How Some College Students Are Making Money from Their New Student Loans and How You Can Too
Read about how Juno members are using their guarantee program for student loans to make money on them with negative interest rates.
When you're shopping around for a student loan and a company quotes you a higher rate, that's a huge disappointment -- right?
But, what if you were told that a higher rate could end up leading to a financial windfall worth thousands of dollars? You might think that sounds crazy -- unless you'd heard of Juno's amazing guarantee. Juno groups students and families together to negotiate with lenders and it has helped over 76,797 students nationwide borrow more than $410 million in student loans at more affordable rates than they could have imagined.
How can a higher interest rate on student loans turn into a financial windfall?
Juno was founded in 2018 to break all the standard rules of student loan borrowing by putting students in the driver's seat instead of lenders.
One of the ways the company does things differently is by providing a financial reward to would-be borrowers in situations where Juno can't offer them the most competitive rates.
Juno's guarantee is simple to understand: The company offers you the lowest rate on the private student loan market or it covers the entire cost of any extra interest you'd owe if you borrowed with Juno instead of a competitor offering a lower rate.
Not clear on what this means for you? Let's say Juno offers you a 15-year loan at 5.00% interest and a competitor offers the same loan at just 4%. Juno's loan would cost an extra $11,866 over the life of the loan. So you get that money in cash, up-front with absolutely no strings attached.
The cash Juno sends is yours to keep, and you can do absolutely anything you want with it from making a lump sum student loan payment to buying a car to commute to campus.
How Juno's guarantee can put cash in your pocket
While getting cash up front sounds great, you're probably wondering how this ends up helping you in the long-run since you've taken out a more expensive loan in terms of interest rate at the same time.
The answer is that Juno’s cash up front allows you to prepay a portion of your loan immediately and save money overall compared to other options without any extra steps.
To actually save even more than just through the cash upfront,, you have the option to refinance that loan you took out through Juno when you graduate. And if you do, you may be able to lower your rate considerably in the future. But you still get to keep that cash Juno sent out!
So, assuming you used that cash upfront to prepay a portion of the loan, let's say you decide to refinance upon graduation and get offered that same 4% rate. You won't end up paying that extra $11,866 that Juno sent you because you'll be switching to a new cheaper loan right away. Your loan from Juno will actually have a negative interest rate of -3.60% because Juno gives you back more money than the interest you paid, meaning you actually made money on your loan.
How is this guarantee possible?
Right about now, you're probably thinking that this deal sounds too good to be true. After all, Juno either offers you a student loan at a lower rate than you can get elsewhere or they send you thousands of dollars.
But there's a reason why Juno offers this unprecedented deal. The company is really confident in its process for securing the lowest possible rates for borrowers. See, Juno does things differently. It groups borrowers together and makes lenders compete for their business, so the typical borrower ends up with a median rate that's 1.6% lower.
That means Juno provides borrowers with lots of savings, but it doesn't often have to honor the guarantee since it's already helping students out by qualifying them for loans at rock bottom prices. And in the rare cases when a competitor does offer a better deal, Juno still wants you to borrow from them no matter the cost they face to get you to do it.
So, if you're borrowing for school, why not give Juno a try. Either you end up with a lower student loan interest rate than others would offer or you get a check in the mail that you can keep so you most likely can end up ahead compared to your other options. Check out Juno’s negotiated student loan rates and guarantee here.
SmarterCollege came into existence to help students and families save money through scholarships, student loans and other financial products. The SmarterCollege Team has worked with tens of thousands of students and families to help them save money.
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