Most families can’t afford to send a student to college without taking on some kind of debt. Once you have found all of the free money for college you can, it is time to take out a federal or perhaps even a private loan. Here are some of the things to consider so that you don’t get in over your head.
- Interest Rates – Federal loans are always going to have a better rate than a private loan from a bank. Find out if the interest rate is fixed or variable. If the rate is variable, you may suddenly find that you are suddenly paying a lot more a few years from now if interest rates rise.
- Additional Fees – Sometimes, a loan can have upfront fees, a balloon payment at the end, a fee for paying it off early, late payment fees, and the like. Make sure you understand what fees apply to your loan.
- Term – The longer the loan, the less you pay per month. However, you will also end up paying more interest in the long run and having the debt hanging over you longer.
- Payments – Between the amount you borrow, the interest rate, and the length of the term, you need to strike a balance that makes the monthly payments manageable.
- Cosigners – Since you are going to be a full-time student, most private loans will require someone to cosign for you.
Start Your College Planning Journey Today
College Planning Source is here to help your family fund college the smart way. Contact us today to schedule a free assessment. You can call 858.676.0700 or request your complimentary college planning assessment online.
