4 Tips for Choosing a Student Loan

Image of Bill Partin Sharonview CEO
by Bill Partin
Sharonview Federal Credit Union

September 2017

It’s that time again! The semester just started and you’ve got a full semester of courses and textbooks that need to be paid. Like most college students, your bank account isn’t ready for it. A loan is one of the easier ways to acquire the money you need fast. Before you sign on the dotted line, consider these four tips for choosing student loans.

1. Compare Offers

If you’ve decided a loan is the right choice for your educational path, ensure you research your loans thoroughly. Don’t pick one and apply. Browse the web, your bank or credit union’s website, or talk to a financial advisor and get an idea of the different loans for which you’re eligible. Compare payment plans, interest rates and loan types, and track the information in a notebook or online document to better visualize the different options.

Picture of cash with graduation cap

2. Read the Fine Print

A website will highlight the appealing features of a loan, but the information that matters is in the small print. Always read the entire offer before committing to a loan. Bring a trusted parent, guardian or partner to review it with you and ensure it’s the right loan for you. Some banks or credit unions, such as Sharonview Federal Credit Union, offer free financial coaching to guide you through the requirements of a loan. Take advantage of those services and talk to an advisor before signing off on a loan.

3. Verify and Verify Again

A loan is a legal agreement. Any mistakes such as missed payments, a misunderstood interest rate or an unachievable payment plan can accrue extra costs that could end up costing more than the loan itself. Don’t hesitate to ask questions about the loan. Ask the same question in multiple ways to ensure a consistent answer. If possible, ask through email, so you can refer back to the lender’s answers if legal problems occur. Ultimately, it’s your money that’s on the line, so verify everything.

4. Cut Unnecessary Costs

Finally, keep yourself in a strong financial position and budget to allow more saving. Living with a roommate, setting a monthly food purchase limit and getting a job are a few ways to reduce the amount of money spent leaving your wallet and increase the amount going into your savings. When you leave college, you’ll have the ability to pay off the loan knowing you have money in the bank.

A loan is a big decision. Treat it as one. Do your research and seek counsel from family, friends or a financial advisor. It’s important to partner with a reliable organization like Sharonview Federal Credit Union when taking out a student loan. Signing a loan is a long-term agreement, so only sign a loan from a trusted source. Make sure the loan best compliments your financial situation, while still helping you prepare for whatever the future may hold.

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