Private Student Loan Lenders: What To Look For

Private student loan lenders can range from reputable commercial lending institutions - such as a bank or credit union that you trust - to predatory lenders seeking the best deal for them, often at your expense. The key is to look for a competitive, customer-focused lender.

Why Take out a Private Student Loan?

Private education loans can fill an important hole in your school financing. These loans help you bridge the gap between your total education expense and the combined total of money you have saved; grants and scholarships; and government-backed loans.

Most banks and credit unions will have a section dedicated to private education loans. There are also many reputable internet-based private student loan lenders.

Competitive Rates, Customer Focus

In choosing from the array of private student loan lenders, look first for a reputation of good customer service. Again, if using the Internet, search a lender's name and see what other customers have said. You want a lender that has built success by helping others succeed.

Lenders with such a track record will offer you the best interest rate they can, but you have a role in this. The lower your credit rating, the higher your interest rate will be. Additionally, private student loans are not subsidized by the government. Subsidized loans often have below-market interest rates. Private school loan lenders typically begin at market rates and go up depending on your credit score.

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