When it comes to finding the best private student loan rates for YOU, I give the same advice over and over - SHOP AROUND!
I can't tell you which lender will give you the best rate. That's because each lender has their own credit algorithm for reviewing what's important to their business before offering borrowers a rate.
This year I decided to talk to a few parents and ask if they would be willing to share where they got the best student loan rates and what the process was like for them.
Keep in mind that this was an informal assessment, but I learned a few new things I wanted to share: - Make sure you are comparing apples to apples! Interest rates quoted on Credible, a loan aggregator site, included the autopay discount. Rates quoted by lenders on their website did NOT include the autopay. It appeared Credible had lower rates, but that was not the case.
- Which term you choose (i.e. 5, 10. 15) and how quickly you start paying back the loan, impact the interest rate. You'll get the best interest rate if you can pay back the loan in the shortest amount of time and you start payments immediately, while your student is in college.
- The quality of a lender's customer service reps can make a difference. You'll be dealing with the lender for a minimum of 5 years and in most cases, longer. Were they knowledgable and helpful?
- Call the lender and ask if there's any additional information you can provide for their decision process. One parent shared additional financial information that wasn't asked for on the lender's application.
Don't be afraid that applying to multiple lenders will make a big dent in your credit score.
When you apply for the same type of loan within a few weeks the credit bureaus know you are shopping for rates, so there's very little effect on your credit score.
The entire Student Loan process can be so stressful, but I can't emphasize enough the importance of shopping around for the best interest rate and comparing all your options.
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