A Choice private student loan is made by a credit union rather than a for-profit lender. The Student Choice loan is offered by hundreds of credit unions around the United States. It can be a good loan for those seeking options and a fair value. What makes Student Choice unique is that it was created out of a collaboration among the leading credit unions in the U.S. The result of this collaboration is a better way for students to have the funds needed to pay for their education.

Because credit unions don’t lend to make a profit, the interest rates tend to be lower, the fees are usually fewer, there are no origination fees, and the repayment terms tend to be more flexible than the terms offered by traditional lenders.

There are two main products offered with these loans; private student loans for students and student loan refinancing for borrowers looking for lower rates or better terms.

Loan Amounts

The amount a student can borrow is also a factor because education can be expensive. Students can borrow as little as $1,000 or as much as $30,000 per year. The lifetime cap is $60,000.

Student Choice Interest Rates

Credit unions can offer competitive interest rates with the Student Choice loan. The exact rate is determined by the creditworthiness of the borrower and/or a co-signer, if one is needed. Another factor that determines the interest rate is the Prime Rate or the London Interbank Offered Rate (LIBOR). The interest rates are variable, which means they can change based on the many other factors.

Repayment Choices and Terms

When it’s time to pay the loan back, there are several repayment plans. They include:

  • Accelerated – An option that works for people who can repay larger amounts to pay off the loan faster.
  • Standard – This is the usual repayment plan that averages a monthly payment of $125 for every $10,000 borrowed. The repayment term lasts for ten years.
  • Graduated – Repayment can begin at an amount that is half of the standard repayment amount and increase over time. The loan term can be as long as 30 years.
  • Extended – Payments can be fixed for up to 30 years, but the payments are lower.
  • Income-Contingent – This is an income-based repayment plan that reassesses the borrower’s finances annually.
MUST READ:
How to Settle Student Loan Debt

The exact repayment options depend on what the lender decides.

Student Choice Underwriting Requirements

To apply for a Student Choice loan, there are certain eligibility requirements that must be met. Those requirements are:

  • Eligible to become a member of the respective credit union
  • Undergraduate or graduate business student
  • A U.S. citizen or permanent resident
  • Continually enrolled in a degree program
  • Meets the school’s minimum performance requirements
  • Attends a school that has been approved by Student Choice
  • Meets the minimum credit requirements or has a co-signer with appropriate credit

Pros and Cons of Student Choice Student Loans

There are many advantages to Student Choice private student loans, such as flexible terms and payment options. The interest rates are competitive, there are no fees, and it’s possible to cover up to four years of a college education. Even the application process tends to be less daunting, and it takes less time for a decision to be made. If a loan requires a co-signer, it may be possible for the co-signer to be released from the loan after the student has satisfied a certain number of on-time payments.

As for the cons, the credit requirements can be strict. If borrower’s credit rating doesn’t meet the requirements, the alternative is to find a co-signer who does. The interest rate is also variable, which means it fluctuates over the life of the loan. A fluctuating interest rate affects the payment amount and the overall amount of money paid on the loan. It is good to weigh the pros and cons so you can make an informed decision about opting for a private loan. What may work for one person may not work for another, but there are some good options that come with a Student Choice loan.