It’s hard getting ready for school. Organizing classes, schedules, books, housing, and roommate choices -- none of it is easy. Add in looking for student loans, and it’s enough to overwhelm you. Who has time to think about about interest rates? Still, if you’re going to take out a student loan, pay attention now.
Don’t end up among the millions who overpay on their student loan checks every month. Plus, we’ll show you what you can do if you’ve maxed out your federal student loans.
Federal Vs. Private Loans
In many cases, federal student loans offer the best interest rates. This is especially true if you can demonstrate financial need. For example, Direct Subsidized undergraduate loans offer an interest rate of 4.45%. Plus, the government pays the interest on subsidized loans while you are in school on at least a half-time basis. However, there are exceptions where federal loans might not be the best option. For example, the government offers Direct PLUS Loans to graduate and professional students, and parents of undergraduate students. Some private lenders may offer lower rates than what PLUS loans offer.
Another downside of federal student loans is that there is a borrowing limit. Congress determines the type of government loan you are eligible for and any amount limits. So if you’ve already reached your federal loan ceiling, you’ll have to look elsewhere for funds.
Old School Ways
In the old days, borrowers basically had to go door-to-door to ask private lenders for loans. This was a tedious process since you had to contact each one individually. Plus, every lender required you to fill out a separate application. Then you had to wait at least 2-3 days for a reply.
New School Ways
Today, the process of finding the lowest student loan interest rate has never been easier. An online lender marketplace lets you see actual rates from multiple lenders in minutes. It all starts by answering a few questions about yourself and your borrowing needs. After you submit your information, you’ll instantly see rates and terms from any lenders you’re prequalified with..
Majoring In Advantages
Besides being super convenient, a lender marketplace offers several other benefits:
- It’s free. No extra charge for using the platform.
- See actual rates from lenders you prequalify with
- Almost any degree can be financed.
- Choose from flexible repayment plans.
- You don’t share your information with lenders unless you see an option you like
- Checking rates does not affect your credit score
Prequalification Is Key
One thing to watch out for is to make sure you use an authentic multi-lender marketplace. There are a lot of “rate comparison” sites out there that aren’t true marketplaces. The difference? A true lender marketplaces will have real integrations with lenders. Meanwhile, rate comparison sites typically just provide a range of rates that have nothing to do with your reality.
The lender marketplace’s integrations with lenders and credit bureaus means the you’re prequalified for the rates you see.. Now you have access to accurate data in order to choose the lender that best fits your requirements.
When getting ready for school, you have plenty of things to stress out about. Don’t let securing a student loan be one of them. Tap into an online lender marketplace and get reliable information quickly. Remember, if you take the time to get the best rate now, you’ll have a lot less stress - and lower payments - in the future.