You have probably bought gas before, filled your tank, and felt pretty confident that you had found the best deal in town. You actually probably couldn’t wait to tell your friends and family about this cheap gas station that you spotted with your own eye. That is, until you drove a mile down the road and find a service station offering the same fuel for ten cents cheaper. It’s kind of a let down, right? Many mobile applications, such as the ever-popular “Gas Buddy,” can take your current location and show you the cheapest gas prices in your surrounding area. It can save a lot of hindsight, and eventually, a lot of money.
The same scenario goes with any sort of market-based purchasing system—home buying, car shopping, and most notably, student loans. Since each place offers a different interest rate, it’s good to know what you are getting into before signing the dotted line. While most federal loan programs will have fixed rates, most private lenders do not. Private institutions like SunTrust clearly lie out the terms of their rates, and even give you an easy-to-read comparison chart to check out before you make a decision. So there might not be an app for location the best interest rates for loans, but with enough research you will be well on your way to making an educated decision.
The SunTrust charts are based on the potential lowest and potential highest interest rates for the marketing. For one of SunTrust’s Custom Choice Loans with immediate repayment, you are looking at a broad range of between 5.49% and 10.98% in interest rates—quite a difference. So, if you are pulling a $10,000 loan, you will most likely have a three-month deferment period with a 15-year payment period (which is a total of 180 months after the grace period). Here’s where it gets scary: By finding the loan at the low interest rate, you’re looking at about $14,800 total—not too bad. But get this; by acquiring the higher interest rate, you will eventually be above $20,700 in the hole—which is well over double what you initially borrowed!
That is just one example of how interest rates can really make a difference in your future financial situation. Even though we cannot control the market, we can control where we get our resources from—or at least do all we can to try. SunTrust encourages their customers to consider all other forms of aid (grants, scholarships, federal loans) before you begin applying for private loans. But also keep in mind that private loans are not a bad thing. Just make sure to know your loan—and more importantly, know your interest rate.