Best Student Loan Marketplaces of 2022 | U.S. News : Inside UK

Student loan marketplaces let you see if you’ll qualify for offers from multiple lenders and estimate rates with no harm to your credit score. Marketplaces also allow borrowers to compare multiple loan offers in one place online. But you’ll still need to shop around to make sure you get the best deal on a student loan.

Here’s what you can expect from student loan marketplaces and how to best use them to find a private student loan.

You can use an online marketplace for free to prequalify with multiple lenders at once and compare loan offers. You can also complete your loan application on the marketplace.

“A student loan marketplace allows you to compare terms, rates, repayment ability, prepayment penalties and costs in the private loan market,” says Whitney Barkley-Denney, senior policy counsel at the Center for Responsible Lending, a nonprofit consumer advocacy group.

A marketplace may show you a dashboard with options for each lender, including estimated interest rates and term lengths. Make sure you look at the annual percentage rate, maximum loan amount, minimum credit score and repayment timeline for any loan you are considering.

A student loan marketplace will also offer a way to apply for a loan. This may be as simple as clicking on a link to the lender from the marketplace.

Take some time to understand the virtues and limitations of a student loan marketplace.

You can trust the information you find on a student loan marketplace, but make sure you consider the source. A marketplace is a sales platform and may steer you toward a featured lender. Take some time to research any lender before applying.

“Just because a lender is featured on the marketplace doesn’t mean they’re any good,” says Bruce McClary, senior vice president of communications for the National Foundation for Credit Counseling. “Seek guidance from other resources that may not be trying to sell you something.”

That means shopping around and getting independent advice from trusted sources, such as a nonprofit credit counselor, McClary says. Even a simple online search can help inform your decision about using a particular lender.

“You may not be receiving the most objective overview of each choice, so look at it as a starting point and go to other sources that can be helpful,” McClary says.

When you apply through a marketplace instead of directly through a lender, the main difference is that you can prequalify with multiple lenders simultaneously. The marketplace also connects borrowers with appropriate lenders.

“You’re going through the portal to interface with the lender,” McClary says. “You’re not applying through the marketplace; you’re using the platform to connect to the lender.”

Soft credit checks are used to produce a marketplace’s personalized rate estimates you can then compare. You can save time, money and stress as the terms for multiple loan offers are laid out for comparison.

Here are some of the most important factors to consider as you compare student loans in a marketplace:

For many borrowers, loan choice boils down to the right monthly payment. Still, make sure you’re also looking at the fine print, including fees and repayment options.

Prioritize loans from trustworthy lenders with the best rates, fees and repayment terms for your financial situation. A lender that accepts co-signers could be a good choice if you need help qualifying for a loan.

And if your financial future is uncertain, find out what happens if you miss a payment. Learn what options you have for deferment or forbearance before you need them.

“Don’t avoid reviewing some of the worst-case scenarios because you assume it won’t happen to you,” McClary says.

A student loan marketplace is a good resource for loan shopping, but it might not be your best option.

A marketplace shows you just the lenders featured on the platform. You won’t find federal student loans, and you may miss out on smaller or local lenders, for instance.

Before you rely on a student loan marketplace, you should also consult:

Ultimately, even the best private student loan in a marketplace probably won’t beat the terms of a federal loan. A federal student loan provides significant advantages, including fixed interest rates, forbearance and deferment options, and income-driven repayment plans.

Exhaust federal loans before you turn to private lenders. And you will always need to do your homework before you apply for a loan, regardless of whether you use a marketplace or go straight to a lender.

A student loan marketplace, McClary says, “could be viewed by some as one-stop shopping, but there’s a danger because that may lead to a lack of effort on the part of the borrower to do some research. What you’re looking at is a presentation of featured lenders that is not likely to represent the full spectrum of choices.”

Our Student Loans Methodology

U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.

To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. The scoring factors for private student loan providers are customer service ratings, fixed APR, variable APR, loan product availability, minimum and maximum loan terms, minimum and maximum loan amounts, minimum FICO score, and online features.

The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.

To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.