If you are going to apply for a student loan you should find one with low interest. This will make a huge difference especially with student loans, since they tend to be large.
Finding the lowest interest rate you possibly can is really important. It'll save you a lot of money in the future. For instance, if a student gets a 6 thousand dollar, 5-year loan with 10% interest rate, his monthly payment will be $127.48. On the other hand, if another student gets the same exact loan for the same exact time period (5 years) with an interest rate of 6% his monthly payment will be only $116. That is more than a $10 per month difference! When the loan is finally paid off, the person who had the 10% interest rate will have forked out $688.86 more than the person with a 6% interest rate. For anyone that would be a lot of money, but especially for college students.
Low interest loans are sometimes difficult to find, however, here's ways to locate a low-interest loan:
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Offer Collateral: Usually lenders approve loans a lot quicker if the borrower pledges their home or car as collateral. However, most students don't own a house and a few don't have a vehicle. If you cannot find a good source of collateral, you may want to ask your parents to obtain a loan for you.
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High credit score: If you have proved in the past that you can repay loans (whether credit card or other) lenders will be more likely to lend you money because they feel a greater security in getting it back.
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Proof of successfully closing loans: If you have successfully paid off a previous loan, bring proof of that to your lender.
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Have a job: When a lender is certain that you have a way to repay them, it increases your chances of acquiring a low-interest loan.
Some of the lowest rate loans you can get are federal student loans such as the Stafford or Perkins loans.
Stafford college loans provide lower interest rates than private loans, but a little higher than Perkins loans. Stafford loans are available to students attending college at least half-time and the Stafford loan has a variable interest rate that changes once a year.
Perkins Student Loans provide an interest rate of merely 5%, and are available on a first come first serve basis. Nevertheless these loans are available only to students who are a terrible condition financially. These payments span over 10 years and can be discharged in certain circumstances.
Low interest loans can be found if you understand where to look and what makes you eligible.
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Elise Fisher loves writing articles that help college students understand how to pay for all the many expenses college brings. In addition to this, she has created a website that helps college students understand everything they need to know
About Student Loans. Make sure you visit the
Low Interest Student Loans page.
