Know Before You Borrow – Tips for Getting a Student Loan

Heading back to school and looking to finance it? Of course, you should always go with the Federal-option first. But sometimes you need more. Here we discuss the private student loans… how to prepare for the loan process, compare your options, and develop a plan for repaying the loan.

Prepare for the Loan Process

Develop a budget.

Look at your entire college career – how much will you need.

·????????Overestimate expenses to allow for inflation and the inevitable surprise costs.

·????????Identify your income, including jobs, family assistance, Federal Student Loans, grants, scholarships, etc. Underestimate anticipated income in the event of an unexpected situation that may affect it.

·????????If your budget is more than your income, you need to consider a private student loan. Don’t overborrow. While these loans are more flexible in how they are used, you don’t want to have debt you cannot afford when you graduate.

Review your credit report.

·????????Credit will play a big role in the interest rate on your student loan. The better your credit, the lower the rate. If you have time, find ways to improve your credit score (a Texas Bay Financial Service Representative can help).

·????????If your credit is poor, consider asking a parent or other responsible adult to co-sign. This will help you qualify for more desirable rates. But beware, their credit will suffer if you do not make your payments as agreed.

Compare Your Options

Private student loans are available from a variety of places, like banks, credit unions, or online lenders. Some of the benefits of going the private route are faster application and processing time, competitive rates, and higher borrowing limits. Compare:

·????????Rates

·????????Payment terms

·????????Application or origination fees

·????????Early repayment fees

·????????Ability to add a cosigner if needed

·????????Is a cosigner required

·????????Any benefits offered, such as an interest rate deduction for graduating or setting up auto-pay

·????????Eligibility requirements

Develop a Plan for Repayment

·????????Borrow wisely. Never borrow more than you need. This is especially critical of a college student, as you don’t know what your future ability to repay these loans will be.

·????????Make sure you know when your first payment will be due, how much, and how to make the payments. Signing up for auto pay will often reduce your interest rate. Know how to contact your lenders if you have questions or need assistance.

·????????Understand how long it will take to repay these loans (Student Loan Calculator). Make additional payments against the principal, if you can. Paying a little more each month goes a long way toward lowering the amount of interest you pay and decreasing how long it will take to pay off.

Texas Bay is here to help college students with a great Student Loan program! Complete your application in as little as 15 minutes and initial credit decisions are often made within minutes! We offer competitive fixed-rate loans, starting at 2.74% APR*, and borrowing as much as $65,000 annually. Get great benefits, such as 0.25% interest rate deduction just for graduating and cosigners are released after the first 24 consecutive on-time monthly payments. Visit www.TexasBayCU.org/personal/student-loans for the details, to check your eligibility, and to apply.

Texas Bay is the leading credit union and financial partner in Houston that was founded on May 12, 1936, by Houstonians, for Houstonians. That means we work for our members. We take care of our members by using our net earnings for lower interest rates, higher dividends on deposits, low fees, and offer FREE products and services. Texas Bay succeeds by preserving a secure financial position, increasing membership growth, and maintaining high member satisfaction. We are Houston’s #1 Google-rated credit union and Best of the Best Credit Union in 2022.

* Annual Percentage Rate, with Auto Pay Discount)