Guide: Finding the Best Student Loans & Best Private Student Loan Rates
There’s a time of change coming in your life or in your child’s life: moving from home to college or undergrad to graduate school.
So, who are the best student loans for?
- Undergraduate students with financial need
- Graduate students with financial need
- Parents of students
- Students who don’t qualify for scholarships
If you fall into one of those categories, this guide on the best school loans and best private loans will be great for you.
Hopefully, you have begun to research the best student loan options out there. We’ve compiled this guide to tell you more about the types of best loans for students and how to pick out the best places for student loans.
We’ll also tell you how to weigh the best student loan rates with the best student loan options in terms of customer ratings and other features.
How to Pay for College
It’s best to use the best loans for students in combination with other methods.
Use free money first. Beyond finding the best student loans, there are plenty of options out there to help with college payments. Take advantage of any grant, scholarship, or financial aid opportunities that you can apply for.
You must realize that this means you need to be proactive in searching out these scholarship opportunities in order to submit your application by the deadline. A helpful tool for searching for scholarships can be found through CollegeBoard.com. More information about federal grants can be found here.
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Use federal loans next. These low-interest, fixed-rate loans that are offered by the federal government are traditionally far more cost-efficient than the offerings of most private lenders. The best case scenario is when you qualify for subsidized loans, perhaps the best student loans, because the government will pay your interest while you’re in school.
However, you run the risk of your loan defaulting if your student loan is handled by the Department of Education’s main loan contractor, according to a startling new report by the Association of Community College Trustees.
This risk is greater than if you dropped out of college or failed to complete a single class, adding to growing evidence that the Education Department is failing to properly monitor its loan contractors.
Furthermore, a reason why federal loans might not always be the best student loan options is that some repaying student loans have been overcharged, according to an article by Forbes. Despite these potential setbacks, on average, you will get the best student loan rates from federal loans.
Use private loans last of all. The fixed rates for private loans are usually higher than the fixed rates for federal loans.
However, sometimes making use of private loans is a necessity, like if your academic costs are not fully covered by scholarships and federal loans. Additionally, there is an element of convenience that makes it worthwhile at times to utilize the best private student loans. As the private sector is more competitive, you will know that you’re receiving the best student loan options.
Find and Compare the Best Student Loans
To find the best student loans, it’s important to learn about the different types of student loans out there.
Federal loans: Funded by the government, these usually offer the best student loan rates and may be included in a financial aid package.
Federal Direct subsidized loans: Available to undergraduate students with demonstrated financial need. This is one of the best loans for students because the government pays interest while students are in school and enrolled at least half-time, and for the first six months after graduation.
Federal Direct unsubsidized loans: Available to undergraduate and graduate students without demonstrated financial need.
Federal Direct PLUS loan: Available to both graduate students and their parents. The borrower is responsible for the interest payments. This is the best education loan for parents taking out a loan for their student.
Federal Perkins loan: Low-interest federal loans for both undergraduate and graduate students with extreme financial need.
Private loans: Nonfederal loans made by a bank, credit union, school, state agency, or other lender. The terms, benefits, and amounts vary, and sometimes the features of the best private student loans make them the best student loan options.
How to Pick out the Best Education Loan
There are a few characteristics to look at when deciding which are the best student loans for you.
1. Low interest rate
The best loans for students have low interest rates. But be careful if a company advertises a range of rates, as they are unlikely to actually offer the lowest rate.
2. Fixed interest rate
Variable rates are subject to change and the behavior of the market, so the best student loan rates have a fixed interest rate. This way you’ll pay the same amount in interest over the life of the loan, making it the best education loan option.
3. Low (or no) fees
Beyond the expense of interest, the best student loan rates will encompass little or no fees. Make sure to compare fees when perusing various options to keep overall costs as low as possible.
4. Additional support and benefits
Look for loans that provide a deferral period after graduation: this is a sign of one of the best private loans. Flexibility in terms of being able to restructure your monthly payments is key to the best student loan options.
