How to Borrow Private Student Loans Smarter
When you’ve maxed out scholarships, institutional grants, and federal student aid, private student loans are usually the next stop when looking for money for college. If that sounds scary, know that it doesn’t have to be.
No matter which stage of higher education you’re in, there are multiple private student loan programs and options, so the key is learning about those options and choosing what fits best with your needs and goals. And – as with any service provider you choose – the lender you select has a big impact on how successful and simple your experience is. You’ll also want to figure out how much you can safely borrow in order to achieve your educational and financial goals.
Understand Private Student Loan Options
Don’t wait to apply for student loans, and then take the first offer that comes your way. There are several options you’ll want to consider, and the loan you choose can have long-ranging impact. Here are some of the most important things to consider when choosing a private student loan.
- Shop around for interest rates based on your situation. Advertised loan rates may not apply to you, and origination fees may not be widely communicated. You should make sure to ask your lender about any fees associated with the loan or loan application.
- Rates are often better with a qualified cosigner (the vast majority of in-school loans have a cosigner) if you don’t have established credit. If applying with a cosigner, see what rates you and your cosigner may qualify for.
- Choose a fixed or variable interest rate based on your ability to adjust to changes in your payment amount over time.
- Look for borrower benefits like these:
- A grace period after you finish your degree (Nelnet Bank offers a six-month grace period during which you don’t have to make payments – but you can make payments if you wish)
- An interest rate reduction for setting up automatic payments (Nelnet Bank offers a .25% interest rate reduction if signed up with auto debit)
- For eligible borrowers, the release of your cosigner after a certain number of consecutive, on-time monthly payments; Nelnet Bank releases cosigners after 24 months of consecutive, on-time payments.
Look for Flexible Repayment Options
Flexible repayment options can save you money over the life of your student loan. Nelnet Bank offers repayment options like these:
| Repayment Option | Repayment Description |
|---|---|
| Immediate repayment | Allows you to make full principal and interest payments as soon as the loan is disbursed, saving you money over the long run |
| Interest-only repayment | Allows you to make payments that cover the accrued interest while you’re in school to minimize the amount of interest and total amount you pay over the life of your loan |
| Deferring principal and interest payments | Allows deferment until after you graduate; depending on your situation, you may be able to defer payments up to 120 months plus the six-month grace period |
| Flexible repayment terms from 5-15 years | Allows you to find the right payment amount and overall amount paid to fit with your budget and your life situation |
Choose a Trusted Lender
- Knowledgeable, experienced and trustworthy – Nelnet Bank is backed by the nation’s largest student loan servicer, with 20+ years of experience.
- Real people providing expert support – Our expert team helps you find a student loan that fits your needs – and learn how to manage your money for financial wellness.
Figure Out How Much to Borrow
Look ahead at what your expected situation (income, expenses, etc.) will be, post-graduation. Make sure you have a little bit in savings for emergencies so that you don’t find yourself needing to take on an unwanted, extra job while in school, which can make it tough to finish your degree on time. Need help finding that balance? Nelnet Bank’s experts are here to help answer questions, too.
Nelnet Bank does not provide legal, investment, tax, or financial advice. This page and the information contained herein is for informational purposes only. This content is not meant to address the circumstances of any particular individual. Nothing contained in this article constitutes a recommendation or endorsement by Nelnet Bank. For specific advice about your unique circumstances, consult with a qualified professional.
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