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If you are going to apply for a student loan you’ll want to find one with low interest. It makes a big difference particularly with student loans, which tend to be large.
Getting the lowest interest rate you possibly can is really important. It’ll save you tons money. For example, if a student gets a 6,000 dollar five-year loan with 10% interest rate, his monthly payment will be $127.48. On the other hand, if a different college student gets the same loan for the same time period (5 years) with 6% interest his monthly payment will be only $116. The difference is more than $10 a month! When 5 years is up, the guy who had the 10% interest rate will have forked out $688.86 more than the guy 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 what you’ll need to obtain a low-rate loan:
- Offer Collateral: Generally lenders will approve loans faster if you pledge your house or car as collateral. The problem is that the majority of college students do not have a house and a few don’t own cars. If you are one of those students who does not have a house, car, or other form of collateral, think about asking your parents to obtain a loan for you.
- High credit score: Lenders will be more inclined to give you a loan if you have past experience that shows you are a reliable bill-payer.
- Proof of successfully closing loans: If you’ve successfully paid off a past loan, bring proof of that to your lender.
- Have a job: If a bank is certain that you have a steady income, it increases your odds of acquiring a loan.
If you want a low interest loan, try federal student loans such as the Stafford or Perkins loans.
Stafford college loans provide lower interest rates than private loans, but somewhat higher than Perkins loans. Stafford student loans can be obtained by students who are attending college at least half-time and the loan an interest rate that changes once a year.
Perkins Student Loans offer an interest rate of merely 5%, and the rate is fixed. However, these are available only to students who are a terrible condition financially. These payments are scheduled over a 10 year period and can be canceled under particular circumstances.
Low rate student loans can be found if you understand where to look and what the requirements are.
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