If you’re in the market for a private student loan, it’s important to shop around and consider multiple lenders before you settle. Custom Choice student loans offer competitive interest rates and flexible repayment options, so you can get the repayment plan that works best for you.
If you’re considering a Custom Choice student loan, here’s what you need to know about the lender and how to determine if it’s the right private loan option for you.
Custom Choice student loans: Company overview
The Custom Choice Loan is powered by Cognition Financial and funded by Citizens Bank, and has been in the market for over 10 years. Custom Choice is not a company, but a loan program available through the partnership of these two companies.
Prior to July 2020, Cognition Financial offered the loan program in partnership with SunTrust Bank.
Cognition Financial provides the sales, marketing, origination, underwriting, and portfolio management for the loan program, while Citizens Bank is the lender.
Cognition Financial has helped lenders facilitate more than $23 billion in private student loans over the past 30-plus years.
Is Cognition Financial a reputable company for private student loans?
Cognition Financial has been in business for more than 30 years, working with different major lenders to provide private student loans to undergraduate and graduate students. Additionally, Citizens Bank can trace its roots back to 1828 and is one of the largest retail banks in the United States.
There are also very few complaints about Cognition Financial in the Consumer Financial Protection Bureau database — only four in over a decade. Citizens Bank also has relatively few complaints about its student loan program, with just 243 complaints since December 2011.
So, if you take out a Custom Choice Loan, you don’t have to worry about getting scammed. It also appears that there aren’t many customer service issues, though you should research Custom Choice student loan reviews online before you apply.
Pros of getting a Custom Choice private student loan
As with any financial product, there are both benefits and drawbacks to consider. Here are some of the pros of the Custom Choice Loan:
- Flexibility: You’ll have four different repayment options to choose from, which can help you limit your total costs over time.
- Eligibility: If you are enrolled less than half-time in a degree-granting program at an eligible educational institution, you are still eligible to apply for an Custom Choice Loan.
- Offers a principal reduction: The lender will automatically reduce your principal balance by 2% if you can provide proof of graduation.
- No fees: A lot of private student loan companies advertise no hidden fees, but with a Custom Choice Loan, you won’t pay any fees at all.
- Get prequalified: As with most other private student loan companies, you can get prequalified with just a soft credit check to see if you’re eligible.
- Returning borrower advantage: If you already have a completed Custom Choice Loan,
when you come back to apply again, your new application will be pre-filled and
income verification will be waived.
Cons of getting a Custom Choice student loan
While there are some clear benefits that can make a Custom Choice loan worth getting, it’s also important to consider the potential pitfalls that could negatively impact your experience:
- No transparency with eligibility: While you can get prequalified with just a soft credit check, specific eligibility requirements are not provided up front, such as the minimum income or credit score.
- Limited repayment terms: You can choose between three repayment terms ranging from seven to 15 years. If you want more flexibility, consider other lenders that may offer ranges between five and 20 years.
- No parent loans: While undergraduate and graduate students can add a parent to their application as a cosigner, parents can’t apply on their own to help pay for their child’s education. If you want a parent loan, you’ll need to look elsewhere.
- Limited forbearance: You can get up to 12 months of forbearance, but only in two-month increments, and you need to have at least 12 months of on-time payments between incremental forbearance periods. You also can’t have more than two forbearance plans over a five-year period.
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Unique features of Custom Choice Loans
A lot of the features of the Custom Choice Loan are similar to what you can get from popular private student loan companies. However, there are also some benefits that make a Custom Choice Loan stand out from the competition:
Principal reduction
Once you graduate from college, your principal balance will be reduced by 2% when you provide proof of graduation. Depending on your total loan balance, this may not be a significant amount of savings, but every reduction counts when you’re talking about student loans.
Flexible repayment options
Similar to many competing private student loan options, Custom Choice Loans offer four repayment options:
- Deferred: You won’t have to start making payments until six months after you graduate or fall below half-time status.
- Flat: You can opt to pay $25 per month while you’re in school to reduce the interest that’s accruing on your student loans. Then, you’ll start making full payments after you graduate. This option is only available if you borrow $5,000 or more.
- Interest only: You can also opt to pay the full amount of interest that accrues every month while you’re in school, after which you’ll make full payments upon graduation.
- Immediate: If you can afford it, you can make full principal and interest payments immediately upon disbursement of your loans. This may be a viable option if you are enrolled less than half time while working your way through school.
Deferred payments are standard for college students, but the interest that accrues while you’re in school and your payments are deferred will be capitalized when you graduate and added to your student loan balance.
In other words, if you can afford one of the other repayment options, it could potentially save you a lot of money in the long run.
College scholarship
College students can apply for a $1,500 scholarship, which is offered once a month through September 30, 2022. Simply provide a few details about yourself and consent to receive information about the Custom Choice loan, and you’ll be entered in the Paying for College Scholarship Sweepstakes.
Other features of a Custom Choice Loan
As you consider whether a Custom Choice Loan is right for you, here are some of the other features to keep in mind during your comparison process:
- Loan amounts: Borrow between $1,000 and $99,999 annually and up to $180,000 in aggregate student debt.
- Repayment terms: You can choose between seven, 10 and 15 years for your repayment plan. The 15-year plan is only available if you borrow $5,000 or more.
- Interest rates: Custom Choice loans can come with either fixed or variable interest rates. In most cases, it’s best to go with a fixed rate because it won’t change over time. The lender also offers a 0.25% interest rate discount if you set up automatic payments.
- Fees: The Custom Choice Loan doesn’t have any fees at all, including late fees.
- Cosigner release: You may be able to qualify to release your cosigner after you’ve made 36 consecutive on-time payments, and you can meet the lender’s eligibility criteria on your own.
- Forbearance: The loan comes with disaster and unemployment forbearance in two-month increments, up to a total of 12 months. However, you need to make at least 12 monthly payments between incremental periods, and you can’t have more than two of them in a five-year period.
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Who should get Custom Choice student loans?
As with any financial product or service, it’s crucial that you take the time to shop around and compare multiple options before deciding on one. Generally, it’s best to focus on federal student loans first and turn to private student loans only after you’ve exhausted your federal aid allotment.
A Custom Choice Loan may be worth considering for college students who have excellent credit (or a cosigner with excellent credit) and want flexible repayment options.
That said, if you’re concerned about a lack of forbearance options, make that a priority as you consider all of your options.
Their credit and income requirements are not publicly disclosed, but the following criteria are provided:
- You must be a U.S. citizen, or a permanent resident or an eligible non-citizen with documentation that’s valid through the academic period.
- You must be enrolled in a degree-granting program at an eligible educational institution.
- You must be the legal age of majority in your state or at least 17 years old if you have a cosigner who meets the age requirements.
If you’re not certain whether you’re eligible, go through the prequalification process to check eligibility and potential rate quotes.
How to find Custom Choice private student loan rates and compare them with other options
You can obtain a rate quote directly for a Custom Choice Loan by filling out the prequalification form. You’ll need to provide some basic information about yourself, your cosigner (if applicable), your school, your anticipated graduation date, the loan amount you’re seeking, and monthly housing costs.
If you want to compare your Custom Choice Loan rate with other options, you can research other private student loan companies and go through a similar prequalification process to obtain rates from them.
In addition to rates, make sure you also compare repayment options, forbearance and deferment plans, cosigner release and other features that are important to you.
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