Choosing a Lender
Federal Loans
Fixed interest rate
The rate is fixed and is often lower than the rate on a private loan.
Private Loans
Fixed or variable rate
Rates can be fixed or variable, and may be higher or lower than federal rates depending on your situation.
Tips for Choosing a Lender
If you decide to borrow a private loan, compare lenders before you choose. Here are the top 10 things to ask about.
1
Fixed or variable interest rate?
A fixed rate stays the same. A variable rate can rise or fall, so your payment can change.
2
Are there any fees?
Some loans add fees to borrow or to pay late. Fees raise what you owe.
3
A better rate with a cosigner?
A cosigner with strong credit can lower your rate, which lowers what you pay over time.
4
Is there a cosigner release?
Some lenders let your cosigner off the loan later, which protects the person who helped you.
5
Can I reach a live person easily?
Check that you can reach a real rep at hours that work for you if something goes wrong.
6
What is their Better Business Bureau rating?
The BBB rates how a company treats customers. A good rating is a sign of a reliable lender.
7
When do payments start?
Some loans wait until after you finish school. Others want payments while you are still enrolled.
8
What are the repayment plans?
Plans set how long you pay and how big each payment is. Pick one that fits your budget.
9
What if I have trouble paying?
Ask what help exists if money gets tight. Some lenders can pause or lower payments for a while.
10
Is there an early-payoff penalty?
A few lenders charge you for paying off early. No penalty means you can pay it down faster and save.
Credit Check
You and your cosigner must meet the lender's credit rules. Lenders may look at things like your credit history and your debt compared to your income. You can get a free copy of your credit report each year from AnnualCreditReport.com.
Satisfactory Academic Progress (SAP)
Some private lenders require you to meet Satisfactory Academic Progress (SAP) standards to qualify. SAP helps make sure you stay on track to graduate. If you do not meet the standards, you may not be eligible for your private loan.
2025-2026 SAP Policy
See the full standards and how progress is measured.