Help choosing private student loan lender? Any experiences with these companies?
November 5, 2010 by admin
Filed under Student loans
I’m trying to choose a lender for my private loan. Could you tell me your experience with any of the following companies?
Wells Fargo Collegiate Loan
Sallie Mae Smart Option
Discover Private Student loans
Chase Private Student loans
Citibank Private Student loans
PLEASE ONLY ANSWER if you’ve worked with these companies when getting your private loans, whether you’re currently repaying or just got a loan.
Unfortunately, “Happy’s” answer is not correct. Private student loans are not similar to federal student loans, and should not be considered until you have exhausted all of your federal financial aid options. Private student loans will carry higher interest rates, and will not offer you as good of repayment options as federal student loans will. Do not look into any of these lender until you have filed a FAFSA. After you have done that, then it is really about what private loan offers you the best deal, questions you will want to find out from each lender:
What is the lowest interest rate and fee combination that you offer? How can I get that rate? Is the rate only for a limited period (an introductory rate), or for the duration of the loan?
If the interest rate you are offering is variable, is there a limit on how high the rate can go? How often is the interest rate adjusted, and how is it determined?
What rate can I get on a fixed-rate loan?
How long will I be repaying the loan? Is there any penalty for paying off the loan early?
When do I have to start making payments?
How long can I defer payments while I’m in school? What if I go to graduate school after my bachelor’s degree? How often do you capitalize the interest? If I do not make payments while in school, how much will I owe when I do start making payments?
Will I lose my on-time-payment discount with just one late payment or if I ask for a change in the payment schedule? What proportion of your borrowers actually get the discounts you offer?
Are your discounts guaranteed, or are they subject to change later?
If I have difficulty making payments (“economic hardship”), do you allow me to defer or reduce my payments temporarily? Under what circumstances, and for how long?
How much can I borrow without reducing my eligibility for federal, state, or institutional aid?