How to Borrow Private Student Loans Smarter

When you’ve maxed out scholarships, institutional grants, and federal student aid, private student loans are usually the next stop when looking for money for college. If that sounds scary, know that it doesn’t have to be.

No matter which stage of higher education you’re in, there are multiple private student loan programs and options, so the key is learning about those options and choosing what fits best with your needs and goals. And – as with any service provider you choose – the lender you select has a big impact on how successful and simple your experience is. You’ll also want to figure out how much you can safely borrow in order to achieve your educational and financial goals.

 Understand Private Student Loan Options

Don’t wait to apply for student loans, and then take the first offer that comes your way. There are several options you’ll want to consider, and the program you choose can have long-ranging impact. Here are some of the most important things to consider when choosing a private student loan.

  • Shop around for interest rates based on your situation. Advertised loan rates may not apply to you, and origination fees may not be widely communicated. You should never have to pay origination fees for private student loans.
  • You’ll likely need a cosigner (almost 90% of in-school loans have a cosigner) if you don’t have established credit, so see what rates you and your cosigner qualify for.
  • Choose a fixed or variable interest rate based on your ability to adjust to changes in your payment amount over time.
  • Look for borrower benefits like these:
    • A grace period after you finish your degree (U-fi offers a six-month grace period)
    • An interest rate reduction for setting up automatic payments (U-fi offers a .25% interest rate reduction with auto debit)
    • The release of your cosigner after a certain number of on-time monthly payments; U-fi releases cosigners after 24 months of on-time payments.

Look for Flexible Repayment Options

 Flexible repayment options can save you money over the life of your student loan. U-fi offers repayment options like these:

Flexible Repayment Plan Options
Repayment OptionRepayment Description
Immediate repaymentAllows you to make full principal and interest payments when the loan is paid out, saving you money over the long run
Interest-only repaymentAllows you to make payments that cover the accrued interest while you’re in school to minimize the amount of interest and total amount you pay over the life of your loan
Deferring principal and interest paymentsAllows deferment until after you graduate or are enrolled less than half-time; you may be able to defer payments up to 78 months plus the six-month grace period
Flexible repayment terms from 5-25 yearsAllows you to find the right payment amount and overall amount paid to fit with your budget and your life situation

Choose a Trusted Lender

  • Knowledgeable, experienced and trustworthy – U-fi is backed by the nation’s largest student loan servicer, with 20+ years of experience.
  • Real people providing expert support – U-fi’s expert team helps you find a student loan that fits your needs – and learn how to manage your money for financial wellness.

Figure Out How Much to Borrow

Look ahead at what your expected situation (income, expenses, etc.) will be, post-graduation. Make sure you have a little bit in savings for emergencies so that you don’t find yourself taking on an extra job while in school, which can make it tough to finish your degree on time. Need help finding that balance? U-fi’s experts are here to help answer questions, too.

Most people need to borrow private student loans to help pay for college, but be smart about it. That’s what U-fi is here for. Get started with U-fi today.

Ron Hancock
Written By:

Ron Hancock is the Regional Director for U‑fi Student Loans and is an expert in many aspects of financial aid, student loans, and debt management. A graduate of the University of Oklahoma, Ron has worked in a number of areas of higher education finance, including positions in a college financial aid office, training and development for a state agency, and most recently as National Manager for Nelnet’s Partner Solutions team. Ron has spoken at numerous financial aid conferences all across the United States.

View all posts by Ron Hancock