What Is The Best Type Of Student Loan To Get

Our Review Of The Top Private Student Loan Lenders And Why We Endorse Them:

Sallie Mae® has developed a wide range of private education loans and other education-related services to help make students’ dreams of higher education a reality.

Key features of Smart Option Student Loan® from Sallie Mae:

• Competitive interest rates Variable rates start from 1.13% APR to 11.23% APR1 for undergraduate students . Lowest rates shown include the auto debit discount.
• Pay now or later – Defer your payments until after you graduate or choose an in-school repayment option that fits your needs.1
• Discounts: Save with auto debit – Get a 0.25 percentage point interest rate reduction when you enroll in and make monthly payments by auto debit.1

Key features of a private student loan through Ascent include:

• 1% CASH BACK Graduation Reward.9
• AFFORDABLE fixed or variable rates.1
• CUSTOMIZE your loan with flexible repayment options.
• COVER UP TO 100% of your tuition & living expenses.
• AVOID FEES – No application, origination or disbursement fees.
• NO PENALTY FEE if you pay off your loan early.
• 0.25% – 2.00% INTEREST RATE REDUCTION for enrolling in automatic payments.
• RELEASE YOUR COSIGNER after 24 consecutive on-time payments.
• 100% US-based customer service.
• Detailed review of Ascent Student Loans

Its wrong to lose your financial freedom before youve even had a chance to earn it! To help you borrow responsibly, Ascent has incorporated financial education into their application process and give you exclusive access to tools to help you manage your money.

Choose Your Debt Amount

Home> Students & Debt> Best and Worst Student Loans: Pros and Cons

The pros and cons of student loans are a hot topic for college administrators, students and parents as each side grapples with ways to absorb the soaring cost of earning a degree.

Tuition and fees at public universities have risen an average of $2,790 the last 10 years, an increase of over 40%. Add in the cost of room and board, and students enrolled in 2016-17 forked over $20,090 a year to attend a public university and $45,370 for a private college.

That makes it more important than ever to understand what types of loans work best for you. The average college graduate in 2016 owes $37,172, so do the research to keep your repayment options open.

Be especially mindful of changing interest rates. The rates for federal loans are set by Congress and fixed for the life of the loan. The rates for 2017 ranged from 4.45% for Direct Loans to 6% for graduate and professional loans to 7% for Direct PLUS loans.

Those interest rates were slightly higher than in 2016, but lower than 2014. Thats important because higher interest rates, even half a point, can cost you thousands of dollars in difference when you pay it back over the standard repayment period of 10 years.

Common Student Loan Faqs

Here are some of the most common questions we get when it comes to finding the best student loans and borrowing to pay for college.

Which is better – federal or private student loans?

You should always borrow the maximum amount of federal student loans before moving to private student loans. Federal student loans offer more benefits, such as loan forgiveness and flexible repayment plans, compared to private student loans.

What type of student loan is best?

Federal student loans, specifically subsidized student loans, are the best to pay for college. Then you have unsubsidized loans. Many borrowers will also be offered parent PLUS loans, which we don’t recommend. Then you have private student loan options.

How can you find the lowest student loan rate?

Interest on federal student loans is fixed for all borrowers based on your school year. These rates are typically some of the lowest in the marketplace. If you’re looking at private student loans, you need to shop around and get multiple quotes on your student loan rate.

What are the drawbacks of student loans?

Student loans have drawbacks just like any other form of debt. You’re going to need to repay the debt, and your ability to repay is going to be based on your income after graduation. However, unlike other loan types, student loans have very few options for discharge – meaning you can’t easily get rid of them in bankruptcy. And the government and private lenders have a lot of collection options available to them.

Read Also: Gustan Cho Mortgage Reviews

A Word On Private Student Loans

You can get a private student loan without a parent, as well, but theres a pretty big catch.

Private student loans generally require a , but the cosigner does not need to be your parents. The cosigner can be someone else with very good or excellent credit who is willing to cosign the loan. Convincing a non-parent to co-sign a private student loan is a tall order, however, and your chances of doing so are low.

But if you have a mentor, grandparent or trusted friend with sterling credit who will cosign your loan, you may be able to qualify for a private student loan without getting your parents involved.

There are a few student loan products, like Ascents Non-Cosigned Outcomes-Based Loan, which use criteria other than credit and income, such as GPA or major, to qualify.

Keep in mind that private loans do not offer the same benefits as federal loans. These include an option to make payments based on your income, a chance for subsidized loans, generous opportunities to pause payments if you lose your job, potential for student loan forgiveness, and much more.

Tips For Graduating With Less Debt

If you’ve determined that you need student loans to pay for school, there are things you can do to keep your student debt under control.

