Student loans: How to compare

Student loans are NOT created equal. Before you borrow, do your homework.

There are many student loan options available, with each lender shouting out rates and benefits. But what does it all mean, and how do you really know which loan is better than the next? We want to help you understand how to compare so that you can borrow more confidently.

Spending some time comparing student loans before you borrow can save you money in the long run. So it's worth putting in a few minutes now to make a good choice about a loan that may be with you for 10 or 15 years. Our goal: To help you minimize your cost of borrowing, reducing the total amount you'll ultimately have to repay.

 

Interest rates matter. Here's why.

A lower interest rate is generally a good thing, but how much does it matter in real dollars—both the amount you’ll pay per month and the total over the entire term of your loan?

You may be surprised. Here’s an example that shows the different amounts you could expect to pay monthly and in total, based on 3 possible rates. Roll over all of the ? to read the explanations and get some tips.

VARIABLE VS. FIXED

Fixed interest rates stay the same over the life of the loan. Variable interest rates change with the financial markets (which means they can go up!). Variable rates can start low, then rise and end up costing a lot more over the life of the loan. That's why VSAC offers only fixed-rate loans. We believe they are the safest option for borrowers.

BEWARE OF TEASER RATES

“Teaser rates” are the low advertised rates that few borrowers actually qualify for, and may include shorter repayment terms of 5 years. If you get an interest rate higher than you expected, stop (or pause) the application process and compare your other loan options.

 

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 may find in the college loan marketplace today. These rates do not reflect the offerings of a particular lender.

Examples: A $15,000 loan with no fees and a 15-year repayment

Scenario 1:

5%

Monthly Payment:

$120

Interest over 15 Years:

$6,402

Total Paid:

$21,559

Scenario 2:

7%

Monthly Payment:

$137

Interest over 15 Years:

$9,370

Total Paid:

$24,590

Scenario 3:

9%

Monthly Payment:

$156

Interest over 15 Years:

$12,412

Total Paid:

$27,694

Interest rates matter! Based on these three scenarios, total loan costs differ from $3,031–$6,135.

Monthly payments differ from $17–$36 per month. Even $17/month can add up to more than $200/year.

Compare VSAC’s student loan and parent loan rates.

Our rates for academic year 2019-2020 are lower than the federal PLUS and competitive with other lenders. Your interest rate is based on the repayment plan you choose and the origination fee is based on credit. 

APPLY NOW THROUGH SECURE MYVSAC

BEGIN YOUR COMPARISON

VSAC student loans for undergraduate and graduate education offer a fixed interest rate as low as 4.79% APR--lower than the federal PLUS. Get the details and begin your application.

VSAC Student Loans

Immediate Repayment

"Immediate" means you start principal & interest payments 15-45 days after loan is fully disbursed.

Interest-Only Repayment

"Interest-only" means you start monthly interest payments 15-45 days after loan is fully disbursed.

Deferred Repayment

"Deferred" means you begin repayment 15-45 days after enrollment ends.

4.79%

5.89%

6.90%

APR 4.79%5.51%

APR 5.89%6.47%

APR 6.65%7.15%

Compare Details
VSAC Student Loans for Parents

Immediate Repayment

"Immediate" means you start principal & interest payments 15-45 days after loan is fully disbursed.

4.79%

APR 4.79%5.51%

Delayed Repayment

"Delayed" means you begin repayment 12 months after loan is fully disbursed.

6.70%

APR 6.66%7.33%

Compare Details

Consider Repayment Options

WANT TO SAVE MONEY IN REPAYMENT?

Can you pay more than the amount due? Adding a little extra to each on-time monthly payment can reduce the total amount you'll pay over the life of the loan.

Consider repayment options

Minimize Debt Before Borrowing

Follow these tips to keep your education debt as low as possible:

  1. Take advantage of free aid first. Apply for all available grants and scholarships. This “gift aid” doesn’t have to be paid back.
  2. Use savings and current income. Explore tuition payment plans, which spread payments out over the academic year.
  3. Cut expenses. How much can you economize while in school? 
  4. Estimate your future monthly payments with the College Board’s loan payment calculator. Ideally, student loan payments should consume no more than 15% of your income after college graduation. The interest rate and the repayment plan you choose will impact your total cost of borrowing. And remember, you may need to borrow for 4 years of school. Consider the entire amount you'll be responsible for when you finish your education.

BORROW ONLY WHAT YOU NEED

Your goal should be to minimize loans as much as possible. You can choose to decline a loan or borrow less than the offer, reducing what you’ll need to pay back.

minimizing debt