Whenever you’re searching for a student loan you’ll want to find one with a low-interest rate. It will make a big difference particularly with student loans, because they are usually large.
Applying for the lowest interest rate you can is very important. It’ll save you a great deal of money. For example, if someone gets a 6 thousand dollar, 5-year loan that has an interest rate of 10%, his monthly payment will be $127.48. Whereas, if another student gets the same loan for the same time period (5 years) with 6% interest he will only have to pay $116. That is more than a $10 per month difference! When the loan is finally paid off, the person who obtained a 10% interest rate will have paid $688.86 more than the person with the 6% interest rate. That’s a lot of money, especially for college students.
Finding a low interest student loan may be a little tricky but well worth it. To help you, here’s a list of things that’ll allow you to get a low-interest loan:
-Offer Collateral: Generally lenders approve loans faster if the borrower pledges their home or vehicle as collateral. The problem is that most students do not own a house and a few don’t even have a vehicle. If you are one of those students who does not have a house, car, or other form of collateral, you may want to ask your parents to take out a loan for you.
-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.
-Proof of successfully closing loans: If you have successfully paid off a past loan, bring proof of that to your lender when you go to take out a new loan.
-Be employed: If a bank is certain that you have a regular income, it will increase your chances of acquiring a low-interest loan.
If you want a low interest loan, try federal student loans such as the Stafford or Perkins loans.
The Stafford student loan offers interest rates that are lower than a private loan or alternative student loan, but slightly higher than Perkins loans. Stafford student loans can be obtained by students who are enrolled in school no less than part-time and the loan has a variable interest rate that is adjusted every 12 months.
Perkins Loans offer a low 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. The Perkins college student loan payments span over 10 years and can be canceled under particular circumstances.
Low interest student loans can be found if you understand where you should look and what the requirements are.
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