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
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
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