How to Borrow Private Student Loans Smarter
When you’ve maxed out scholarships, institutional grants, and federal student aid, private student loans are usually the next stop when looking for money for college. If that sounds scary, know that it doesn’t have to be.
No matter which stage of higher education you’re in, there are multiple private student loan programs and options, so the key is learning about those options and choosing what fits best with your needs and goals. And – as with any service provider you choose – the lender you select has a big impact on how successful and simple your experience is. You’ll also want to figure out how much you can safely borrow in order to achieve your educational and financial goals.
Understand Private Student Loan Options
Don’t wait to apply for student loans, and then take the first offer that comes your way. There are several options you’ll want to consider, and the loan you choose can have long-ranging impact. Here are some of the most important things to consider when choosing a private student loan.
Shop around for interest rates based on your situation. Advertised loan rates may not apply to you, and origination fees may not be widely communicated. You should make sure to ask your lender about any fees associated with the loan or loan application.
Rates are often better with a qualified cosigner (the vast majority of in-school loans have a cosigner) if you don’t have established credit. If applying with a cosigner, see what rates you and your cosigner may qualify for.
Choose a fixed or variable interest rate based on your ability to adjust to changes in your payment amount over time.
Look for borrower benefits like these:
A grace period after you finish your degree (Nelnet Bank offers a six-month grace period during which you don’t have to make payments – but you can make payments if you wish)
An interest rate reduction for setting up automatic payments (Nelnet Bank offers a .25% interest rate reduction if signed up with auto debit)
For eligible borrowers, the release of your cosigner after a certain number of consecutive, on-time monthly payments; Nelnet Bank releases cosigners after 24 months of consecutive, on-time payments.
Look for Flexible Repayment Options
Flexible repayment options can save you money over the life of your student loan. Nelnet Bank offers repayment options like these:
