Private Student Loans – The Top Ten Questions to Ask
Students and parents who are considering getting private student loans to cover small gaps in college funding should shop around – this is by far the very best way to ensure that you’re getting the lowest interest rate as well as the best loan terms for you and your family.
We know that loans are sometimes a necessity; however, no student loan agreement should be entered into without careful consideration and research.
We’ve compiled a list of the top ten questions to ask when shopping for private student loans. Many of these questions will be answered in the loan terms that you find when you use a loan comparison site like the Student Loan Marketplace, but if you can’t find the answer to one of these important questions, be sure to pick up the phone and speak to the prospective student loan lender directly.
- 1. What is the interest rate, including floor & ceiling? What type is it – fixed or variable?
- 2. What is the estimated monthly payment and the estimated total cost?
- 3. What are the deferment options available and how do they affect total cost and monthly payments?
- 4. What fees are involved?
- 5. What are the loan requirements (proof of income, assets, etc.)?
- 6. Is there a grace period? If so, what is it?
- 7. Are there any borrower benefits (e.g., .25% off the interest rate for 24 consecutive on-time payments)?
- 8. Are there any hardship waivers available?
- 9. Is consolidation an option?
- 10. What are the borrowing limits?
If you have other important questions that we haven’t listed, let us know! And be sure to check out the Student Loan Marketplace if you are considering private student loans, as it is your best tool for comparing loans and interest rates across multiple lenders.
Image credit: Hector Alejandro (flickr)