How Not to Get “Ripped Off” by a Lender | 05.10.10
Here is a complaint we hear all the time in our Financial Aid Forums and elsewhere on the site: “I took out a private student loan from Lender X. Now they are trying to steal money from me! I am being ripped off!” The fact of the matter is, it’s not in the best interest of loan companies to “steal money” and “rip off” a customer. Often, the problem between a borrower and lender stems from a simple miscommunication.
Here are some ways to avoid the drama that comes from fighting with a lender:
1. Before you take out a loan, do a little research. Look for online reviews and forum postings detailing experiences with lenders. If there are far more negative reviews than positive reviews, take it with a grain of salt. A large majority of people just go online to complain about things, and very few take the time to tell you how awesome their bank is.
With that said, look for overriding themes about each lender, namely customer service, extra fees, etc.
2. Find the loan that fits you. Taking out a private student loan is a big decision, and you should be very diligent about finding the right one. We recently unveiled a private loan comparison tool that lets you browse from a series of reputable lenders. It’s a bad idea for a consumer to take the first offer, so don’t be afraid to shop around.
3. Use a co-signer. Chances are, you will need a co-signer anyway to take out a private student loan. One of the advantages of a co-signer, aside from their ability to assist you in getting the loan, is that you can share knowledge about the loan.
4. Read the fine print. Pay particular attentions to penalties, fees, deadlines, or any other factors that could affect your interest rate.
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