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Stafford Loan

Choosing a lender for a Stafford loan

The federal government gives out the Stafford loan. These loans are given to students who have got admission in any certified educational institution. The student starts repaying the loan after the graduation is completed. These loans are either subsidized or un-subsidized. The interest rate is charged only when the repayment period starts when you take a subsidized loan. But in case of an un-subsidized loan you will have to pay the interest as soon as the loan is given out.

When looking for a Stafford loan you would obviously require a lender. When you look for lenders for the Stafford loan make sure that the lender sells its loans to Sallie Mae, which is the Student Loan Marketing Association. Sallie Mae alone is the owner of 1/3rd of the student loans and to make the offers more impressive Sallie Mae has many enticements for borrowers of student loans.

When looking for a Stafford loan lender you should know that there are a number of banks and financial institutions and moreover credit unions that offer these loans. So getting a loan from any of these organizations would be a wise choice.

While choosing a lender it is very important that you look into the enticements and the benefits the lender has to offer you. Before you start on a deal with the lender make sure that you have asked him about the front and back end benefits. If the lender has front benefits then you can save some cash in the beginning of the loan period. The front-end benefits would typically include a lower amount of origination cost; discount on the interest rates; a negligible or no guarantee fees.

If the lender has back-end benefits then you can have a lower rate of interest on every payment that you pay on time or on any consecutive payments and any direct debit payments. Besides if you consider loan consolidation with the lender then you can have the offer of a fixed interest rate. There are many lenders who have facilities like electronic fund transmission. This ensures faster processing of the loan and also a planned assistance.

When you decide to take an unsubsidized Stafford loan then you should make sure as to when does the lender capitalize the interest rate. When the lender capitalizes interest only once during the repayment of the loan can help you save money than lenders who capitalize their interest rates more repeatedly. More often the interest rates are capitalized the more interest you will have to pay. So before you choose your lender make sure that you have asked about his frequency of capitalizing the interest rates.

There are some lenders who also go in for hiring service agencies who would handle the processing of their payments and the customer services in the secondary market. It is very important that you find out which secondary market does the lender give out his customer service to so that you can assess how is the customer service going to be once the repayment period starts. There are some lenders who would hire a round the clock service provider and these would provide you a complete review of your loan status all around the time. When you select a lender make sure that he has the best customer service provider.

It is obviously the duty of the student loan borrower to keep the payments in time and

not to default on the loan but there are some lenders who put in an extra care and effort so as to help the borrower from defaulting on the loan. Defaulting on the loan means that you have not been paying the payments over duration of two hundred and seventy days. To help the students from defaulting there are some lenders who have special programs designed to help the students while there are some who keep giving reminders to students who are near to defaulting on their loan. It is impossible to predict your financial situation after some time when you would be supposed to pay the loan so it is better that you enroll for a loan with a lender who has special services for defaulting.

It is advised that you do a lot of research on the lenders before you take them into consideration. You can do this by visiting their websites and comparing their offers. Moreover there are many schools that have a list of some of the preferred lenders that the school fees would be good for the students. Besides if you select a lender suggested by the school then your loan processing can be faster as compared to you selecting the lender. Choosing a student loan lender is as important as selecting the school you want to attend. Choosing a lender can be a crucial task besides you should also be careful with the loan that you are taking. Be sure to read the terms and conditions of repayment of the loan. Also make sure that the lender has a debt consolidation program so that in case you take more than one loan from him and you are unable to keep the payments then you can consolidate these loans with him.

No matter whichever lender you select it is advised that you stay with the same lender throughout the duration of the course. If you have all your loans with one lender then repayment becomes easy and later if you wish to consolidate these loans it can be a much easier task.

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