.