How do I Choose the Best Student Loan Program?

There are many factors to consider when you’re trying to choose the best student loan program. You may consider the rates and terms of a loan program to make sure you’re getting terms you can live with and rates that will keep the overall loan cost as low as possible. You may also prefer a loan program that allows you to defer payments. For example, you may prefer a loan that does not have to be repaid during summers off from school and for several months after you graduate from college. Additionally, you may compare programs based on whether or not they require a credit check or allow you to suspend payments during times of hardship.

In some places, there are both subsidized and unsubsidized student loan programs. Subsidized student loan programs frequently offer the lowest rates and best terms, but they are usually based on financial need. Unsubsidized loans are usually not need-based but offer low interest rates as well. You are usually expected to make interest payments on unsubsidized student loans while you're still in school, but subsidized loan interest only accrues once you've left school. As such, you may find subsidized student loan programs a better option.

Another consideration as you work to choose the best student loan program is when you will have to repay the student loan. There are many student loan programs that don’t require principal payments while a student is in school and even during summer vacations. Some loan programs also allow students to wait until they’ve been out of school for six months to begin making payments. If you choose one of these programs, this six-month period may allow you enough time to find a job. Additionally, you may find that the best student loan program is one that allows you to put off making loan payments if you experience some sort of hardship, such as a serious illness or loss of employment.

You may also consider credit check requirements when you are attempting to choose the best student loan program. In many cases, a government-sponsored student program will not require a credit check as part of the application process. There are some student loan options that do require credit checks, however, including private loan programs. You may need a cosigner if your credit, or your parent’s credit, doesn’t meet the lender's criteria. As such, you may think it best to pursue loans through a government student loan program and save private loans as a last resort.