The Tremendous Value of Private Student Loan Prequalification

Prequalification

The Tremendous Value of Private Student Loan Prequalification

Published May 24, 2018 | Last Updated March 31st, 2024 at 12:50 pm

Prequalification

Are you able to do a prequalification for your private student loans?

If you aren’t sure – or the answer is no – you may want to look for another lender. Prequalification is enormously valuable, and if you don’t take advantage of the process you’re definitely missing out.

Here’s what you need to know about prequalification and how to find lenders that offer it!

What is Private Loan Prequalification?

While a federal loan is offered through the government, a private student loan is offered through individual banks and credit unions. With a federal loan, everyone gets the same interest rate. But with a private loan, the interest rates vary depending on your credit and other factors.

Prequalification gives you a chance to move beyond the printed interest rate ranges offered by lenders. The lenders will do a soft credit hit – which does not impact your credit – and ask a few other questions to determine a more specific credit result for you and your student.

Once you answer the questions, the lender will be able to give you additional specific information. These details may include:

  • A more specific interest rate or range for your situation
  • An estimated loan amount you will be approved for
  • Any fees that may be included
  • The estimated payments you could owe depending on the loan terms you choose

Don’t Worry – Research!

Once the college admission process is complete, you have a waiting time before you get your student’s final financial numbers. Students are choosing classes, making housing choices, and determining meal plans.

What do you do during those months? Don’t worry – research!

You don’t want to apply for private loans or parent PLUS loans until you receive the final financial bill from the school. After all, many lenders limit you to the actual cost of attendance, and you don’t know that amount right now.

Instead, look for options. Start by comparing private lenders based on key factors: interest rates, prequalification options, cosigner release, and hardship release options.

Then, take advantage of prequalification to compare your top lenders to each other. You’ll get much more specific information, and you’ll have your private loan options narrowed way down by the time you need to actually apply.

Not all lenders have prequalification as an option. But for those that do, you have a lot of additional information at your fingertips and ready to go when the application time arrives.

LenderCo-Signer ReleaseRepayment OptionsTermInterest Rates
Yes- Flat Payment (In-School)
- Full (principal & interest)
- Deferred
- Interest-only
5, 8, 10, 15 years4.39% - 16.49% (Fixed)
5.59% - 16.85% (Variable)
Check Rate
Yes- Deferred
- $25 Minimum Amount
- In-School Interest Only
5, 7, 10, 12, 15 years4.29% - 15.76% (Fixed)
6.24% - 15.85% (Variable)
Check Rate
Red circle with sallie mae written in the center Yes- Pay now or later: Make interest payments
- Pay a fixed $25 payment
- Defer payments until after school
-Undergraduate loan rates displayed. Lower interest rates shown include the auto debit discount.
10-15 years4.50% - 15.49% (Fixed)
6.37% - 16.70% (Variable)
Check Rate
SofiYes- Immediate repayment
- Interest-only
- Fixed monthly payments in school
- Fully deferred
5, 7, 10, 15 years4.44% – 14.30% (Fixed)
5.99% – 14.30% (Variable)
Check Rate
Yes- Full payments (Principal and Interest)5, 10, 15 yearsAs low as 4.39% (Fixed)
As low as 6.07% (Variable)
Check Rate
- Deferred
- $25 Minimum Amount
- In-School Interest Only
5, 7, 10, 12, 15 years9.16% - 15.11% (Fixed)
9.27% - 15.20% (Variable)
Check Rate

Research Makes Private Loans Easier

It’s important to know everything you can about private loan options before it’s time to apply. Prequalification is a tremendously valuable tool that will let you know what you’re likely to receive in your specific situation.

There’s no need to complete a long application process if you can find out information without it! Keep an eye out for prequalification options and take full advantage of them.

To help parents and students make informed decisions about student loan costs, we developed the Road2College Student Loan Comparison Spreadsheet. Download it for free here.

 

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