Geneva College

 
Comparing Loans

Private Educational Loans and Direct PLUS Loans should be considered as a last resort, but may be necessary to finance a college education. To learn more about these options, please review the comparison chart and the suggestions below.

Private v. Direct PLUS Loan Comparison Chart

Should I Borrow a Private Loan or Federal Loan?

Regardless of which option you choose, please follow these guidelines:

  • Apply early! Loans can take several weeks to process and disburse. (If you need assistance estimating your account balance, just let us know.)
  • Apply for the amount you’ll need for the entire year! This will ensure that you are credit approved for the full year and don’t need to worry about a future credit check. (The loan will generally disburse in two equal disbursements for Fall and Spring but we can always reduce or cancel part of the loan at a later date.)
  • Work on improving your credit history (student, parent, and/or co-signer). The suggestions at www.myfico.com may be helpful. The better your credit score, the lower your interest rate will be.
  • Consider making payments while the student is enrolled, rather than deferring payment. Choosing to make payment while in school will:
    • Help establish the student’s credit history earlier (on private loans)
    • Avoid interest capitalization
    • Get a lower interest rate from most lenders (on private loans)
    • Take advantage of any auto-debit discounts immediately, if offered by lender (on private loans)

To choose the best loan option for your family, there are several things to consider:

  • Who do you want to be the borrower?
  • Do you have a creditworthy co-signer?
  • Do you or your parents have good credit?
  • What is the total cost of repayment?
  • How will the student loan fit into your overall financial picture?
  • Does the loan come with forgiveness benefits for death or disability?
  • Does the loan offer a co-signer release option?

When comparing the cost of student loans, be sure to ask:

  • What is the interest rate? Is it variable or fixed?
  • Are there any loan fees?
  • Are there any loan discounts? (for auto debit or graduation)
  • What will the monthly payment be upon graduation?
  • What is the repayment term? What if I experience economic hardship?

The calculators at www.finaid.org may also help you compare the cost of Private and Direct PLUS Loans. If you have good credit history, a private loan may cost less than a federal student loan- be sure to consider all of your options and compare carefully!

 

For helpful loan repayment calculators and other helpful resources, visit:

www.geneva.edu/object/financial_literacy.


http://www.geneva.edu/object/finaid_comparing_loans.html

Geneva College | 3200 College Ave., Beaver Falls, PA 15010