Like with any kind of lending, acquiring a student loan is a huge decision and commitment. If you are thinking about taking out a student loan to cover the costs of tuition, then you may be wondering what questions you should be asking when inquiring.
There are student loan questions that you should ask both yourself and the lender. Here are some important questions you should be asking when looking for a student loan.
When looking for a student loan, there are two options to consider:
- The Federal Government
- Private Lenders
Depending on which lending option you choose, the questions that you may ask them could be different.
What Questions Should I Ask When Looking for a Student Loan?
When you are looking to get a student loan, here are a few things to ask about:
Amount Being Borrowed
Before looking for a student loan, it is important to know much you will need to borrow. There are maximum amounts that the federal government can give out, and there are caps on what a single private lender can give out to a single borrower.
It is definitely important to ask about how much you are getting from your student loan, so you know if you have as much as you need. Additionally, it is important to remember you never have to borrow more than you need.
It is recommended that you borrow as much as you can from the federal government before borrowing from private lenders. This is because Federal student loans have lower interest rates and more flexible repayment options.
Interest Rate for Your Loan
A huge thing to ask about with any kind of lending, including student loans, is how much the interest will be. The interest is the largest cost associated with any loan, so remember to ask about both the MPR (monthly percentage rate) and the APR (annual percentage rate).
How Soon Do You Have to Start Paying Back the Loan?
With many student loans, a borrower may have the option to wait until they graduate to start paying back their loan. Most Federal student loans have this option, but not all private loans will. And so, make sure to verify when your repayment starts.
What Happens if You Cannot Finish School?
Sometimes things can happen unexpectedly, or you may even find while attending school, that it is not right for you. Even if you do not think a scenario like that could apply to you, it is extremely important that you know exactly how repayment will work for your loan if you have to leave school.
What Will the Repayment Plan Look Like?
With both private lenders and the federal government, there are all kinds of different ways to repay. Ask when repayment will start, what the monthly payment will look like, and finally about how many years repayment will take.
What Happens if You Start Another Program?
If you are planning to study further than an undergraduate degree, it is important to ask about what will happen to the loan repayment if you do decide to continue school. Many student loans can be deferred until completing another degree.
What Questions Should I Ask Myself, Regardless of Lender, When Getting a Student Loan?
Here are some things to ask yourself before looking at student loans:
Have I Looked at Scholarships?
If you haven’t applied for scholarships, you definitely should. There are tons of free funding out there if you take the time to look. Try applying for a few before looking for student loans.
Have I Received Everything I Can from Federal Funding?
When you do have to take out student loans, ensure you have exhausted funding form the federal government first.
Are There Any Other Ways to Fund School?
For graduate or PHD students, there are tons of work they can do for schools in order to get funding for tuition.
What Additional Questions I Should Ask When Getting Student Loans from a Private Lender?
Here are a few quick questions to ask when working with a private lender:
- How much experience do they have in the industry?
- Can they help answer any questions after you take out the loan?
- Are they a reputable company?
- What have other people’s experiences been like?
- Are they competitive with their interest rates?
MaxCash is a private lender that has been in the lending industry for several years. We cut down tons of time and effort with the lending process by doing the work for our customers. Find out more about us by reaching out via phone at 1-833-207-9052 or via email at email@example.com.