Getting To Know The Student Loan Companies
When you begin your search for a student loan, you will need to locate a reliable lender that not only agrees to lend you the money you need for college, but offers you the most attractive terms and the best interest rates.
Many students, in their rush to secure a loan, don't spend enough time investigating all of their borrowing options. If you rush into any loan agreement, you may end up spending more money in the long run than if you were to take it slow and more clearly understand all of your options.
What Are Student Loan Companies?
Student loan companies are private lending institutions making student loans, and can vary greatly one from another. Some loan companies are genuinely interested in helping students find the the best loan possible to make their college careers possible. Others may only be in it for the money. Research is the key to finding the lender that also has your best interests in mind.
Private lenders making student loans can be banks, credit unions or savings and loans. What follows is a partial list of prominent lenders offering student loans. Follow the links for more information regarding each lender and their loan programs:
- Wachovia - Education Loan
- Bank of America - Campus One
- Wells Fargo - Collegiate Loan
- Chase and Bank One - Education One
- Citibank - CitiAssist
- Key Bank - Key Alternative Loans
- PNC Bank - Continuing Education Loans
- GMAC Bank - Education Loans
These are only a few of the many lending organizations that offer student loans. There are many companies competing for your business, and while competition means greater choice it can also complicate your decision making process. Remember, go slow – be thorough – and sign nothing until you are satisfied and comfortable with the agreement.
Benefits of Borrowing From a Student Loan Company
A student loan company will will certainly help you pay for college. However, borrowing from just any company can lead to pitfalls. High interest rates and difficult lending terms can have you repaying that loan for a very long time. If your loan is subject to variable interest rates, you may very well find yourself unable to keep up with the payments entirely. However, if you ask the right questions and take the time to shop around, a private loan from a student loan company can make your college tuition costs affordable.
Depending on where you decide to get your loan, you may have to begin the repayment process while you are still in school. This is common with many private lender student loans. Some lending institutions will allow you to defer payment on the principle of your loan, while still making payments against the interest while you are attending college. However, even if you find a lender who will let you defer payment on the whole of your loan until after you graduate, you will still be raking up interest on that loan while you are in school.
One of the seldom mentioned benefits of securing a private lender student loan is that it is a good way to begin building up a good credit history. Most students fresh out of high school will have little or no credit, and the ability to start building a good credit history at so young an age is extremely beneficial. By the time you graduate from college you should be well on your way to building up a solid credit score.
How to Choose a Lender
The process of a selecting a lender or student loan company for your private loans is all a matter of comparison. You need to shop around and compare:
- Interest rates
- Repayment plans
- The terms of the loan
- Quality of customers service
- The ability to pay online
These are the main aspects of any loan you should consider before putting pen to paper. If any area is unsatisfactory to you, keep looking. There is bound to be a lender out there that meets your needs.
Important Questions To Ask Student Loan Companies
To get down to the heart of the issue, here are a few questions you can ask student loan companies to better evaluate their ability to handle your debt:
- How are your loans guaranteed?
- Do you offer any fee reductions?
- What are the benefits of borrowing with your company?
- What is your customer service like?
- How long have you provided student loans?
- How do you handle consolidation?
- What is your origination fee?
- May I see a copy of your loan terms and benefits?
There are, of course, many questions you can ask a student loan company, but these are the basics—beyond standard questions about interest rate and payment terms. The key to negotiating a student loan is to never be afraid to speak-up.
Taking out a loan is serious business and you have a right to know from whom you will be borrowing money. If a company is reluctant to answer your questions, they may very well not be worth your time or your business. There are plenty of student loan companies out there that will be willing and eager to loan you the money you need for college. Do your research and only agree to taking on a loan from an institution with whom you feel comfortable doing business.