The rates and terms you get on your student loans can have profound long term implications on your financial wellbeing.
This is especially true with millions of Americans being driven towards unsavory career choices, delayed homeownership, and even late marriages owing to the burden of decades-long repayment schedules, often going well-into middle age.
With innumerable players and diverse offerings, the student loan ecosystem has plenty of lucrative deals that offer enormous value to borrowers.
If you know where to look, and put in the effort, you can find the right deals allowing you to emerge unscathed from the mountain of debt within just a few years of graduating.
Here are some tried and tested tips to find such deals.
Use Comparison Sites
Not to sound cliché, but often the best deal is staring you right in the face. Having all the major student providers with their rates, terms, features, and requirements in one place is a great starting point.
This is especially true with the growing clout of financial comparison sites, forcing lenders to up their offerings in order to stay visible and generate leads.
Student loan marketplaces and comparison sites such as Credible, StudentLoanHero, and LendEdu add plenty of value to borrowers.
Starting your search with them is an absolute no brainer. These sites do earn a commission for every referral they send, but this in no way conflicts with your interests.
Shop Around For The Best Offers
When using aggregators or comparison sites, make sure to apply for all programs that you are eligible for, not just one.
It may seem adequate to simply pick the lender offering the lowest rates and most favorable terms, but since approvals are not guaranteed, and the rates aren’t written in stone, it is highly recommended that you try your luck with multiple eligible programs.
The rates advertised by lenders are never what is offered to students, which is why most such comparison sites post a range. The only way to figure out the rates you will be approved for is to apply to as many as possible.
Responsible borrowers are cautious about taking on too much debt, as it could lead to private student loan default and damage their credit scores, making future financing nearly impossible.
Negotiate Interest Rates
If you are going with private non-federal student loans, you might be able to negotiate a lower rate of interest after you receive your offer. Historically, lenders have never been open to such negotiations, especially since most students have no discernible credit history, making them high-risk.
Lenders might just give in to your tenacity and stubbornness, if not for the intensifying competition in this space. While it still remains relatively unknown, it is not unheard of, and applicants have worked towards negotiating lower rates in recent years.
Just by knocking off a few basis points on your APRs can save you $100s or even $1,000s over the years, so it doesn’t hurt to try.
Final Verdict
Unmanageable student loan debt affects more than just your financial independence, you will be forced to put your dreams on hold.
Unlike auto or business loans, there is no way to make it go away by declaring bankruptcy, or by just returning your car, you are stuck with it for years. This makes it all the more essential to put in the time and effort to find the perfect deal to fund your education.
