Student Loan Lender

By: EconomyWatch Content   Date: 26 November 2009

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Choosing a student loan lender from hundreds of lending agencies involves a thorough comparison and analysis of the terms and conditions offered. Apart from its direct lending programs, the federal government offers student loans under the Federal Family Education Loan Program (FFELP). These loans are provided through various agencies such as Sallie Mae. In addition to this, hundreds of private lenders are operational in the student loan segment.

Choosing a Student Loan Lender

All the colleges and universities provide a preferred lender list. However, the decision to select a student loan lender lies entirely with the student. The colleges cannot impose their choice on a student.

The first and the foremost step in choosing a suitable student loan lender is to check about the type of loans being offered by the various lending agencies. Some of them may just offer undergraduate loans while others may offer loans for post graduation. Similarly, some lenders offer student consolidation loans too.

The origination fee and the interest rate charged by a student loan lender are very important factors for a student. Origination fee is the fee charged to process a student’s documents and conduct other administrative tasks. Some lenders wave off the origination fees while others charge a minimal amount. A comparison of the interest rates being charged by the various student loan lenders is important. While some lenders offer fixed interest rates, others offer variable interest rates. Further, some lenders offer refinance options too.

Some student loan lenders offer borrower incentives such as a reduction in the interest rate after timely repayment of a certain number of installments. Private student loan lenders offer loans after conducting a credit check. However, many students do not have a credit record or good record. In such cases, the option of having a co signor is important and can help a student get a lower interest rate.

A student loan lender that offers the option to release the co signor after a certain period of time is a good option. A co-signor’s release will help a student to improve his/her credit record.

A student loan lender that offers 24-hour online account management services brings several advantages. It enables a student to check account settings, current loan balance and other details as well.


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