If you need to borrow for college, knowing your credit score can help you determine which loans are best for you!
According to recent blog article by Credit.com, “Undergraduates should generally heed the advice of sticking to federal loans, but parents and graduate students may be able to find a better deal with private lenders. It depends on your specific situation, and you’ll want to carefully compare your options, but if you have a great credit history, you may want to go for private student loans rather than a federal PLUS loan. Here’s why.
People with great credit scores may qualify for private student loan rates much lower than the 7.21% interest rate for PLUS loans disbursed between July 1, 2014 and June 30, 2015. Loan rates are expected to go up annually, as they’re tied to the 10-year Treasury note. The loan origination fee can add a hefty sum to your loan balance, because this year’s fee is 4.292% of the principal, and if you shop around, you might be able to find something less expensive.
On top of that, if you think you’ll be able to repay your loan quickly and you can do so without incurring fees, going for a private, variable-rate loan may keep your costs down. Of course, if you don’t pay the loan off quickly, that strategy can backfire.”
Read the entire article here.