Paying for college is not a walk in the park. Ask any college student. Scholarships, grants and savings – to many – do not necessarily cover all your costs. And working, for long hours, does not help either as it will just hurt your grades. That is when student loans come in handy. But how exactly do you get a fair deal when shopping for a loan?
It is prudent to first start with the safest loans. And nothing could scream better than federal loans. Start there. Here is why; with federal loans you are guaranteed of a borrower protection – it helps when you have financial problems. Or better still, if you are currently unemployed.
The beauty with federal loans is that their interest rates do not change with time. Also, they are not in any way affected by your credit rating. How suitable is that! Within the federal loans they are subsidized and unsubsidized loans, which are both affordable and convenient. Choose wisely.
There are also private student loans. These are a lot riskier than the aforementioned loans, as they do not have borrower protections. Be aware, the loans are said to have rates, which are small but grow bigger with time. Their interest’s costs can also surpass whatever you borrowed earlier.
Another important tip is to shop around for loans. Your school might recommend that you borrow from a preferred lender. Try to find out reasons for doing so. Get to understand the lender’s full terms and conditions – of what they have to offer prior to making any commitments.
Find out what are the lenders discount options. Will the options remain in place even after the loan is sold out to another company? Such questions are crucial. Private loans can prove hard and tricky to compare. As the real terms of the loan are not made visible until you have signed for it. They are hidden in print. Be wise.