For the 2013-2014 school year (July 1, 2013 through June 30, 2014) the rates are as follows:

Direct Subsidized Student Loans: 3.86% (undergraduates students)
Direct Unsubsidized Student Loans: 3.86% (undergraduate students)
Direct Unsubsidized Student Loans: 5.41% (graduate or professional students)
Direct PLUS Loans:  6.41% (parents and graduate or professional students)

Direct Subsidized and Unsubsidized Student Loans also have a 1.051% fee that is deducted from the principal amount before being disbursed to the borrower’s school.  The fee for Direct PLUS Loans is 4.204%.

If the economy improves as expected and the government’s cost of capital increases, those costs will be passed on to borrowers in the form of rate increases.  While rates may increase, each type of Direct Student Loan has a set maximum.  For undergraduates borrowing a Direct Subsidized or Unsubsidized Student Loan, the rate cannot exceed 8.25%.  Graduate students borrowing a Direct Unsubsidized Student Loan, the rate will not be greater than 9.5%.  Parent and graduate or professional students borrowing a Direct PLUS Loan have a maximum rate of 10.5%

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Research student loans before you borrow

As the school year winds to a close, we’re sure the last thing on your mind is paying for next year.  The reality is that you will be receiving a bill for next semester in about six weeks.  If you have a funding gap, now is the time to research students loans so you can be prepared when that bill hits your mailbox.  But, where to start?  Here are five handy tips to help you make sense of finding and comparing students loans.

1. Let us help.  Use our site to compare student loans on terms that are easy to understand.
2. Start early.  You still have plenty of time to explore student loan options before your bill arrives.  Use this time to determine how much you need to borrow while keeping in mind you should never borrow more than you actually need.
3. You’ll probably need a co-signer.  According to a report issued by the Consumer Financial Protection Bureau, 90% of private student loans have a co-signer.
4. The interest rate on federal subsidized Stafford loans may be rising from 3.4% to 6.8%.  There is a lot of back and forth in the legislature over this topic.  Know the details when they are made available if you qualify for a subsidized Stafford loan–private student loans may become a more competitive option.
5. When you finally do choose a student loan, be sure to read and understand the terms of your loan.  The average student borrows $26,000 over the course of a four-year education and that’s a significant obligation.  Know and appreciate the responsibility that comes with borrowing to pay for school.  Remember, student loans, unlike other debt, can rarely be discharged in bankruptcy.

Finally, if you don’t know what to do, ask a trusted adviser for help.  One of the best places to find one is in your school’s financial aid office.  Give them a call or drop in and discuss your options.  They’re always happy to lend (get it!) a helping hand!

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Take the time to do your homework before borrowing a private student loan

Now is the time to start researching private loans for students.  Most colleges will be distributing tuition bills for the spring semester in the middle of December. If you need to borrow to help pay for your tuition, take the time now to explore your options and give yourself the time needed to make an informed decision.

Private student loans are intended to fill the gap between what financial aid, federal student loans and your or your parents contribution won’t cover.  Before you consider funding your education with a private student loan, you should exhaust all lower cost borrowing options.  What does that mean?  Generally, federal student loans are less expensive than private student loans and can offer more flexible repayment options.  If your parents wish to borrow on your behalf, for example, they should consider a Plus loan before using a private student loan or even a credit card.  Alternatively, your parents might consider a home equity line of credit from their bank.  Interest rates are exceptionally low now and they may be able to borrow at a rate even lower than that offered by federal student loans.

Here are 5 things to consider when researching private student loans:

1. Low interest rate/APR — private student loans generally require the student to have a creditworthy co-signer.  A well qualified co-signer will result in a lower interest rate
2. Co-signer release — see if the loan program allows your co-signer to be released after you make a number of on-time payments
3. Hardship — check to see how the loan program handles any kinds of hardships you may encounter while repaying your loan.  For example, unemployment during repayment
4. Fees — find our and compare the fees charged to borrow your private student loan.  Most of the time, you will finance these fees but bear in mind they add to the principal amount you borrow
5. Borrow only what you need — besides exhausting federal student loan options, you should do your best to only borrow what you really need.  Be sure to take applying for scholarships seriously.  There are many contests and scholarships with short essays that do not require a lot of effort.  Differentiate yourself by taking a few extra minutes on an easy-to-enter essay contest and you will really stand out.

To compare private student loan options, use our LoanFinder.  Submit a few basic details about yourself and we’ll help you conduct a search of popular programs.

