Nobody enjoys talking about tuition or taking out student loans. Still, it’s even less desirable to end up graduating and getting stuck with large monthly loan payments. Currently, the average student loan debt is nearly $33,000, and who knows how high this number will climb after you graduate. The smart crowd is taking notice and doing something about it now.
Federal Loans Great But Limited
Depending of the type of loan, federal student loans typically have superior interest rates. If you’re an undergrad, you could qualify for federal loans with interest rates as low as 4.45%. However, for dependent undergraduate students, the borrowing limit for the most affordable federal loans totals up to $31,000. If you add up your tuition, room, and board expenses this amount might not be enough.
You can actually borrow past this limit if you take out a Direct PLUS Loan. Be careful though since PLUS loans carry higher interest rates (currently 7%) and upfront fees can be as high as 4.3%. When compared to PLUS loans, private loans are a competitive alternative.
Shopping For A Private Student Loan
If you see your costs exceed what you can borrow from low-interest (non-PLUS) federal loan sources, you might decide to borrow from private lenders to make up the difference. In the past, this was a fairly complex and sometimes frustrating process. You basically had to go from lender to lender, fill out many loan application forms, and wait patiently for a reply.
The process often took several weeks to months depending on how many applications you filled out and how often you went out looking. Plus, it’s not uncommon to get turned down by more than one private lender at at time, and rejection isn’t easy for anyone to deal with.
Move Over To The Fast Lane
Today, the student loan market has been revolutionized by the Internet. For instance, online multi-lender marketplaces can make finding a private student loan incredibly simple — especially when compared to the old-fashioned, door-to-door method.
On these platforms you answer a few questions about yourself and then get actual rates from multiple lenders simultaneously. These are reliable prequalified rates adapted to your individual situation so you can make an informed decision. The lender marketplace doesn’t try to fool you with teaser rates because they don’t have to. Instead, they only transmit real data supplied by a variety of competing lenders.
How fast does it work? You can actually see rates within minutes of completing the online questionnaire.
Best Student Loan Results
The end result is that you get a clear picture of what lenders have to offer you now. The best part is that you can pick the most favorable interest rate and terms. Later, after you graduate (with flying colors of course), paying back your loan won’t be quite as painful. Instead, you’ll be thankful you put in the time now to secure your finances.