| Navigating the private student loans sector reminds me | | | | that falls in the range of 3% to 4% is just about the |
| of trying to walk across a mine field blindfolded. You'd | | | | same as adding 1% to your interest rate. |
| think that the interest rates for private student loans | | | | 4. Can I repay this loan faster and exactly what are |
| would be dropping since the prime rate is or at near | | | | your payment options? |
| zero. Nothing is further from the truth. | | | | Any time you owe money and interest accrues you |
| Re-read this article many times, take notes and use | | | | need to eliminate that debt as soon as possible. Some |
| this criteria the next time you sit down and discuss | | | | private lenders want to squeeze all the money they |
| private student loans with your lender. Please make | | | | can out of that loan. The only way they can do that is |
| your lender explain the following terms that will be used | | | | by charging you a fee for paying off your student loan |
| a lot. | | | | early. A good lender will provide several options to |
| - Prime Lending Rate | | | | meet your repayment needs. |
| - LIBOR Index (London Interbank Offered Rate) | | | | 5. Can I get a graduation discount? |
| - Annual Percentage Rate (APR) | | | | If you show proof that you graduate, some institutions |
| Top 7 Questions You Need to Ask Your Lender | | | | will offer you a discount on your student loan. |
| 1. Which index will you be using to determine my | | | | 6. What kind of tax break can I expect? |
| interest rate. The two major index lenders used to | | | | Once you begin to pay off your student loans you will |
| determine your interest rates are the LIBOR index and | | | | be able to write off the interest on your student loans. |
| the prime lending rate. Make them show you why the | | | | For my nephew it is substantial. Make sure and have |
| rate they use is better than the other one. | | | | your lender show you these advantages and combine |
| The LIBOR index (London Interbank Offered Rate) | | | | them with this next question. |
| starts with how much your lender has to pay on the | | | | 7. Please show me on paper, exactly how much I will |
| money borrowed. Then they will add a buffer to it to | | | | be paying by the end of my loan. |
| help them make money. Over the past several years | | | | These pieces of paper will helped us tremendously |
| the spread between the LIBOR and the Prime lending | | | | when it's time to finally make a decision on who we |
| rate has increased which means it is better to go after | | | | borrow money from. You'll love the ease of comparing |
| the LIBOR because the interest rates move upwards | | | | when you have each paper sitting side by side. |
| more slowly, thus saving you more money on the | | | | A few other facts you should know: |
| entire loan. | | | | - use private student loans as a last resort after you |
| However as you have read in the papers and heard | | | | have failed to get a federal student loan. |
| on TV, interest rates are falling so that is why you | | | | - these loans are also good as a supplement but only |
| need them to compare both methods. | | | | borrow what you absolutely need. |
| 2. How much will my co-signers credit rating influence | | | | - they are not your last option when it comes to finding |
| the interest rate? | | | | a student loan, but they are better than the other |
| Most college student use their parents or other family | | | | options available to you. |
| member as their co-signer. If you are going to shop for | | | | - once you are approved for the loan you can expect |
| the best interest rates you should also shop for the | | | | to see the money in as little as 14 days. |
| best co-signers. They can either make or break you. | | | | - unlike federal student loans, you don't have apply |
| 3. What fees are associated with this loan? | | | | through FAFSA first, you can get these loans at any |
| Lenders are notorious for adding fees to the loans. | | | | time. |
| Application fees are the most common fees. Any fee | | | | |