How Not to Get “Ripped Off” by a Lender | 05.10.10

Posted in Private Student Loans By Student Loan Network Staff

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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19 Responses to “How Not to Get “Ripped Off” by a Lender”

  1. Manny says on March 29, 2011 at 10:26 pm:

    Does anybody knows who oversees that financial institutions do not screw students? I am now paying my student loan, AES just got my loan by the end of Jan. 2011, my prior lender got a direct deposit on Jan 20, 2011 and AES took my account on Jan. 28, 2011. AES still expects a Jan 2011 payment, which does not make sense since I already paid my prior lender. AES took me off the reduced interest rate program because my prior lender returned their the money a month later. How was I suppossed to know, that my prior lender was selling my loan to AES? I learned about it after my prior lender had been paid for the month of Jan 2011. It just does not make sense!

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  2. Julia says on June 9, 2010 at 7:04 pm:

    Awesome ideas!

    Reply To This Comment
  3. Courtney says on June 9, 2010 at 9:37 am:

    good to know

    Reply To This Comment
  4. Marie says on June 4, 2010 at 3:07 pm:

    interesting

    Reply To This Comment
  5. BRITTANY says on June 3, 2010 at 2:16 pm:

    THESE ARE SOME VERY GOOD IDEAS EVEN THOUGH I NEVER THOUGHT OF DOING ANYTHING LIKE THAT

    Reply To This Comment
  6. Jonathan says on May 28, 2010 at 6:09 pm:

    This is a very tough decision to make, because we must consider the time frame to pay the loan, and if at that time we have no money to pay we must re-loan to cover the first loan and so on.

    Reply To This Comment
  7. jasmine says on May 25, 2010 at 9:47 pm:

    Wow this is good to know but alittle frightening

    Reply To This Comment
  8. Guest says on May 19, 2010 at 5:23 pm:

    Read the fine print, always! I definitely learned some useful information from this

    Reply To This Comment
  9. Shafina says on May 19, 2010 at 11:23 am:

    I would not want to borrow. You would never know what would happen. I would suggest that people should try to save up money for college and try out for as many scholarships as possible.

    Reply To This Comment
  10. david says on May 15, 2010 at 2:57 pm:

    pooooints

    Reply To This Comment
  11. peanut says on May 13, 2010 at 12:55 am:

    Borrowing loans is a major decision. I would advise everyone to decide on a major and graduate from college asap to avoid accumulation of debts.

    Reply To This Comment
    • SNemo says on May 13, 2010 at 7:02 pm:

      I agree… taking out a loan is a huge responsibility and like you say… its a major decision. People should always think it through.

      Reply To This Comment
    • potter says on May 14, 2010 at 2:30 pm:

      yea, ive heard or some meny make those kinds of decishions and regreting it later

      Reply To This Comment
  12. Lydia says on May 12, 2010 at 5:58 pm:

    Definitely read the fine print. Mine stated that they can discontinue the contract at any time for any reason. So if they sell out to a different banking/loan company then the new company does not have to honor the contract. Also they can alter interest gradually without notification: ALWAYS read the entirety of the paperwork. If you don't understand you should ask someone.

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  13. johnique Mitchell says on May 12, 2010 at 2:36 am:

    i wish there were more informative things out their for a freshman in college about loans.

    Reply To This Comment
  14. Patricia says on May 12, 2010 at 1:00 am:

    Yea you dont have to borrow if you get enough scholarships.

    Reply To This Comment
  15. ashleigh says on May 11, 2010 at 5:00 pm:

    this is scary.! ill keep my interest in federal scholarships and grants

    Reply To This Comment
  16. Korin says on May 11, 2010 at 4:24 pm:

    I think everyone is afraid to borrow because you are letting someone else play with your money. I have never had this happened just like the person above.

    Reply To This Comment
  17. Betty says on May 11, 2010 at 2:12 am:

    This really shocks me. I've not had to borrow from a private lender Praise God,
    I've just received Stafford Loans but I do feel sorry anyone who has been ripped off. If so, I think I would get legal advise if needed.
    But 1st do as this article states – check 'em out!!

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