Flickr user Fredrik Rubensson

After you’ve applied for student loans, both federal and private, you may be receiving quite a few responses and offers. Some may be enticing, but it’s important to investigate it carefully to ensure it’s right for you. Here are a few student loan red flags you should be on the lookout for:

High Interest Rates

A high interest rate may be the most obvious red flag when it comes to student loans. However, you’ll only need to worry about this for private loans; federal loans have fixed interest rates. To avoid accepting a loan with high interest, do your research into the average rates for similar loans. The industry average is currently around 9-12%.

However, it’s also important to ask the lender why the interest rate is so high. It could be that yours or your co-signer’s credit score isn’t high enough or there isn’t enough income. This may be the case if every private loan offer you receive comes with a higher than average interest rate.

Offers More Than You Need

While it may be tempting to take a loan offer that gives you more money than you actually need for college, you should avoid this. You will be responsible for paying that money back with interest in the future and it could come back to haunt you.

Keep your financial aid for your college expenses and only your college expenses. Paying for video game consoles or vacations could lead to trouble down the road.

High or Few Repayment Options

When you go to accept a loan, you may want to consider talking about the repayment options that will be available to you. In some cases, you may only be offered one selection and it could be an extremely high cost. Could you afford that amount straight out of college even if you managed to get a job within six months?

If the answer is no, you may want to consider other financial aid options. Some lenders will offer deferments, income-based repayment, and grace periods. Federal student loans have these protections for borrowers, but private lenders are not required to offer any.

Avoid Student Loan Scams

These scams usually happen after graduation or you’ve left school, but there are still red flags you should be on the look out for. Companies that are promising debt elimination, lawsuits to settle student loan debt, or are asking for money in order to refinance or consolidate your loans should be avoided.

Federal student loan debt can’t be eliminated except for a qualified reason determined by the government. During lawsuits, payments are generally not made and it could destroy your credit score.

Knowing these student loan red flags could save you trouble and headaches down the line, especially after you graduate or leave school and they come due. To avoid being caught up in these, always read the fine print of any offer you are considering, compare loan offers from several different lenders, and do your research. If you know what to expect, you can steer clear of many problems down the road.

Use College Raptor’s new Student Loan Finder to discover personalized private loan options that work for you. Compare lenders and interest rates to find the ideal student loan.