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Understanding Private Student Loans

Guide to Understanding Student Loans

Finding Help With Your Student Loans

Private student loans can seem overwhelming, especially for younger students. For many students, this will be the first loan you ever take out – and it may well impact your credit years from now, even after you graduate.  Once you have researched scholarships, government grants and loans, private loans can make it easy to pay the left-over costs of college. Many private loan lenders offer affordable interest rates and payment options.

If you don’t understand student loans or if you don’t know where to start, you can get advice from parents, teachers and guidance counselors. Parents might be able to help by explaining the basics of financial loans and might be able to cosign on your loan, which will improve your chances of approval. Guidance counselors and teachers can help you to keep your debt under control by looking into AP courses, local general education courses and other resources that can cut the costs of tuition. They can also give you advice for picking out a lender.


Getting Student Loan Advice Online or Directly From Lenders

There are also dozens of great resources on the Internet that can help you to learn about private student loans. Lenders’ websites are often the best place to start, as they’ll have glossaries, loan calculators and other tools that can help you evaluate different loans.

If you have specific questions about private student loans, you can also call your lender’s customer service department for answers. Your lender will often be happy to offer advice about ways to get your loan payments down, as this increases the chance that the loan will be paid off. They want to help you fulfill the terms of the loan agreement and might be able to offer some valuable tips.

Action Steps

  1. Compare a few loans before you decide on a lender. This will help you to learn about private student loans. You’ll also keep your interest rates down, which should help you keep your payments under control.
  2. Always know what your loan will cost in total, when your payments will start and how much your payments will be. Don’t make any assumptions. Understanding your loan improves your chances of paying it quickly after you’ve graduated.  Some loan amounts may shift on a month- to-month basis, so it’s crucial to understand this ahead of time if you’re seeking a private student loan.
  3. Talk to your relatives and friends as you shop for a loan. Chances are, some of them have taken out loans before and may be able to offer you valuable advice. Relatives might also offer to cosign, which can make it easier to get approved for the loan of your choice.


Tips and Tricks

  • Choose a lender with a good customer service department. You’ll need to speak with them at some point during your loan, either to alter your loan agreement or to ask questions about things like payments. A good customer service department means less stress and hassle down the line.
  • Interest rates are important, but don’t rely on interest rates alone as you compare lenders. Make sure that all other aspects of your loan quotes are the same and find out whether your lenders offer special benefits or flexible payment policies. The cheapest lender isn’t always the best lender.
  • Start looking for a loan as early as possible. This will give you more time to learn and compare. Remember, most lenders offer a way to get a student loan quote online. Use this resource and take the time to research your options as soon as you can.

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