Student Loan rates are generally lower than other traditional loans, as they are tailored for student borrowers and are meant to make college affordable. As a result, Student loan rates, namely the loan's Annual Percentage Rate (APR), are often quite low, which makes repaying the loan much easier for students. While researching student loans, be sure to look closely at the different student loan rates. You should also remember to pursue federal loans before private student loans, as federal student loan rates are almost always lower than private student loan rates.
Types of Student Loans with Low Interest Rates
Federal student loans often have the lowest interest rates out of any student loans, with subsidized Stafford and Perkins loans standing out as having the lowest federal student loan rates. The Stafford Loan is a federal loan that has a low interest rate, relatively high borrowing limits, and is given out on the basis of financial need, not credit-worthiness. There are two types of Stafford loans: subsidized and unsubsidized, where the subsidized Stafford loan is disbursed on the basis of financial need, and the unsubsidized is given out regardless of financial need. The difference between the two loan types is that the government pays the interest that accumulates while you are in school on a subsidized Stafford loan, while it does not for an unsubsidized loan. Additionally, students who demonstrate exceptional financial need can qualify for a Federal Perkins Loan, which also has a low interest rate and is subsidized. If you qualify for a Perkins Loan, you will not only benefit by it being subsidized, but you will also enjoy a long grace period: you are not required to begin repayment on a Perkins Loan until nine months after graduation.
Benefits of Student Loans with Low Interest Rates
The obvious benefit of a student loan with a low interest rate is that the total cost of the loan will be relatively lower, though in some cases you may also find that your payment amounts and length are that much shorter that it will help you financially after college.
Finding the Best Student Loan Rates
In order to obtain student loans with the best rates, you must thoroughly research your options, which is where SimpleTuition can help. You should compare various loans; check out their rates, repayment terms, and other details before making a decision - and you can do all of this on our site. Doing the proper research will help you find the loan best for you. Federal student loans, such as Stafford loans, should be explored first, as they have a fixed rate of interest, and various private student loans with low interest rates are available as well.
Q:How do I find a student loan with the best interest rate?
A:Many students rely on financial assistance and are on the lookout for student loans with the lowest interest rates, which mean they'll ultimately cost lest come repayment. Federal loans are the first choice for many students because they have low, fixed rates and may be subsidized, making them even cheaper. However, If these are not enough, then private loans can be explored. With private loans the best rates are determined by the credit history of a student or the cosigner.
Q:When comparing student loan rates from private lenders, what factors should I consider?
A:To compare student loan rates from private sources, the first consideration is the interest rate. But other important factors include the terms and conditions that come with each loan. You are legally bound by those terms and conditions, so it pays to know what they are. Compare the choice of repayment options, know your borrower benefits, and check if the interest rate is fixed or variable.
Q:Why should I compare student loan rates?
A:It is important to compare student loan rates because this helps you get the best and cheapest interest rate on your student loans. Remember that repaying your student loans is an expensive and lengthy process, so finding one with a lower rate will save you a lot of money in the long run.
Q:Is it true that the best student loan rates are offered alongside federal loans?
A:Federal loans are geared towards making education affordable. Low interest rates are one of the key features of these loans. The federal government subsidizes the interest rates on these loans to make repayments affordable. The rate is fixed and can be as low as 6.5%. Perkins loans, Stafford loans, and Graduate PLUS loans are a few major federal loans.
Q:What are the current rates for Stafford loans?
A:Stafford loans are popular student loans funded by the federal government. You can either opt for a subsidized Stafford loan or an unsubsidized Stafford loan, as the current interest rate for unsubsidized Stafford loans is 6.8% and 3.50% for subsidized Stafford loan. The interest rates are usually fixed, which helps keep payments affordable for students.
Q:Why should I compare student loan interest rates on private loans?
A:Interest rate is the price paid to borrow a sum of money. Private student loans usually have high interest rates as compared to federal loans. Interest rates determine your repayments for each month, so the higher the interest rate, the higher the payment. Before you take out a loan, make sure you find an affordable interest rate.
Q:What should I consider when I compare student loans interest rates?
A:Student loans interest rates are the amount paid to borrow money from a lending institution, as the rate of interest determines the repayment amount. The higher the interest rate, the higher the repayments. Usually, you will find federal loans with low interest rates. Popular federal student loans include the Perkins, the Stafford, and Parent PLUS loans.
Q:I am seriously considering taking out a private student loan, could you tell me more about private student loan rates?
A:In general, private student loans are more expensive to pay off as compared to federal loans. But now, a lot of private lenders are offering cheaper options, the catch being that fees dramatically increase the cost of the loan. The loan will have a relatively low interest rate but high fees will take its cost sky-high, so you should look for a loan with a somewhat higher interest rate and no fees. A simple way of balancing this equation is to remember that 3% to 4% in fees is about the same as a 1% higher interest rate.