How To Score A Low Private Student Loan Rate

The private student loan rate you are able to get will depend on two factors: the current market level of interest rates and your credit history. By preparing before you borrow, and being careful during the process, you can score a low interest rate on your private student loan.

Private Loans are an Important Alternative

Typically, the interest rates on federally-backed loans are lower than a private student loan rate. But private student loans are a vital piece of many student's overall financial package. Private loans are used to cover that part of your education expense not covered by your own money; grants and scholarships; and federally-backed loans.

Look for Competing Lenders

Private lenders offer loans at market interest rates. These rates will usually be higher than government loans and may be higher than typical interest rates on non-student loans.

Almost all banks and credit unions list current loan rates on the Internet or in your local paper. Check these rates and look for the most competitive. Once you begin discussions with a lender, be certain you understand if there are origination fees that could negate the benefit of a lower rate.

Be the Best Borrower you Can Be

Finally, every bank offering private student loans will look at your credit history and credit score before determining the private student loan rate you will pay. Be certain that you know your credit score and that you have done all you can to make it as good as it can be.

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