How Do I Choose a Lender?
"How Do I Choose a Lender?" submitted by SchoolGrantsfor Editorial Team and last updated on Monday 8th August 2011
You should give some thought to choosing a lender. Many students may become totally dependent on the school and the school's preferred lender list. That can be okay, but keep in mind there are subtle differences that may save you money and provide you better service over the life of the loan. You may want to spend some time evaluating lenders to determine if their rates and customer service levels best suit your needs. You do have the choice to select any lender you want to use.
Before you choose a lender you know know related information such as:
- Servicing Agencies (Servicers)
- Collection Agency and Guaranty Agency
- Secondary Market
- Administrative Forbearance
- Mandatory Administrative Forbearance
Also Check our faq for lender:
- Why is it so important that I communicate with my lender?
- What kind of information must be reported to my lender?
- Can I change my repayment plan?
Since Federal Consolidation Loans are governed by federal regulations, you will find the basics of the loan (such as the weighted average interest rate and deferment eligibility) will be the same from lender to lender. The differences between lenders will be in their incentive programs. Some lenders offer incentives such as lower interest rates for automatic payments or rebates for consecutive, on-time payments. If the school of your choice participates in the FFEL Program, you can choose from the school's preferred list of lenders or a lender of your choice. You'll want to compare the following aspects of lender services when deciding which lender to choose:
- Ability of lender to service all your loans.
- Interest rates and terms: Although these are very similar for the federal loan programs, some lenders do offer better terms or discounts.
- Loan application processes: Can you apply online? Is instant loan approval offered?
- Repayment plans: some are simple, others complex.
- Benefits for borrowers who pay on time or make loan payments electronically.
- Customer service: Can you reach a live operator quickly to check on the status of your loan during hours convenient for you?
- Parent borrowers may want to select a lender that offers resolution for adverse credit. PLUS loans require a credit check; some lenders have staff that work with creditors to resolve outstanding credit issues.
Finally, using one lender is a very important consideration, if you want to eliminate confusion when you start repaying your loans. For more information, check below: