Federal loans and scholarships are your best options when it comes to paying for college, but you can't always get enough of them to pay for tuition. That's when you need to turn to private student loans. However, it's not always easy to find the best one. Every lender has its own range of interest rates, its own perks, and its own list of requirements, and between all the banks, credit unions, and specialty lenders, you have dozens or even hundreds of choices. Fortunately, there are a few ways you can narrow down your options.
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Use a Loan Analyzer
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You don't have to look hard on the internet to find a tool that will break down loan terms, payments, and interest rates to give you a single number that shows just how much you'll pay in the end. A loan analyzer helps you compare loans with longer and shorter terms and variable interest rates, so you can see what the best deal really is. Don't ignore the monthly payments completely, though, because it won't matter if the loan sum's smaller if your child can't pay it off.
Offer to Cosign the Loan
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If you have a college-aged child, odds are pretty good that your credit score is better than theirs. Even if you don't have a perfect record of making payments, having no credit history isn't much better than having a bad history. If you cosign the loan and take responsibility for missed payments, you can access better loan terms than your child could otherwise get. Even if you plan on making all the payments yourself, adding your child as a cosigner will help build their credit history.
Check for Discounts
Many private lenders offer better terms on student loans than they do on normal loans, but that's not the only kind of discount you can find. Many banks offer better interest rates or discounts if you hold accounts with them, and smaller institutions, like credit unions, sometimes offer better student loans by partnering with local non-profit organizations. It might not be the best deal even with the better rate, but it's worth checking out.
Find an Online Aggregator
There are professionals who spend their time checking out all the terms offered by all the lenders out there for every kind of loan. They can't narrow the list down to a single perfect loan just for you because you'd need a personal financial agent for that. However, you can check out their findings by visiting one of several websites that publish them. A trusted finance website, like Credible, lists the best private student loan options around so you save time shopping for the top deal.
Student debt's a serious problem in America, and it's important to do what you can to minimize the burden of debt on your family. Part of that comes from carefully choosing the lenders you borrow from, so make sure you put in the research you need to find the best rates around.
Related Article: Save money by refinancing your student loans.