Custom Choice Student Loans: A Comprehensive Review

Choosing the right student loan is a crucial step in financing higher education. Custom Choice Student Loans offer undergraduate and graduate loans with both fixed and variable interest rates. This review delves into the details of Custom Choice loans, exploring their features, benefits, drawbacks, and how they stack up against competitors like Earnest and Sallie Mae.

Custom Choice Student Loans Overview

Custom Choice Undergraduate Student Loans extends both fixed-rate and variable-rate undergraduate and graduate loans. Custom Choice allows you to apply with a cosigner, which may reduce your interest rate and the overall cost of your loan. Loans have a term length of seven, 10, or 15 years.

Eligibility Requirements

To be eligible for a Custom Choice student loan, applicants must meet certain criteria:

Be a U.S. citizen or permanent resident, or an eligible non-citizen with valid documentation
Be at least 18 years old, or the legal age of majority in your state if your cosigner meets the age requirements
Be enrolled at least 50% of the time in a degree-granting program at an accredited or approved college
Meet the school's academic requirements
Have a minimum credit score of 625
Have a minimum annual income of $1
Have at least 18 months of good credit history or have a good cosigner

Application Process

The application process for Custom Choice student loans involves several steps:

Gather the required information. This includes your Social Security number, your school of enrollment, your enrollment status, the loan amount you need, your address, and other financial documents.
Fill in the details of your online application. It will take just a few minutes to complete, and then you'll get your rates.
Send the required supplementary documents. Custom Choice may require certain financial documents, including proof of income and residency.
Accept your loan offer. After you get all your documents in order, Choice Choice will send you a formal loan agreement. Then it will fund your loan after you sign on the dotted line.

Required Documentation

To apply for a student loan with Custom Choice, you'll need to provide your Social Security Number, proof of income, proof of acceptance to an accredited institution, and the loan amount you'll need. You'll also need to supply a recent pay stub, monthly housing cost, and your anticipated graduation date. If applying with a cosigner, they'll need to provide their Social Security Number, proof of income, as well as a government-issued ID.

Interest Rates and Fees

Current Interest Rates

Custom Choice student loan interest rates range from 4.45% - 14.08% variable and 4.24% - 14.02% fixed. Borrowers can choose whether they want a fixed interest rate for the life of the loan or a rate that changes with the market. Custom Choice has competitively low rates compared to similar student loan lenders.

Fee Structure and Loan Terms

There are no fees associated with Custom Choice student loans. This includes no origination fees, no prepayment fees, or late fees. You can take out a loan with a term of either seven, 10, or 15 years.

Repayment Options and Flexibility

Available Repayment Plans

Custom Choice offers several options to repay your loans: deferred, flat, interest-only, and immediate payments. The best repayment plan for you depends on your situation.

Deferred Repayment: Make no payments while in school or during a six-month grace period. Unpaid interest accrues, and interest is capitalized at the end of the grace period. This option has the highest total cost.
Flat Repayment: Pay $25 per month while in school and during a six-month grace period. Unpaid interest accrues, and interest is capitalized at the end of the grace period. This offers low in-school payments.
Interest-only Repayment: Pay the loan's interest monthly while in school and during a six-month grace period. This results in higher in-school payments.
Immediate Repayment: Make payments on the loan's principal and interest right away. This has the highest in-school payments but the lowest total cost.

Impact of Repayment Plans on Loan Cost

Deferred and flat payments will cost more than interest-only or immediate payments because interest will accrue while you're in school and during your grace period. This interest will then capitalize, meaning it will be added onto your loan balance after periods of nonpayment, including forbearance, deferment, and after your grace period. This will increase your overall loan principal, and you'll later pay interest on that higher amount, upping the total cost of your loan.

Additional Benefits

If you choose to make automatic payments from a checking or savings account, you'll receive a 25 basis-point discount on your rate. Additionally, Custom Choice offers a 2% Grad Reward reduction on your loan's principal after you complete your degree. Custom Choice will perform a soft credit inquiry when showing you your rates, which does not impact your credit score.

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Pros and Cons of Custom Choice Student Loans

Advantages

No origination fee, prepayment penalty, or late fee. You won't pay fees on Custom Choice's student loans, saving you on the overall cost of borrowing.
Low minimum loan amount. You can borrow as little as $1,000 from Custom Choice, a great option if you only need a little money to tide you over.
Loan balance reduction after graduation. Custom Choice will reduce your overall loan balance by 2% after you graduate.
Flexible repayment terms. Choose from 7, 10, or 15-year repayment plans to best fit your financial situation.
Cosigner release available. Borrowers can apply to remove their cosigner after making 36 consecutive on-time principal and interest payments.

Disadvantages

Rates on graduate loans are more competitive than on undergraduate loans. Borrowers who want an undergraduate loan might find a better deal elsewhere.
No mobile app. If you want to manage your loans on the go, you won't be able to do so with Custom Choice.

Alternatives to Custom Choice Loans

Custom Choice Student Loans vs. Earnest Student Loans

Earnest Undergraduate Student Loans offers six repayment term length options, while Custom Choice has only three options. Custom Choice has the lowest maximum interest rate on both fixed-rate and variable-rate loans for undergraduates and graduate students - which could mean it's a good choice if your credit isn't in the best shape. Earnest offers the lowest minimum interest rates on these types of loans, so if your credit score is excellent, Earnest may be a good choice.

Custom Choice Student Loans vs. Sallie Mae Student Loans

Custom Choice and Sallie Mae both have three repayment term options. However, Sallie Mae Undergraduate Student Loans determines your repayment term length for you, so another lender will be better if you want to choose your own length. Neither lender charges origination fees or prepayment penalties, but Sallie Mae does charge a late payment of 5% of the amount due, capped at $25. Sallie Mae loans are made by Sallie Mae Bank. Sallie Mae, the Sallie Mae logo, and other Sallie Mae names and logos are service marks or registered service marks of Sallie Mae Bank. SLM Corporation and its subsidiaries, including Sallie Mae Bank, are not sponsored by or agencies of the United States of America.

Customer Experience

Custom Choice Student Loans doesn't have a BBB page. However, the Custom Choice Loan is made by Citizens Bank, which currently has an A rating from the BBB. It's also worth noting that in May 2023, the Consumer Financial Protection Bureau (CFPB) reached a settlement with Citizens Bank over allegations that it violated consumer financial protection laws related to credit card dispute resolution.

Why You Should Trust Us: How We Rated Custom Choice Student Loans

We rate all student loan products in our reviews and guides on a 1-5 scale. The overall rating is a weighted average considering seven different categories, some of which are judged more heavily than others. They are:

Interest rate (20% of rating)
Fees (20% of rating)
Term lengths (15% of rating)
Repayment options while in school (15% of rating)
Borrower accessibility (15% of rating)
Customer support (7.5% of rating)
Ethics (7.5% of rating)

Each category's weighting is determined based on its importance in the overall experience of taking out a student loan. No, Custom Choice student loans typically carry no origination fees or prepayment penalties.

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