| About half of all students nationwide will take out a | | | | Finally, credit card debt should be an option of last |
| student loan during their college years. That leaves a | | | | resort. It's expensive, especially if you carry a |
| lot of debt floating around out there, but it's for a | | | | monthly balance, and it can haunt your credit report |
| good cause. Student loans have become a fact of | | | | for a long time. Go for a Stafford loan first. If you |
| life for many of us, especially since education is | | | | truly need to more, then carefully check out the |
| getting harder to afford. So, if you decide that a | | | | other options before committing yourself. |
| student loan is what you need to get through school, | | | | Customer service is another area where some |
| take a moment to consider what you want in a | | | | lenders clearly excel over others. The federal |
| lender. | | | | government can make lenders adhere to interest |
| The right lender can make your loan repayment a | | | | rate guidelines, but it can't make them pleasant to |
| fairly painless process. A bad one can mean one big | | | | deal with. To make sure you choose a good one, |
| financial headache. All federal student loans must | | | | pay a visit to your school's financial aid office. They |
| offer the same interest rates and fees. Some lenders | | | | usually have the scoop on problem lenders. While |
| offer extra incentives to repay your loans in a timely | | | | you're there, ask them if they have a preferred |
| manner, such as prompt payment discounts. These | | | | lender list. This can help narrow down your choices. |
| can be earned by setting up automatic monthly | | | | Ask questions. Does the lender have online |
| payments through your bank account, or by making | | | | repayment options? Do they combine payments of |
| your successive monthly payments on time - typically | | | | Federal and private loans? Is their customer service |
| for 12 to 48 months. Students who go the auto-debit | | | | available by phone, toll-free and 24 hours? These are |
| route have a higher repayment success rate, but | | | | things to consider before selecting a lender. |
| should always make sure they have enough money | | | | Also, be aware that lenders can sell your loan to third |
| in their account to cover the bank draft. One missed | | | | parties once the loan hits repayment status. These |
| or late payment is enough to disqualify students from | | | | third parties will then service your loan, which means |
| these discounts. | | | | you won't be dealing with the bank or group that |
| All student loans are not created equal. Federal | | | | issued the loan. This can be good or bad. If you'd |
| Stafford loans are some of the cheapest you can | | | | rather deal with the same group throughout your |
| find, and the repayment terms are flexible as well. | | | | repayment process, look around for lenders that |
| There are limits to how much you can borrow, | | | | offer life-of-the-loan servicing. |
| though. If you need more money, you can ask your | | | | Shopping around for a student loan is a lot like |
| family to consider a PLUS loan. They, too, are | | | | shopping for a car or a credit card. The terms and |
| relatively inexpensive, but parents are held | | | | the service make all the difference. You don't want |
| responsible for repayment if the student defaults, | | | | to end up owing much more than you thought you |
| just as they would be if they co-signed for a private | | | | would, or having to deal with discourteous loan |
| education loan. Private loans are among the most | | | | servicers. Look for lenders who have a good |
| expensive student loans available. They tend to have | | | | reputation for communicating well, taking care of |
| higher interest rates, but students can borrow more | | | | their borrowers, and making the repayment process |
| money with them. (That's not always a good thing!) | | | | as convenient as possible. |