Financing an education is a challenge, but bank student loans can help. These are loans made directly by lending institutions, usually to supplement money from other aid sources. The details of bank student loans vary from state to state and lender to lender, but the following aspects should be considered before any student signs on the dotted line.
Choosing a Lender
The Bank
There are a number of factors to consider in choosing the bank for bank student loans. For starters, not all banks grant bank student loans to students of all institutions. Any financial institution that will not make loans for school the borrower wishes to attend is not a prospect. The next factor is stability. Bank student loans are no help in financing anything if the bank fails. Almost as important is the lender's reputation. A check with consumer agencies will reveal any reports of unfair practices such as discrimination or deception about bank student loans. College financial aid offices have valuable information about this. Also consider that may be substantially easier to qualify for bank student loans at one bank than at another.
The Offer
Even if the lender is up to par, one has to consider the particular bank student loans on offer. The interest rate on bank student loans is a huge factor. The individual lender determines the interest rate on bank student loans on a case by case basis. This rate is usually fixed and will be based on the lender's judgment of the student's ability to repay bank student loans. The primary factor will be the individual student's credit history. Shopping around is the only way a student can find the best rate on bank student loans.
Rates are not the whole story, though. Students should consider the quality of a lender's customer service. It should be easy to get answers to simple questions about bank student loans and to deal with any problems that might arise. Another thing to look at is the terms of deferment and forbearance on bank student loans, ranging from the date the student will have to make the first payment to the bank's flexibility if the student's cir cumstances change. One should also consider special programs that the lender may offer with their bank student loans. If these are suitable to the student's situation and result in a lower overall cost for bank student loans, that fact should be taken into account when comparing loans.
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