If you are looking for the best method possible for how to pay your student loans, there are a plethora of Student Loan Comparison Tools out there for you to choose and decide from.
Since 2006, Student Loan Debt in the United States of America has grown rapidly. According to an article by Forbes that was published in February 2020, that student loan debt in the year 2020 is now about $1.56 trillion. The same article also revealed that: “There are 45 million borrowers who collectively owe nearly $1.6 trillion in student loan debt in the U.S. Student loan debt is now the second-highest consumer debt category – behind only mortgage debt – and higher than both credit cards and auto loans.”
Furthermore, the Forbes Magazine Article also noted that states with bigger populations have higher aggregate student loan debt. From highest to lowest, the four highest states for total student loan debt outstanding among resident borrowers are California, Texas, Florida, and New York.
With those statistics that I listed above in mind, those who are considering to apply for student loans to pay off their college tuition, need to be aware of the Student Loan Comparison Tools that they should look at before making any kind of decision.
This article will not only include Student Loan Comparison Tools, but also key terms related to Student Loans and Student Loan Comparison Tools that you should understand to make the best decision possible.
Now, with all of that information and facts being said, listed down below are 10 Student Loan Comparison Tools You Need RN:
1. Key Terms Related To Student Loans That You Need To/Must Understand:
As I stated earlier, there are several key terms related to both Student Loans and Student Comparison Loan Tools that you really need to understand before you make any decisions related on how to pay for college. There are many different types of student loans to choose from.
For college students, they must familiarize themselves with both the language used by the industry, as well as having a complete understanding of the various options available to select from. Four terms related to Student Loan Comparison Tools that you should definitely have a full grasp of are Private Loans, Federal Loans, Fixed-Rate Interest, and Variable Rate Interest. I plan on giving a more in-depth explanation of each of these terms in Sections 2-5 below.
2. Private Loans:
Private Loans are ones that arise from the banks and credit unions. When compared to the other types of Student Loans, Private Loans tend to offer a variety of interest rates, fees, and other borrower terms. In addition, they usually have higher borrowing limits than federal loans (see #3 below).
With Private Loans, it is important to note that students, most of the time, are the main borrowers of these kinds of loans. As a result, those who opt to go with private loans will need a credit-worthy co-signer, (experts recommend a relative, parent, and/or friend) to guarantee that they will get approved for this loan.
Of all the Student Loan Comparison Tools, a private loan is the best tool for students to use if they are not eligible to receive federal aid (see Section #3 below for the reasons why some students aren’t eligible) or don’t cover their full financial needs for paying college tuition.
3. Federal Loans:
Federal Loans are ones that come from The U.S. Department of Education. When it comes to understanding all the terminology related to Student Loan Comparison Tools, it is important to note that Federal Loans will probably not cover the full financial needs of the student.
According to Simple Tuition, some of the reasons why some student will probably not be eligible to receive federal loans are because they are not U.S. citizens, are in default on a federal student loan, don’t maintain satisfactory academic progress in college, and/or are convicted of a drug offense.
Most of the time, Federal Loans are fixed and have low-interest rates. For anyone who wants to receive financial aid for college in the form of Federal Loans, they must fill out and complete the Free Application for Federal Student Aid (better known as the FAFSA).
4. Fixed-Rate Interest:
Fixed-Rate Interest refers to the amount of interest charged which does not alter over the life of the loan.
5. Variable-Rate Interest:
Variable-Rate Interest are Interest Rates that are tied to the market. The aspect that makes Variable-Rate Interest differ from Fixed-Rate Interest is that Variable-Rate Interest can shift and alter
6. Student Loan Term Comparison Calculator:
While writing this article, one of the best Student Loan Comparison Tools that I came across was this Student Loan Term Comparison Calculator from Student Loan Hero. When looking at all of the Student Loan Comparison Tools, what makes this one stand out is that it enables you to calculate and compare a variety of student loan options with varying interest rates and terms. When comparing these student loans, one will be able to see the total costs that come with each of type of student loan. The chart below shows all of the payment information associated with a loan of $35,000.
7. Repayment Plans:
When it comes to Federal Education Loans, another one of the Student Loan Comparison Tools to understand is the variety of Repayment Plans that you can select from. These different types of repayment plans include Standard Repayment, Extended Repayment, Graduated Repayment, and Income-Contigent Repayment, to name a few options. For a more thorough explanation of each of these options, click on this link here.
8. Parent Loan Advisor:
Of all the Student Loan Comparison Tools, what makes the Parent Loan Advisor stand out is that it allows one’s parents to help their children stay on top of their payments for student loans. The Parent Loan Advisor Tool offers parents an estimate of the amount of educational debt they can afford for their children’s college education. The numbers related to the educational debt are based on parents’ job salaries and other debt obligations.
When looking at all of these Student Loan Comparison Tools, one of the best apps to consider using for Private Student Loans is Credible, a transparent marketplace that enables students to receive and compare personalized offers from lenders (all of them are thoroughly vetted) in a matter of minutes! With Credible, looking over your personalized offers will not affect your credit score.
10. Student Loan Refinance:
As Magnify Money reports, “Refinancing student loans to a lower interest rate can help you save thousands of dollars.” However, be aware that if you have federal loans, refinancing to private loans can result in losing protections such as special repayment plans that can help you whenever you are in times of need.
If you opt to refinance your student loans, also make sure you can afford your new payments. Student Loan Comparison Tools To Use when refinancing your student loans include SoFi, Earnest, CommonBond, and LendKey, to name a few options.
Which of these Student Loan Comparison Tools do you plan on using? Let us know which ones down below in the comments section below!
Featured Image Source: https://www.sofi.com/learn/content/grads-guide-smart-student-loan-repayment-strategy/
I am currently a senior at The University of Miami. I will graduate in December 2021 with a major in Journalism and minor in Sports Administration.