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Ten Questions to Ask your Prospective Lender

Ask prospective lenders these questions to help ensure you make the best choice:

  1. Interest Rate
    How much is it? Fixed or variable? When does interest capitalize and how often?

  2. Loan Amount
    Is there a maximum? Can I borrow more than the cost of my education? Can I use the loan to pay off a prior year's balance owed to my school?

  3. Co-signers
    Is a cosigner required? Is there a co-signer release process? Will having a co-signer lower the interest rate?

  4. Fees
    Is there an application fee? Are there any disbursement fees? Are there any repayment fees?

  5. Disbursement
    Is the loan check payable to me or the school? How long does it take to receive the funds?

  6. Borrower Benefits
    Are there interest rate reductions that reward me for on-time payments or other actions?

  7. Repayment
    What will my minimum payment be? When does payment begin? How long is the repayment period? Is there a prepayment penalty?

  8. Billing
    Will I get one bill for all of my private loans? Can private loan bills be combined with federal loan bills?

  9. Customer Service
    Whom do I call with questions about the application? Is that the number I'll call once I'm making payments?

  10. Deferments
    Will payments be deferred while I'm in school? If so, will interest continue to accrue?