• go to slide 1

If you’ve already borrowed student loans, make sure to keep track of how much you owe. to review your account summary and estimate your monthly payments for your Great Lakes-serviced loans.

Visit StudentAid.gov to track the total amount you owe for all of your federal student loans.

Find information about all of your loans, federal and private, on your .

Scholarships are free money that directly reduce your need for student loans. Check with your financial aid office for more tips on where to find scholarships.

If you work full-time during your break from classes, you can use that money towards education expenses, and avoid taking out too many student loans.

Many co-ops and internships let you earn money to pay your way through college, while also giving you experience and skills that can help you find a job in the future. You can search for these opportunities online, or talk to your advisor at school for more resources.

Interest accrues on some types of federal loans while you’re still in school. Paying your student loan interest as it accrues will prevent it from being added to your total balance at repayment .

You May Like: How Long Does A Sba Loan Take

Best For Refinancing: Commonbond

• Min credit score: Not disclosed
• Terms: 5-20 years

Specializing in refinancing student loans, CommonBond offers competitive rates for refinancing and multiple payment terms.

• Option to refinance parent PLUS loans to the student

• Refinance up to $500,000 in student loans

• Not available in Mississippi and Nevada

• Higher minimum borrowing amount of $2,000

• Co-signer required for student loans

While CommonBond has some tough competition for student loan refinancing, it pulls ahead thanks to offering some of the best interest rates. Refinancing rates start at 1.98% APR on variable-rate loans, 2.26% on fixed-rate loans, and 2.97% APR for a hybrid rate option. CommonBond also offers regular undergraduate student loans.

The unique hybrid-rate refinancing loan offers a fixed rate for the first five years and then switches to a variable rate. This can be a great option for borrowers who want to prepay this debt or get a headstart on repayment with a lower rate.

CommonBond has a wide range of student loan refinancing terms, from five to 20 years, so you can balance time repaying the loan with affordable monthly payments. It also offers hardship forbearance. However, deferment is not specified on CommonBonds website .

Sallie Mae Student Loan Details

Read the full reviewSallie Mae Student Loans review

Don’t Miss: Ida Auto Finance

Newfoundland And Labrador Quebec And Manitoba Student Loans

McGill UniversityImage source: Shutterstock

Newfoundland and Labrador, Quebec, and Manitoba are largely regarded as the best provinces for student financial aid, and recent developments in these provinces have made the loan process even easier. To begin with, these provinces are home to the lowest tuition rates in Canada, with Newfoundland and Labrador at an average of $2,885 per semester Quebec at $2,961 and Manitoba at a slightly higher $4,501.

Aside from having low tuition rates, the financial aid process has also improved. Newfoundland and Labrador has removed the option of provincial student loans entirely, instead offering non-repayable student grants to all qualifying permanent residents. The grants can provide students with up to a maximum of $100/week of study, with a lifetime limit ranging from 340-520 weeks, depending on the students degree of study and whether or not the student has any registered disabilities. You can register for the grant via the provinces Advanced Education, Skills, and Labour page.

The biggest advantage to taking out student loans in Quebec is the provinces impressively low interest rate: prime plus 0.5%. Better yet, if applying for Quebec financial aid, which is done through Aide Financiere aux Etudes, its mandatory to have your eligibility checked for bursaries. Bursaries are granted on the basis of financial need, scholarly excellence, and more.

Avoid Loans If Possible

The best financial move for every college student is to explore ways to pay for school without loans. The fact that 73% of 2017 college graduates had student loan debt shows that is difficult, but there are some steps you can take to minimize, if not eliminate loans.

• File a Free Application for Federal Student Aid . You wont be able to apply for federal grants or federal student loans without filing a FAFSA first.
• Pay as much of your tuition with grants and scholarships as you can. This is free money, which means you dont have to pay it back. Before you think about student loans, use your grant and scholarship money.
• Rely first on federal loan money. Federal loans are funded by the U.S. government. They offer fixed-interest rates that are lower that private loans and have flexible repayment options that private lenders dont offer.
• Start with Subsidized Direct Loans and Perkins Loans if you qualify .
• Supplement remaining college costs with unsubsidized federal loans. Interest accrues while youre in school, but rates are still better than private loans.
• Avoid PLUS loans, as they have higher interest rates and high origination fees .

You May Like: Mortgage Loan Originator License California

Best Student Loan Consolidation: Splash Financial

Splash Financial

Private student loan consolidation, also known as student loan refinancing, can be a smart way to lower your interest rate and save money over the life of your loan. Splash Financial is our pick for top student loan refinancing company.

