Choosing a Lender

Families should look for these loan features when comparing student loan options:

Competitive student loan interest rates

Do your homework—compare interest rates and fees. If a lender is offering a loan without a loan or origination fee, is the interest rate higher?

Here are some comparison tables that will help you quickly see differences in some of the student loan options that may be available to you:

  • Maine Private Education Loan Network Lender Comparison Tables
  • Federal Direct (Parent/Grad) PLUS Loans vs. Maine Private Education Loan Network Loans comparison chart

Fixed or variable interest rates

Determine whether a fixed or variable rate is a better fit for you and find the lender(s) who offers a rate that suits you. This is a question every borrower must ask him or herself and there’s no easy answer. Just consider your situation and weigh your options—follow this link to help decide what’s best for you.

Annual percentage rate (APR)

The APR is the cost of interest and fees on a loan expressed over time. The APR is intended to assist you in comparing the cost of various loans that have different fees, rates and payback periods.

Repayment and deferment options

If you need to defer all student loan payments until you finish school or you want to pay interest only, you will need to seek loans that have these options. Some loans may only offer immediate repayment. It’s always good to make sure you have the flexibility to secure a loan deferment because life can change fast.

Quality of customer service

When you have questions, how do you want them answered? Personal assistance and online capabilities to get your questions answered in a timely manner are important. Find a lender that provides you the service you expect when you need it.

Lender experience and reputation

How long has the lender been in business? Do they have a good reputation?

Loan resale

Will the lender hold on to your loan or sell it to another group? If it is sold, learn about what loan terms and benefits might change with your new lender. It can be helpful to work with the same lender from application through your loan being paid in full.

Additional Considerations

What benefits or discounts are available for things like loyalty or automatic payment discounts?  Are there application, origination or disbursement fees? Is there a prepayment penalty? Are there other fees such as late payment fees and returned check fees and when do they occur?

Research your options and compare private loan features for all the lenders you are considering. For each lender you’re considering be sure to understand the answers to the questions below.

  • What is the application process?
  • Who is considered an eligible borrower?
  • What are the approval criteria?
  • What are the minimum and maximum borrowing amounts?
  • What are the annual and aggregate borrowing limits?
  • What is the interest rate and is there an interest rate cap?
  • Are the interest rates variable or fixed? If variable, how often do the rates change?
  • Are there application, origination or other fees?
  • What are the loan repayment terms and borrower benefits, including deferment and repayment options?
  • What are the tax benefits?
  • What are the prepayment penalties, if any?