Having the Internet at one's disposal today is invaluable when researching lenders for your student loans. When trying to choose a lender, it's necessary to research their company websites as much as possible.

Making the right lender choice for your circumstances is a very important decision, and one that can save you a lot of money in the long run. By sifting through all available choices, you will be able to find the best options within two major criteria: programs that help reduce the cost of repaying a loan (borrower benefit programs) and customer service.

It's important to do your own research when choosing a lender, in addition to considering your school's list of preferred lenders. While the school's preferences often benefit students the most and have good track records (not to mention the fact that it would likely speed up your loan process), you do have the right to choose from outside this list and there may be something out there that is preferable to your individual circumstances.

Choosing Good Lender

Very often, schools only recommend their lenders — they don't usually push — but if you find the latter is happening to you, don't forget: you will have a relationship with the lender you choose, not the school, for a very, very long time.

Back to the two criteria you should consider when choosing a lender. Loan incentives and benefits are mandatory to making it work for your wallet. Typically you will find a lender offers stronger front-end benefits than back-end benefits, or vice versa.

Front-end benefits allow you to save money at the beginning of the loan. These can include a low-or-no origination fee (the price you pay for taking out the loan); a low-or-no guaranty fee (money you pay for a third party to insure your loan) and interest rates that are lower than the prime.

Back-end benefits save money during the repayment period, after graduation. These might include: reduced interest rates for on-time payments and debit payments, or a fixed interest rate if you consolidate your loan.

Also, besides front-end and back-end combinations of borrower benefits, know what the lender offers in terms of capitalization. This means figuring out how often the lender adds the interest rate to the principal amount of the loan. The more they do this (whether it's once, or quarterly, monthly, annually etc.) the more you'll end up paying.

Is the lender's customer service good? Again, you'll probably have a relationship with your loan dealer for a very long time, so it pays to pick one that makes your transactions as smooth as possible.

Some offer conveniences like electronic fund transmission from your bank account, which allows faster processing and 24-hour customer service. Also, check to see if your lender candidate sells their loans to secondary markets, which happens quite frequently. If so, you will need to know who their potential customers are, so you can test their customer service as well. You don't want to find out once repayment starts that the secondary carrier of your loan provides less than stellar service for you.

Last, ask your potential lender what kinds of efforts they have put forth in the past to help people with potential default problems. A smart and reputable lender will go out of its way to help a customer avoid default, because ultimately, that hurts both the institution and the individual. So be sure to pick a lender that offers a little extra when it comes to counseling, debt consolidation or other means of avoiding default.