Theres a couple different factors that impacted our decision:

• Interest rates: Splash Financial offers very low interest rates: variable rates as low as 1.74% and fixed rates as low as 2.30% .
• Cosigner release: Typically, Splash borrowers can request a cosigner release after making 12 consecutive monthly payments on time.

The minimum refinance loan amount is $5,000. There is no maximum loan amountit will depend on the specific lending partner that refinances your loans and other factors in your loan application. In order to refinance through Splash Financial, you must have obtained a 4-year degree from a Title IV accredited institution or an associate degree in an eligible field.

Read the full review: Splash Financial Student Loan Refinancing

Accessing Money From Your Student Line Of Credit

You should be able to access the available credit in your student line of credit soon after:

• youve signed all of the necessary documents
• your application is approved

You can usually access the available credit from your student line of credit at:

• a branch of your financial institution
• an ATM
• through online, mobile or telephone banking

Some lines of credit will also let you access the money by writing a cheque.

Financial institutions each have their own terms and conditions for the lines of credit that they offer. Speak with your financial institution for more information about the student borrowing options they offer.

Borrow only as much money as you need to cover your needs while studying. Think about whether youll be able to make at least the interest payments while youre studying. Also think about whether youll be able to repay the money that you borrow from a line of credit when you graduate.

Don’t Miss: Usaa Pre Approval Auto Loan

Review Your Financial Aid Offers

After submitting the FAFSA, you’ll receive a Student Aid Report, which tells you how much and what kind of federal aid you’re eligible for. Additionally, you should start to receive financial aid award letters from schools you’ve been accepted to in the spring.

Take time to compare your financial aid offers before deciding which college to attend. Once you’ve done that, you can figure out whether you may need private loans to cover any remaining costs for college.

Do Private Student Loans Have Fees

Private student loans can come with fees however, none of the lenders listed above charge an origination, application, or prepayment fee. We take this stance because we don’t believe borrowers should be charged for taking out a loan or paying one off early.

That being said, lets look at the different types of fees typically discussed with student loans.

• Origination fee: This fee is charged when you take out a loan. It’s usually calculated as a percentage of the total loan amount. For example, if you have a $10,000 loan with a 5% origination fee, the fee would come to $500. While federal student loans do come with an origination fee, none of the lenders in our list above charge one.
• Application fee: This fee is charged to you when you fill out and submit an application for a loan. Like the origination fee, none of the lenders selected above charge this fee.
• Late payment fee: This fee is charged to you if you don’t make a payment on time. A lender may set this as a flat amount or a percentage of the missed payment . Some of the lenders in our list do charge this fee, so we recommend putting together a repayment plan that can help you ensure you stay on schedule with payments.
• Prepayment fee: This fee is charged if you pay off your loan early. None of the lenders listed above charge this fee.

Also Check: What Car Can I Afford Based On Salary

Federal Student Loan Interest Rates

Federal student loan interest rates and fees are set at the start of each academic year and remain fixed for the life of the loan. Federal loans come with a standard repayment schedule and offer a wide range of repayment assistance options, including forgiveness for qualified borrowers, forbearance, deferments, and Income-Based Repayment or Pay As You Earn plans that tailor the monthly payments to your income level. For more details on eligibility criteria, repayment assistance, and current rates, visit the Federal Student Aid website.

To apply for federal student loans, you need to complete the .

If You Still Need A Private Loan Shop Around To Find The Best Deal

First, make sure you need a private student loan. We urge you to be cautious because private loans are generally more expensive than federal loans and offer little flexibility if you have trouble making payments later on. Your private loan interest rate and monthly payment could change with little warning, and you will have fewer options for when and how much you repay.

However, private loans may be a reasonable option for some borrowers, especially if you have strong credit history. Private lenders may allow you to borrow larger amounts, depending on your need and credit history. If you shop around and can show ability to repay, you may be able to find low interest rates relative to certain federal loans.

Read Also: Car Loans Usaa

Citizens Bank Student Loan Details

Read the full review Citizens Bank Student Loans review

How Do I Apply For A Parent Plus Loan

You can easily apply for a parent PLUS loan on the Federal Student Aid website. Youll need to complete your online application in a single session, but the entire process usually only takes about 20 minutes.

On the first page of the application, youll provide information about the student for whom youre borrowing, as well as details on their school and the loan you want to borrow. Next, youll provide your own personal details and consent to a credit check.

As explained above, you may have to apply with an endorser if you have adverse credit. If youve placed a freeze on your credit, youll also need to remove it before your application can be processed.

Once your loan is approved, Federal Student Aid will send it directly to the school to cover expenses. If theres a remaining balance, you can choose to have it sent to you or to the student.

Recommended Reading: Capital One Auto Loan Interest Rates