It is a rare individual who can obtain a prohibitively expensive college education without taking out a loan of some kind, even if subsidized with scholarships or family help. Luckily there are Federal aid loans available as the first port of call, which offer the lowest interest rates to students and the most preferential repayment terms. Usually though there is still a shortfall in the funds required to complete a college degree and most students need to take on a private loan as well, to make up the shortfall.
An established name in the world of student loans is that of Sallie Mae. The company has a tailor made loan program for the student, to cover the federal shortfall, and is dependant on the usual conditions of the student having certification from the college regarding attendance there.
No form of student loan is as flexible and cheap as federal borrowing, but Sallie Mae student loans do offer clear and concise terms with optional features which can reduce the overall cost. There are various things which the student must be aware of concerning any loan when looking for an overall package.
The Sallie Mae student loan is available to eligible students studying in the US with school certification or to eligible students studying internationally. It is expected that federal funding will be in place before the application for a loan shortfall is made to Sallie Mae. The fees on a Sallie Mae loan vary between zero and three percent, and will be capitalized, that is added to the principal. This means that interest will of course be added to the fees. There is no repayment penalty on the loan.
The interest charged on the loan is payable during the college years, not deferred, so the student would need to ensure that funds are available to cover this, perhaps through part time work, savings or other means. There is a discount of 0.25 percent to those paying monthly through automated debit.
The interest rate itself, whilst not as low as that offered on federal loans, is lower than that on many standard loans. It is a variable interest rate based on the LIBOR rate (London Interbank Offered Rate) and can change monthly. Current rates are obtainable direct from Sallie Mae. It is possible to obtain a lower interest rate if the student has a credit worthy co-signer. An excellent feature of the loan is that the co-signer may be released from the loan when the student is working and paying the loan back, and are themselves credit worthy.
The company does not participate in the federal loan consolidation program, which is something you should give serious consideration to.
These are the key features of a Sallie Mae student loan, and should be compared with other loan options. Always take a look at the interest rate and the fee level combined before making a decision, and review the possible options included before committing to a specific loan. This could well be the first serious financial commitment a student makes, so take advice from college loan officers and adults with a sound financial history.