Furthermore, if your lender offers support like debt management programs, educational resources, and dedicated customer service employees, these assets will help you manage your student loan debt after you graduate.
Various Features of the Best School Loans
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- Cash back: Lenders give cash-back on the loan for on-time payments.
- Interest: Lower interest-rates, the best student loan rates, save a significant amount of money over time.
- Amount: A smaller loan size can make a big difference, so borrow as little as you can.
- Application Process: in most cases, the best private student loan will have a simple application.
- Requirements: Some loans require you to have a certain credit score, while others look at your current debt and repayment patterns.
- Fund transfer: How will you receive the loan proceeds? Find out if the funds will be distributed over a period of time or in one lump sum.
Reseller of loans
- Change of terms: The best private student loan will keep the same terms even if the loan is resold.
- Markets: The best private loans are from a lender with only one secondary market.
- New owners: You can check company reviews of the new company that will buy your student loan. The best places for student loans will be reputable and easy to work with.
- Contact: To make your loan process the best education loan process possible, find out who the servicer is for your loan. It’s important to update them with your information, such as change of address or income.
- Payment method: What are the methods of payment that the servicer accepts? The best private student loans will give you multiple options.
- Graduated repayment: This is one of the best student loan options, as you are required to pay less at the start of your payments, with an increase in repayment requirements as your income grows over time.
- Consolidation: The best private loans also offer you the chance to pay off multiple loans in one lump monthly payment.
Compare Reviews for Top Rated, Best Student Loans
Consumer Affairs.com has some of the most helpful information in terms of deciding which are the best private student loans. The best school loans have great reviews, both by customers and experts alike. Here are some of the best student loans out there for your consideration.
PNC provides some of the best private student loans that help bridge the divide between federal financial assistance and education costs. The best private student loan that PNC has to offer is one of the best loans for students because of the additional support you will have as a customer. PNC has multiple online tools that educate their customers about understanding and fulfilling loan repayment obligations.
Credible Labs was founded in 1972 and remains one of the best student loan options today. Their website is one of the best places for student loan comparison shopping, as customers can compare loans 24 hours a day for free. Additionally, what puts them at the top of the best private student loan list is the personalization they provide from top private lenders.
This non-profit organization offers some of the best student loan options. Their goals include helping students pay for their education expenses and also to borrow responsibly. Great Lakes is also a servicer for the Department of Education and other private lenders.
Some of the best student loans are still to be found from the U.S. Education Department. The Department’s mission is to promote student achievement, and one way they do this is by providing students with access to fixed-rate loans and helping them pay the loans off. Their loans usually offer the best student loan rates, even if there are fewer additional resources for the customer than those available for the best private student loans.
Another division of the federal loans, the Federal Student Aid programs offer the largest amount of college financial assistance. Direct loans are one of the best student loan options because the repayment process is usually easier.
Sallie Mae is one of the largest and most well-known company for giving the best private student loans. The company has offered a variety of loans to students as well as parents of students for over forty years. Over 30 million Americans have been serviced by Sallie Mae.
Wells Fargo is one of the largest banks in the United States, and it provides backing for a variety of some of the best private student loans. Furthermore, Wells Fargo also offers some of the best private loans to students who need additional financial aid beyond the maximum amount offered by the federal government.
Citi Student Loans is one of the best student loan options as they provide educational materials and a step-by-step process which will teach the customer how to pay off student loans. Citi Student Loans is also one of the best student loan options because they offer multiple repayment plans and accept various methods of payment. The best school loans will be convenient, which is no doubt a characteristic of Citi Student Loans.
Conclusion: Finding Great Student Loans and Rates
Without a doubt, it can be difficult to navigate the world of student loans to find which are the best student loans.
Beyond federal assistance, you may be hoping to find the best private student loan. Hopefully, with these tools and tips about the best places for student loans and finding the best student loan rates, you will be able to find the best education loan for your specific situation.
AdvisoryHQ (AHQ) Disclaimer: Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info. Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.
AdvisoryHQ (AHQ) Disclaimer:
Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.
Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.