Want the best private student loan interest rate? Do this now
If you're a college student who has not yet started the fall semester, then you probably only have weeks (if not days) left until you do. With a new school year comes new stresses and concerns. One item that can be dealt with in advance, however, is your financial aid and planning. While grants, scholarships and federal student loans can help fund most of your higher education, they don't always meet all of your requirements.
This is where private student loans come into play.
Private student loans offer multiple benefits for borrowers, from generally quicker approval times to greater borrowing amounts and more. But they don't work exactly like federal student loans do. As such, students should do their research in order to find the best student loan rate and terms for their needs. While there are multiple ways to get the best private student loan rate, there's arguably one strategy that's the most important for borrowers.
Start exploring your student loan options here to see what you're eligible to receive.
What to do to get the best private student interest rate
With so many private student loan lenders on the market currently, one of the best things borrowers can do is to shop around for the very best rate. This means getting quotes from at least three lenders, although more could help better establish a baseline to compare against.
Just make sure that the terms you apply for with one lender are identical across the board. So, if you get a quote for one amount, make sure it's the same amount with the same repayment timeline as the second and third lender, too.
"Look for lenders that offer competitive interest rates and flexible repayment options that meet your unique budget and financial goals," Angela Colatriano, chief marketing officer at College Ave Student Loans, recently told CBS News. "You'll also want to look for a reputable student loan provider with strong customer service. Be sure to read reviews and check out servicing features such as a mobile app and the variety of contact methods available if you do need to reach out to customer service for help."
If you're looking for a private student loan in August, time isn't on your side. But don't just take the first offer you get, even if it does meet your immediate financial needs.
Private student loans make great last-minute options, particularly as ways to fund any financing gaps. That said, you will be paying these loans off for years to come, so make sure to get the best rate possible now.
Start shopping lenders here now or in the table below.
Other ways to get the best private student loan interest rate
While shopping around for the best lender is one of the most effective ways to get a great private student loan interest rate, it isn't the only approach to take. Here are two other things borrowers can do now to improve their chances of getting a good rate:
Boost your credit score
The best rates and terms will always go to borrowers with the highest credit scores and cleanest credit histories. So, if you want to get a competitive rate, make sure to get your credit in the best shape possible. This takes time, however, so if you won't be able to improve it significantly in time for your loan application, consider adding a qualified cosigner to improve your standing.
Consider a shorter loan term
A shorter loan term may not always be feasible, but if you can afford to pay your loan off in a quicker timeframe, lenders may reward you with a lower interest rate. Crunch the numbers and see if you could potentially pay off your loan in five years instead of 10 or 20. The lower rate may make it more realistic than you originally thought.
The bottom line
While improving your credit score, adding a cosigner and considering a shorter loan term can all help borrowers secure a good private student loan interest rate, shopping around for lenders may be the definitive way to do so. By shopping for lenders, borrowers can gain a better understanding of their options so that they truly do secure the lowest and most competitive rate available at the time of application. Get started here today!