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Everyone’s situation is unique. The best student loans generally have the lowest cost

We’re often asked, “What are the best student loans?” The simplest answer is that the best student loan is the lowest cost student loan. However, it can be tricky to decide which student loans cost less than others. Here are a few tips to get you started:

Federal Student Loans are Usually Cheaper
Your financial aid award letter will let you know what your eligibility is for federal student loans. However, you may still need additional funding to cover your expenses. If your parents plan to make up the difference, they can apply for a Direct PLUS Loan for Parents which is a federal loan they take in their name that can cover up to your cost of attendance minus other financial aid including student loans.

Compare Private Student Loans
If you’ve exhausted other low cost borrowing options such as federal student loans, you can explore private student loan options. Private student loans are made by banks and other lenders based on your and/or your co-signer’s creditworthiness. There are a number of lenders making these specialized loans for students and it’s important to compare the terms of each carefully before making a borrowing decision. You can use our LoanFinder to compare student loans and apply online.

Borrow Only What You Need
It sounds like common sense, doesn’t it? The reality is that it’s tempting to just go through the motions and borrow your entire eligibility. Examine your expenses closely and do your best to borrow only what you truly need to cover your costs. Budget carefully. If you take a smaller loan amount at the beginning of a semsester and need more later, you can always go back to the financial aid office and ask them to increase your loan amount.

Reduce Your Need to Borrow
The less you borrow, the less you will eventually end up repaying overall. Here are a few things you can do to reduce the amount you need to borrow:

• Work. There’s nothing like good old work to reduce your borrowing needs. If work is a part of your financial aid package, find a job on campus and use your earnings to offset your personal expenses. If you don’t have work-study, find a part-time job off campus.
• Apply for Scholarships. Outside scholarships are available for all kinds of students. You don’t have to be a genius or dirt poor to qualify. There are hundreds, if not thousands, of opportunities out there. If you don’t apply, you can’t win. Use a scholarship search that matches you with awards based on your specific background like ScholarshipExperts.com.
• Save on textbooks. Find out what books you’ll need for your classes and shop around for the best deal. Consider renting your textbooks or buying used.
• Save on food costs. Don’t buy the most expensive meal plan if you’ll be dining on campus–you’ll never fully utilize it.
• Be frugal. Make a budget and stick to it. If you can get by without a car, do so. If you can live without a smart phone, consider sticking to a feature phone that doesn’t require an expensive data plan. Think in terms of, “do I really need this?” when it comes to your monthly and spontaneous expenses.

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Choosing a student loan lender can be trying. Answering a few key questions can make the decision much easier.

There are a lot of student loan lenders. Sorting through who’s who can be more difficult than you might think. For example, some banks that offer private student loans only supply the funding for the loans while a third-party structures their program. In other cases, what looks like two different lenders is actually the same lender operating under two different brands. In still other cases what may appear to be a lender is, in reality, a company marketing student loans on behalf of lender partners. In fact, that’s what we do here at eStudentLoan. We’re not a student loan lender. Rather, we market student loans on behalf of our lender and marketing partners.

So, how can you tell who is a lender and who is a marketer? What student loan lender should you choose? Does it matter how you find a student loan?

The good news is that you don’t have to worry too much about the source of your student loan. First, all of the federal student loans you may borrow are made by the Department of Education. For most students, Direct Stafford and Direct Parent PLUS or Direct Direct Grad PLUS loans will represent the largest source of funding. When financial aid, scholarships, work and federal student loans aren’t enough to cover costs, some students may consider private student loans. And, that’s where confusion can come into play.

It’s important to very carefully compare your private student loan options to ensure you get a loan that meets your needs. Factors to consider are:

• How much may I borrow?
• Who will I use for a co-signer (most students need one)?
• Should I go with a variable or fixed rate loan if given the choice?
• How much will I be charged in loan fees?
• How is interest calculated?
• How long will I have to repay?
• Is there a grace period after I graduate in which no payment is required?
• When do I have to begin making payments?
• What happens if I have trouble repaying at some point? Does the lender offer any help like a temporary postponement of repayment (forbearance)?
• Are there any incentives for repaying my loan on-time?
• Can my co-signer be released from their obligation after I make a number of on-time payments?

On top of it all, your co-signer’s and your credit will play a critical role in determining the interest rate for your loan. Most students will require a co-signer in order to get a private student loan and the lender you choose will base the majority of their decision to lend to you and how much they charge in interest on the creditworthiness of your co-signer.

As you can see, there are a lot of questions you need to get answers to in order to do the kind of comparison necessary to make an informed borrowing decision. Don’t be overwhelmed. You’ll learn a lot just by answering those questions.

When it comes to choosing your student loan lender, you actually have a fair number of options. A good place to start your search is by using our LoanFinder. Once you complete our short form, you will be shown side-by-side comparison of some of the top student loan lenders.

The post Student Loan Lenders appeared first on Compare Student Loans and Apply Online for a Student Loan | eStudentLoan.