I’ll admit it-when it came time to take out a loan for college, I never shopped around. Like most people, I took out the first loan offer I found, under the assumption that my parents would continue paying off my loans after graduation. I was in for a rude awakening after graduation when I had to begin covering the monthly payments myself.
On my small starting salary factoring in a large loan payment each month was near-impossible. It was in that moment that I realized just how uninformed of a decision I made. I had other options for student loans, yet I failed to take the time to objectively compare the loan with even one or two other offers.
As an adult, I never buy anything without shopping around, but because I was so inexperienced at 18, I didn’t think twice about signing on the dotted line for that loan.
Like myself, many students simply go with the loan options/suggestions provided to them by their institutions. While these options may be convenient, they are often not the best interest rates or loan terms. The truth is that the financial choices many students make before they enter college can greatly affect their financial life as a young, working adult.
This is why I created Achieve Lending- the first tool of its kind to aggregate loan offers for those seeking private financing for their education. Designed to help both traditional and non-traditional students find the best student loans, the online portal, or “search engine” as I like to call it, allows users to quickly search, find, and compare interest rates between lenders, often in as little as thirty seconds.
Through the use of our tool, Achieve Lending applicants are able to save thousands of dollars on their student loans.
How Achieve Lending Works
First, an applicant submits a single form at achievelending.com. The form is intuitive, clear, and very easy to use, often taking applicants less than 30 seconds to complete.
After filling out the form, applicants are presented with a personalized menu of viable offers based on the following:
a. Applicant Attributes
b. Lender Criteria
After reviewing the loan options, interest rates, and terms, the applicant selects an offer, and then proceeds to the lender’s website to complete their application.
Achieve Lending isn’t just for college students, either. For those seeking a non-traditional education, money for a professional or trade school program, or for those seeking additional certifications after college, Achieve Lending can also find loan offers for you.
How Achieve Lending Helps Students Save Money
Most students are used to the traditional big banks such as Sallie Mae and Wells Fargo providing loan options, but bigger isn’t always better. New technology like Achieve Lending allows students to competitively shop interest rates between private lenders with ease.
So what is the return on investment for using a tool like Achieve Lending? Say a student takes out $40,000 in student loans over four years with a loan term of 15 years. With an interest rate of 9% annually, the student can expect to pay nearly $33,000 in interest over the fifteen years. The interest alone is almost the value of the original loan! Crazy. On top of buckets of interest, the monthly loan payment would be close to $400, which can be tough for new grads to swing on their starter salaries.
Say that by shopping for private loans a student gets an interest rate from a lender of 7%. The same borrower who took out $40,000 at 7% interest annually would pay $24,700 over fifteen years, a difference of $8,300 over the lifetime of the loan. The monthly payment on the 7% loan would be a more manageable $350. Savings like that could fund the down payment on a first home, go toward the purchase of a car, or launch a business.
Because I was so uninformed as a student borrower, Achieve Lending also seeks to empower consumers by providing financial education on terminology used within the loan shopping process, such as repayment schedules, penalties, forbearance and other benefits of certain loan products. We have a great blog with information on refinancing loans and changes to education financing so users can stay up-to-date with changes in the education financing industry.
For many young adults, attending college or university is the first step toward financial literacy and independence. That step often begins with financing their education, and in today’s economy considering non-traditional lenders, and it can mean big savings. Credit unions and smaller lenders, like LendKey and CommonBond, can provide better customer service and cheaper rates than many of the big guys, and often come with additional perks such as a close community of borrowers and one-on-one counseling. Students can also get creative when it comes to shopping for education financing, such as using peer-to-peer and crowding lending sites.
Whichever way you decide to fund your education, remember that the amount you borrow and the interest rate you agree to could impact your finances for the rest of your adult life. Students should always be encouraged to shop for interest rates and get the total picture before signing on a loan. As you can see, shopping for interest rates not only saves you money over the lifetime of the loan, but interest rate shopping secures a better financial future.
Allen Kors is the Founder and CEO of Achieve Lending, the first ever search engine for education loans. Designed to help both traditional and non-traditional students find the best student loans, Achieve Lending offers users a free online portal to search, find, and compare student loans, often in as little as 30 seconds.
Kors founded Achieve Lending at just 27 years old after six years of working in the finance industry. His resume boasts time spent at the world’s premier financial firms, with positions in investment banking, private equity, angel investing, and consulting. After leaving his job in angel investing to pursue entrepreneurship and form his own financial technology company, Kors now aims to build the ‘Kayak’ for education loans and empower Achieve Lending users by providing financial education on the loan process and terminology.