Any time you have to borrow money especially for student loans you want to choose a loan that has a low interest rate. Student loans can total up into the thousands and thousands of dollars. The interest on most loans starts to accumulate as soon as the loan is paid out. Student loans often have a deferment payment until after you graduate. Can you imagine how much interest that would be? It would be a lot of extra money you have to pay back.
That is why having a low interest rate on your student loans is worth the effort to make sure that you get just that. Some students try their luck with private loans; these are loans that are given out by banks and credit unions. Your best bet at having a low fixed interest rate is to try Federal Loans. When you have a low interest rate your monthly payments are low and you can even start to pay back your loans while you are still in school.
You will also want to choose Federal Loans because they are subsidized; this means that the United States Federal Government covers the interest on these loans. The interest can be paid anywhere from the time you are in school up until 9 months after you graduate. The way to get started looking for these loans is by filling out the FAFSA. This is a Free Application for Federal Student Aid. All loan applications start with this process.
The best way to ensure that you get a loan is to make sure that the FAFSA is completed and returned by March of the year that you will be attending College. Once your application has been processed you will receive a Student Aid Report this will tell you how much money you will be getting and the interest rate. You also want to apply for the top two Federal Loans, The Stafford Loan and the Perkins Loan.
The Stafford Loan is a Federal Loan that is has a low interest that provides students to obtain loans with very little to zero credit. These loans all have different requirements and eligibilities than private loans do. The thing about the Stafford Loan is that it is not a subsidized loan so the low interest rate will come in handy.
The Perkins Loan is a bit harder to get. With the Perkins Loans they are given out on a more need to have basis. If you are applying for the Perkins Loan you may want to apply for the Federal Pell Grant. These loans usually average a 5% interest rate and you don’t have to pay it back until after you graduate. Low interest rates are important if students are repaying their own loans. It gives students a chance to show responsibility while getting a great education. Do some research on these loans and other low interest loans. If you start looking now you can apply for as many as you can before the March deadlines.
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