<p>I'm in my third year at Northeastern University, and the time has come for me to start taking out loans to pay for my education. The only loan that I've taken out in my name has been my (unsubsidized) Stafford loan. My parents have taken out PLUS loans in their name.</p>
<p>For the spring semester, I need a $5,000 loan. I barely even know where to start with this. Northeastern's Financial Aid website has a list of lenders often used by students. So now I'm looking at over a dozen websites and barely understand the differences between them all. I know I'm going to have to defer payments until after graduation and whatnot, and I obviously want a low (fixed??) interest rate. I should note that my parents will co-sign the loan.</p>
<p>There are just so many options, and the ranges of interest rates I see are so wide. </p>
<p>Sadly, I suspect you have a trudge ahead of you. I would be a bit skeptical of the “list of lenders often used by students” because there has been a history of some banks providing university officials with donations/trips/other goodies to be the “featured bank”. </p>
<p>So, if it were my kid, the first stop would be the neighborhood credit union. These tend to be open to most residents and are the banking equivalent of a low profit shop (they exist to serve the members). Start a data base and start filling in the APR (annual percentage rate) and total payment costs (say a $5000 loan has a total loan cost of $6000 – well that would not be as good as a loan that had a total repay cost of $5,600). </p>
<p>After seeing what the credit union offers, the next thing is to start visiting bank websites (ok, go ahead and use the college’s lists for a few). </p>
<p>This is like buying a car or a washing machine. Do you shop at “Low, low Louie’s” ? or “Mighty Max Delivers for Free”?. </p>
<p>You’ll want to compare APR, total repayment costs and see what the repayment schedule is (six months after degree completion? one year? one month?). Ask/read about penalties and deferment details (but really, really work NOT to defer). </p>
<p>Slog, slog, slog. I am going to hope you’ll do two credit unions and two banks and see that the credit union is obviously better and go from there (at least that’s the case in my area – do your own research to confirm).</p>
<p>I would be a bit skeptical of the “list of lenders often used by students” because there has been a history of some banks providing university officials with donations/trips/other goodies to be the “featured bank”. </p>
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<p>Thanks to the Truth in Lending Act, this is not the case. I was involved in the process of developing a school list recently, and there are many hoops to jump through in making sure it is not as you describe. Lenders do NOT give any goodies to any schools anymore. This practice went by the wayside several years ago.</p>
<p>No, you cannot get private loans through the federal government. The Stafford loans are all directly through the government now, but not other student loans.</p>
<p>Have you borrowed the full $7500 in Stafford? Make sure you maximize Stafford loans before turning to private loans. If you must borrow a private loan, you can contact the lenders on your school’s list, your own credit union/bank, and lenders you find at [FinAid</a>! Financial Aid, College Scholarships and Student Loans](<a href=“http://www.finaid.org%5DFinAid”>http://www.finaid.org). Compare carefully. If all else is the same, I would personally favor a credit union loan, as credit unions exist to assist their members.</p>