Your federal loan(s) could be forgiven! Don’t miss the 12/31/23 deadline! Learn More
Your federal loan(s) could be forgiven! Don’t miss the 12/31/23 deadline! Learn More
Having options can make things unclear at times. With so many student loan options, and each lender offering different rates and benefits while claiming to be your best option, how can you easily make a choice?
Although VSAC loans are for students going to a Vermont college and Vermont residents (in or out of state college attendees), our loan philosophy is universal: only borrow what you need.
Loan shopping can also be confusing if you don’t understand these four key terms:
Fixed vs Variable Rate
Repayment option
Loan Term
Co-signer
If these terms sound unfamiliar, how can you choose the best option for your financial plan?
Whether you shop for a VSAC loan or another lender, we want you to become a confident borrower as you shop around. The choices you make today will determine the full cost of your higher education experience. Keep reading. We’ll answer the top questions every borrower should ask before signing a loan.
To skip ahead, use the navigation to the left.
A lower fixed interest rate is a good thing, but how much does a difference in rate matter in real dollars—both the amount you’ll pay per month and the total over the entire term of your loan?
*Many lenders only offer limited information about their actual rates upfront. They don't provide complete rate details within the range of rates depicted in this chart.
The specific rate an applicant is offered will be determined by the loan type, repayment options selected and, if applicable, the cosigner's credit.
Annual percentage rates (APRs) were retrieved from the lenders' websites on October 18, 2023, for fixed-rate loans for student borrowers while the student is enrolled at least half time. The ranges contain rates offered to applicants with a wide range of credit scores and for a variety of repayment options and terms.
The loan rates lenders offer can change at any time.
It's worth the time.
A lower fixed interest rate is a good thing, but how much does a difference in rate matter in real dollars—both the amount you’ll pay per month and the total over the entire term of your loan?
Think a few percentage points won't matter? Think again. Here’s an example that shows the different amounts you could expect to pay monthly and in total, based on 3 possible hypothetical rates.
Explanation: This comparison example is based on a loan amount of $15,000, with no fees, paid over 15 years. The rates featured are three possible fixed interest rates you might find in the college loan marketplace today. These rates do not reflect the offerings of a particular lender.
The lower the interest rate, the less you'll pay in interest over the life of the loan. Below are 4 examples of rates you may receive.
The lower the interest rate, the less you'll pay in interest over the life of the loan. Below are 4 examples of rates and the monthly payment for an immediate repayment student loan.
The amount you spend determines how much you’ll have to pay back. Loans should be the last stop in financial planning after you’ve received grants, scholarships, and federal aid and checked savings. To decide your loan amount, use this formula:
1. Add up your cost of attendance.
Your cost of attendance (COA) includes tuition and fees, room and board, transportation, books, and personal items throughout the year. It’s easier to plan for the school year instead of a single semester, because you should expect your COA to be the same.
2. Subtract your total in grants and scholarships.
These are gift aid—funds you don’t have to repay. If you’ve been offered work–study (money you can earn by working at a campus job), you may also be able to subtract those dollars from your costs, depending on how your school handles those offers.
3. Look into savings.
If you have savings, consider how much you can use to pay for college. Even $500 of your own money becomes $500 less you have to pay back with added interest. All VSAC Student Loans require a cosigner, so consider asking your cosigner and family and friends if they’re able to offer some additional money to keep the costs of your loan low.
4. Do the math.
If you still have a balance due after the first three steps, it’s time to look at loans. Remember that federal student loans should be your first choice because they offer flexible repayment options like Income-Based Repayment. Because there are loan limits for each academic year that you are in school, you may still need additional loan funds. Once you’ve exhausted all your free aid and federal student loan options, compare federal parent loans and private lenders like VSAC.
1. Interest rates—A lower rate saves you money.
2. Fees
3. Repayment options—find out:
4. Do you need a cosigner?
Most student loan lenders require a cosigner. Choosing a cosigner with great credit will ensure that you get the best possible rate while you build your own credit. If a lender asks for a cosigner, ask these questions:
5. Payment responsibility & cancellation
You might believe that if you shop around for loans, every inquiry into your credit will have a negative impact on your credit score. Not so.
In general, the credit bureaus expect borrowers to “rate shop,” so if credit bureaus see multiple inquiries for a similar loan type within a certain timeframe (30 days is a good rule of thumb, though this can vary), they consider the activity to be a single inquiry against your credit score.
So, if you’re not offered loan terms (rates & fees, for example) that you expected when you applied for a particular loan, stop your application and shop around.