Kids and Money: In the Private Student Loan Market?Please be sure to shop [column] | Money

Smart shoppers can keep an eye out for deals in the summer even when looking for a personal student loan from a bank, credit union, or other lender.

Student loan deposits are paid during the summer and other college bills are paid at the end of the summer. So, if you still need cash and run out of federal student loan and federal scholarship restrictions, the private sector loans are optional.

In general, these are important warnings as personal student loans from online lenders such as banks, credit unions, Sallie Mae, SoFi, and Edvestin U should be a last resort.

One of the biggest problems with personal student loans is that a lot of families don’t do survey and comparison shops, even though there are so many websites out there that make it easy.

Remember, many websites don’t list all of the lenders, just what they pay to mediate, and a financial aid expert said, “More. Mark Cantrowitz, author of How to Appeal for College Financial Assistance, said. Therefore, the highest advertised price may not be the highest price. You may have to dig deeper to find a better price.

According to Cantrowitz, few local small banks offer their own private student loans. “You can offer personal loans, mortgage loans, and lines of credit,” he said. However, repayments begin immediately with these loans and are not postponed until completion.

Other details to consider are:

• Most student private student loans require a credible co-signer, e.g. B. a parent or grandparent. Remember that the co-signer is a co-borrower and is required to repay the debt for 10, 20, and even 25 years. CollegeFinance.com ..
• Compare the two monthly loan payments with the total payments during the loan term. Longer repayment periods can lead to lower monthly prepayments, but also to a loss of savings and higher total interest.
• Ask the lender about the loan composition and other fees. Most private lenders do not charge prepaid fees.
• Consider floating and fixed rates. For example, Sallie Mae offers fixed rate loans ranging from 4.25% to 12.59%. The floating rate loan starts at 1.13% and runs up to 11.23%. However, variable interest rates carry a higher risk. When interest rates rise over the life of the loan, the student loan interest rate usually also rises.
• Look for a lender who offers “borrower interests,” Walker said. For example, many lenders allow borrowers to sign up for automatic payments. This has the added benefit of low interest rates. He said some lenders also offer cashback for graduation or high grade averages.

Is it also important that lenders offer call center options in the evenings and on weekends?

• Some private student loans can be postponed or postponed, but the terms tend to be inflexible and may not be very long. Interest is also paid on personal loans, regardless of whether you submit a deferral or a goodwill application. In addition, loan and debt relief programs are not available for personal loans.
• After all, if you are taking advantage of all other credit options it can be a sign that you are borrowing too much money. “Only borrow what you need and not as much as you can,” says Cantrowitz.

“I live like a student while I’m in school so I don’t have to live like a student after graduation,” he said.

Children and Money: In the Private Student Loan Market? Please be sure to go shopping [column] | money

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