Student loan tips

Tips on Student Loans for College Students and Families

Know all of your student loan options - Investigate many different student loans before applying to get the best student loan or student loans for your needs.

Look beyond the annual percentage rate (APR) - Other factors to consider include the total cost of the loan, how long the deferment period is, and when the first payment is due.

Find a co-signer for private student loans - A student borrower may not be approved without a co-signer, especially younger students without credit histories. And, better rate / fee combinations are usually available only when applying for a student loan with a credit-worthy co-signer.

Confirm loan details with your lender - Ask for confirmation on the interest rates, fees and other loan attributes, such as borrower benefits, with your student loan lender before committing to the loan.

Know how and when the student loan money is disbursed - Confirm if the lender sends the student loan funds to the borrower or if they go to the school directly. Confusion over where the money has gone can delay settling your account. Know how long it will take to process your student loan application.

Ask if the lender uses a servicer - This is a separate company that handles the details of processing and collecting student loan payments, customer service questions from borrowers, originating the loan, and more. Borrowers are often confused when they think they are taking out a loan from Company X, but then get paperwork from Company Y. Communicate with your servicer with questions, address changes or changes to your status as a student.

Find out if the lender will capitalize the interest on the student loan - Some lenders will take the interest that accrues when you are in school and add it to the principal, or the original borrowed amount. This usually only applies to unsubsidized federal student loans and private student loans. Capitalization increases the amount owed and the amount of each monthly payment of your student loan. Some lenders capitalize interest every 3 or 6 months; others once a year. The least expensive option is capitalizing interest only once.

Learn about student loan repayment assistance options - Look for a lender that will help manage your money with options for payment plans and repayment assistance. For example, graduated repayment means your student loan monthly payments start out lower and increase as you earn more money.

Choose a student loan lender with good customer service - Remember that you are the customer - in most cases, you have plenty of options for a lender and student loans are a big commitment. Make sure to find a lender who you can reach with a toll-free telephone number or fast online assistance available around the clock.